Ipswich allegations prompt broader questions about council companies
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Ipswich allegations prompt broader questions about council companies

Queensland's crime-fighting watchdog questions why local councils need bodies with private sector links, which cannot be accessed by Right to Information legislation, to develop property as it broadens inquiries into local councils.

It also questions why a senior Ipswich senior executive allegedly did not accurately disclose receiving tickets given by a major contractor to race days at Doomben, Sydney and Flemington, nor explain an alleged $5000 in betting credits in his account.

Local Government Minister Stirling Hinchliffe will tighten guidelines around council-owned entities and their business operations.

Local Government Minister Stirling Hinchliffe will tighten guidelines around council-owned entities and their business operations.Credit:AAP Image/ Glenn Hunt

The Crime and Corruption Commission’s Operation Windage report into Ipswich City Council recommended a major review of Ipswich City Council and a review of other councils in Queensland.

Ipswich had, until recently, five council-owned business entities involved in property development, where councillors served as directors, but where there was no independent private sector expertise.

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“The CCC investigation found that the use of controlled entities by the Ipswich City Council gave rise to a number of serious corruption risks and prevented the Council from being fully transparent and accountable,” the report said.

“Investigations during Operation Windage identified that senior members of Ipswich City Council appeared to be exploiting their involvement in these companies for their own personal benefit and the benefit of close associates.”

Fifteen people linked with Ipswich City Council have been charged with 86 criminal offences. Of the 15 people charged, seven are either current or former council employees or councillors, including former mayoys Paul Pisasale and Andrew Antoniolli.

Former Ipswich Mayor Paul Pisasale leaving Brisbane Magistrates Court on August 13.

Former Ipswich Mayor Paul Pisasale leaving Brisbane Magistrates Court on August 13.Credit:AAP/Darren England

The council defends the operation of the “controlled entities” and says it has recently appointed private sector representatives to one, Ipswich City Properties, which is redeveloping the Ipswich Mall.

Current mayor Wayne Wendt said Ipswich recently decided to wind back all but one of these council-controlled bodies, on the previous recommendation of a former mayor Antoniolli, before he was charged with fraud by the Crime and Corruption Commission.

The latest report, tabled in Queensland Parliament, also details allegations of close links between unnamed Ipswich councillors and developers in four case studies.

Fairfax Media has chosen extracts from two case studies within the report, published in state parliament.

Case study one: “Operation Windage identified that a councillor had developed a personal association with a property developer who had two active residential developments in Ipswich. The developer regularly allowed the councillor to stay free of charge at inner-city units that he managed.

“Their close personal relationship enabled the developer to ask the councillor to assist with resolving issues with his development projects, as well as facilitating cash payments between them.”

Case study two: “During Operation Windage, a senior executive employee was identified regularly attending social events with an associate who was a contractor. The associate gave the senior executive employee tickets to horse racing events such as the Flemington Race Day in Melbourne in October 2016 to the value of $1450, Doomben Race Day in Brisbane in February 2017 and the Golden Slipper Race meet in Sydney in March 2017 at the cost of $400.

“The associate also allegedly arranged for betting credits to the value of $5000 to be deposited into the senior executive employee’s betting account. In exchange for these gifts and benefits, it is alleged that the senior executive employee facilitated meetings between the associate and various town planners to ensure his associate was in a good position to win tender processes in Ipswich.”

The executive reported the tickets to Flemington, but said they were worth $450, not $1450, the CCC report says.

Ipswich’s longest-serving councillor, Paul Tully, who has not been charged, condemned the release of the CCC report.

"This should not have been published, it's totally inappropriate and unfair to those 15 people," Mr Tully said.

Local Government Minister Stirling Hinchliffe said the CCC decided to release the report and said he and Premier Annastacia Palaszcuk both supported the decision.

Next Tuesday, Queensland Parliament will debate legislation to wind up Ipswich City Council and appoint an administrator.

Mr Hinchliffe said he supported tightening guidelines around council-owned entities, as recommended by the CCC in its report.

“There is no question that beneficial entities, controlled entities or special purpose vehicles - which is another phrase that is used - play an important role in delivering good outcomes,” he said.

“But we need to look at how they can best be more accountable or more transparent or more open to the community.”

Brisbane City Council has 14 controlled entities, six of which are dormant, involved in property development, museums and theatres.

The largest of these controlled entities is Brisbane’s so-called "future fund", the City of Brisbane Investment Corporation, which has grown council assets under its control from around $135 million in 2008 to over $273 million.

It paid $90 million in dividends to Brisbane City Council since 2008.

Lord mayor Graham Quirk said he would abide by any recommendations about council-owned bodies made by the CCC.

Cr Quirk said, unlike Ipswich's example, no Brisbane councillors served on the CBIC board.

“Council’s controlled entities are currently independently audited each financial year by the state government’s Queensland Audit Office and made publicly available,” Cr Quirk said.

“There are no councillors on the CBIC Board. The council’s chief executive officer is a member and full details are in the annual report.”

- with AAP