A written complaint was received by the Public Officer, Newcastle City Council (McMahon), on 14 October 2008 regarding an alleged breach of the Code of Conduct. Advice was provided to the complainant regarding the appropriate process to progress the concerns including details of how to formally lodge a complaint.
On 16 December 2008, the complainant provided sufficient information in the form of a complaint to the General Manager (Hyam) for assessment in accordance with the provisions of the Code of Conduct.
The complainant alleged breaches of the Code of Conduct by the Lord Mayor Councillor John Tate. The complainant stated that the Lord Mayor had received political donations from a person with an interest (political or campaign donor or related entity) in development application DA06/0675, 71-79 Abbott Street, 67 Douglas Street and 108114 Newcastle Road, Wallsend.
The allegations were that the Lord Mayor did not adequately disclose the conflict of interests created by these political donations and that he did not manage the conflict of interests appropriately as he continued to take part in the determination of the development application.
In summary, the complainant alleged that:
• Clr Tate has a conflict of interests due to the receipt of political donations from Hilton Grugeon and or related entities which would prohibit him from taking part in consideration of DA 06/0675.
• Clr Tate has received money from Hilton Grugeon in the form of political donations to his state election campaign.
• Hilton Grugeon either in his own right or through his interest in the applicant had a matter before Council on 14 October 2008 in DA 06/0675.
• Clr Tate has received money from Hunter Land Pty Ltd in the form of political donations to his state election campaign.
• Hilton Grugeon has an interest in Hunter Land Pty Ltd.
• Clr Tate has received political donations for his state election campaign from other entities which Hilton Grugeon may have an interest.
• Clr Tate may have received political donations from Hilton Grugeon or entities in which he has an interest in his Local Government election campaign however this cannot be determined until his return is lodged in April (Note: Lodgement is required by 25 February 2009 not April as indicated by complainant).
• Clr Tate has a conflict of interest as a reasonable and informed person would perceive that he could be influenced by these donations when determining his position on Development Application 06/0675.
• Clr Tate failed to disclose this interest to the meeting either in writing as required or if not required to be in writing then he failed to adequately disclose the matter in the Council meeting for proper minuting.
• Clr Tate did not disclose the nature of the interest adequately.
• Clr Tate did not manage the conflict of interest appropriately as he did not remove himself from the Council Chamber and abstain from voting on DA 06/0675.
• Clr Tate did not provide an adequate explanation as to why he considered the conflict did not require action other than continuing to stay in the chamber and vote on DA 06/0675.
Some of the findings from the report were that (my emphasis in bold):
1. The Lord Mayor, Councillor Tate, in relation to Development Application 06/0675, acted in accordance with the provisions of section 7.21 to 7.25 inclusive of the Newcastle City Council Code of Conduct in that he met his disclosure requirements pertaining to political donations to his local government election campaign.
2. The Lord Mayor, Councillor Tate identified and disclosed a conflict of interests to the Extraordinary Development Meeting on 14 October 2008 in relation to Development Application 06/0675.
3. Information provided by the Lord Mayor, Councillor Tate at that meeting and subsequently to the conduct reviewer, indicates that the nature of the conflict of interests is that of a perceived non-pecuniary, less than significant nature.
4. Management of a non-pecuniary, less than significant conflict of interests is required in accordance with provision 7.18 of the Newcastle City Council Code of Conduct. That provision states that “… you must provide an explanation of why you consider that the conflict does not require further action in the circumstances”.
5. Provision 7.16(b) of the Newcastle City Council Code of Conduct details that for a non-pecuniary conflict of interests to be significant it involves “…other relationships that are particularly close such as friendships and business relationships. Closeness is defined by the nature of the friendship or business relationship, the frequency of contact and the duration of the friendship or relationship”. The guidelines developed by the Department of Local Government relating to the code of conduct also emphasise that the ‘strength’ of the relationship should be considered.
6. The Lord Mayor, Councillor Tate stated that he had known Mr Grugeon for about 26 years and that he did not consider the relationship to be a particularly close one of either a business or friendship nature. He further stated that the contact with Mr Grugeon is limited to seeing him at charity or fundraiser events and that the frequency of contact is limited to these events.
7. A reasonable and informed person may perceive that the Lord Mayor, Councillor Tate has a conflict of interests such that he could be influenced when determining Development Application 06/0675 given that he received political donations during the State government election from Hilton Grugeon and his related companies to the value of $15,600. [Note figures quoted are from the Election Funding Authority website and are based solely on the names provided by the complainant.]
8. The Code of Conduct at 7.13 requires disclosure of any non-pecuniary conflict of interests fully and in writing even if the conflict is not significant and this must be done as soon as practicable. If the disclosure is made at a council or committee meeting, the provisions of 7.14 require that both the disclosure and the nature of the interest must be recorded in the minutes. Section 7.14 constitutes disclosure ‘in writing’ for the purposes of section 7.13.
9. The disclosure made by the Lord Mayor, Councillor Tate, does not contain sufficient information to provide adequate explanation of the perceived conflict of interest nor does it detail appropriate management strategies for the perceived conflict of interest.
10. As soon as this inadequacy was discussed in detail with the Lord Mayor, Councillor Tate, he undertook and provided a detailed letter to the General Manager, dated 22 January 2009, in relation to Development Application 06/0675.
11. The General Manager has advised that this letter from the Lord Mayor has been retained on the appropriate council file.
The Code of Conduct reviewer's conclusions were:
The sole reviewer is obligated to report to Council on the outcome of the investigation into the alleged breaches of the Code of Conduct. The following details those outcomes:
1. That Council receive and note the contents of this report.
2. That Council takes no action against the Lord Mayor Councillor Tate and Councillors Luke, Buman, Connell and King, the subjects of these complaints.
3. That when the Newcastle City Council Code of Conduct is reviewed in early 2009 that the General Manager ensures particular consideration is given to enhancing the provisions of the Code of Conduct pertaining to conflict of interests and political donations.