The Bega Valley Shire Council was one of 110 councils and government agencies that the Independent Commission Against Corruption investigated in April 2011 over allegations staff had received gift cards and other items in return for placing orders with several companies.
The investigation, dubbed Operation Jarek, moved to a Public Inquiry on October 4, 2011.
At the time it was claimed to be the most extensive corruption inquiry that the ICAC had undertaken in 20 years.
Seven BVSC staff were found to have received gift cards and or minor gifts and a further staff member was also revealed to be involved during the course of the investigation.
The investigation, undertaken by an external investigator appointed by the council, found that the employees had breached the Code of Conduct in relation to their acceptance of gifts and benefits. Official first stage disciplinary warning letters were issued to those staff. They co-operated willingly and appeared remorseful in relation to their actions, the council said.
Council reported back to ICAC outlining the action it had taken.
During the course of the original investigation, ICAC compiled information suggesting employees of Bega Valley Shire Council had “improperly accepted gifts and benefits provided by Momar Australia Pty Ltd”. The information held by the ICAC suggested “gifts and benefits were provided to your employees as a result of an ongoing business relationship between Bega Valley Shire Council and Momar Australia Pty Ltd. In the majority of cases, the Commission believes gifts and benefits were sent directly to the home addresses of your employees.”
Following receipt of the council’s report on the matter an ICAC senior investigator requested copies of council’s transcripts of interviews. These were provided to the ICAC in hard copy.
The matter was reported to Council on September 27, 2011 outlining the claims in relation to Momar and NCH Australia (Chemsearch), with the report including council’s actions and response.
The BVSC was not one of the 15 councils whose names were mentioned in open hearing and council was not required to produce oral evidence.
Subsequent advice was also received in 2011 noting that the Commissioner had made a suppression order to allow each of the 95 councils not required to provide oral evidence to investigate those allegations and to take whatever steps necessary in connection with them.
The matter of the ICAC investigation arose at council’s 2012 December meeting following council’s receipt of the formal report from the ICAC about Operation Jarek.
It outlined council’s investigation process, and noted that determinations from council’s investigations had been completed.
The report made 15 corruption prevention recommendations which have been recommended to all NSW councils as the ICAC believes it is evident that the conduct uncovered in the Jarek investigation as systemic and all councils should take action to mitigate the risk.
Group manager community and relationships Leanne Barnes said:
“The recommendations from the inquiry are however clearly important for council to include in a review of its procurement, stores management and governance processes.”
Commenting on council’s policy Ms Barnes said: “Council’s policy and procedures in code of conduct, gifts and benefits and procurement are being reviewed following receipt of this report and will be presented to council for adoption.”
In conclusion Ms Barnes said that the 2011 council investigation findings and the final Operation Jarek report recommendations will be key inputs in the review of council’s procurement, stores and code of conduct reviews in the period to June 2013.
1. To note the Operation Jarek – ICAC investigation report.
2. That council receive a further presentation and report on updated policy in relation to gifts and benefits and procurement and stores.
3. That the outcomes from the council investigation and the recommendations of the Operation Jarek investigation be included in the review of procedures and the council’s code of conduct in 2013.