Blame a small city, a flawed set of rules, an inexperienced bureaucracy, a public service and government made forgetful and lazy by incumbency and familiarity, or even the ACT's deep reliance on selling land for revenue. Whichever you pinpoint as the cause, development processes in Canberra have become caught up in close relationships in which former politicians and bureaucrats people the ranks of the development industry.
The Canberra Times is not suggesting any of the people mentioned in this article have acted corruptly or unethically. Rather, they're working in a system that apparently tolerates potential conflicts and to some extent asks us simply to trust.
Nor is The Canberra Times suggesting this is the entire pantheon of players on the local development scene. These are simply examples of the kinds of issues that are arising in Canberra and can give rise to the perception of conflict.
One of the most powerful of the backroom deal makers is David Lamont, a former Labor deputy chief minister, who now has a hand in an array of development projects that involve government concessions, permissions and negotiations. Here are three:
The Brumbies' controversial deal to sell its Griffith land and move to the University of Canberra. Lamont worked with the Brumbies on the Griffith sale and for the University of Canberra, even now, as its project adviser for campus development, including the new sports hub and student accommodation. The deal is now tangled in a court dispute.
The ANU Exchange development along Childers Street and Marcus Clarke Street, a long-term development of student accommodation, university buildings, a hotel and research-related businesses in the precinct. The Australian National University employed Lamont to work on this vast project when negotiations led to the signing of a deed in 2004, in which the government gave the ANU the right to develop the land. Now, through a company half-owned by his wife, Lamont provides "construction supervision, project management and superintendency services to the university's 'student accommodation five' project", according to the ANU. The $53 million building will house 500 students when it opens next year.
The much-criticised Grocon-Giants bid for rights to redevelop Manuka Oval with 650 apartments and a hotel. Lamont's firm works for the bid team.
Lamont is, of course, free to make a career in the private sector, but it is axiomatic that his time in the ACT parliament from 1992-1995, which gives him ongoing access to the building, and his relationships within the Labor Party provides him with useful links.
His involvement in government-related development projects is sweeping. But he's by no means the only one.
This year, The Canberra Times reported that Dan Stewart was working on the Manuka deal, having left the Land Development Agency as its deputy chief executive in August last year.
Stewart, in his new role with Elton Consulting, turned out to be also working on a second, unsolicited bid to government – the Canberra Casino's bid for a major extension and redevelopment, and permission for the first time in its history to be allowed poker machines. He was briefing politicians on that project within a month of leaving the public service.
Elton Consulting is also working on the Riverview project in West Belconnen – a vast housing development that will span the ACT-NSW border. The West Belconnen development is a joint venture between Riverview and Stewart's former government employer, the LDA – and Elton's website boasts it has been working with the government on the project for six years.
Which brings us to another of the public servants working in development soon after leaving the public service – a case that illustrates the complexities of handling these potential conflicts.
Greg Ellis was Lamont's chief of staff when he was deputy chief minister in the Labor government in the early 1990s. While in the public service Ellis was tasked with the ANU Exchange agreement, writing cabinet submissions and briefings on the deal, finalised in 2004. This is the same project referred to above, in which his former boss, Lamont, was working on the other side of the deal, for the ANU. Ellis on one side; Lamont on the other.
Ellis says that to suggest a conflict would be "a bit of a stretch", given he had "no dealings or contact with Lamont for about nine years".
"I knew how to conduct myself professionally and with probity. I know The Canberra Times doesn't like the 'Canberra is a small pool' argument, but really? I can't do my job because someone employed by the other side of a deal was someone I worked for nearly a decade earlier? That kind of stricture could stifle a lot of activity."
Ellis subsequently worked at the ANU from 2007 to 2009, as director of the ANU vice-chancellor's office. He says his move there was nothing to do with his connection to Lamont, but rather his relationship with vice-chancellor Ian Chubb after he had spent four or five years in the late 1990s working for the Australian Vice-Chancellors Committee. He also stresses that when he was at the ANU it was a condition of his departure from the public service that he not work on the Exchange project for six months, and he had never been required to become involved.
Back in the public service more recently, Ellis worked on the West Belconnen Riverview housing project. He left the public service in June 2014 and, by September that year, he was working for Riverview, a job he says he did "for a little over 12 months".
This time, he didn't need to refrain from working on the project for six months, because in the public service he says he was "not privy to any part of the commercial negotiation". "In other words, in the Riverview case, there was nothing I could have divulged of any advantage to the Riverview Group," he said.
Ellis's explanations look reasonable and well within the rules, but his situation highlights the conundrum of how to handle bureaucrat-developer relationships.
It's a problem that barely raises an eyebrow in the ACT bureaucracy and its parliament, where it is routinely dismissed with a shrug of shoulders and the unhelpful observation that it's a small city. So blase have we become that Chief Minister Andrew Barr professed a complete lack of concern when faced with news that the husband of Meegan Fitzharris, Barr's former chief of staff and now a minister in his cabinet, was working for Lamont's Dowse Projects on the Manuka bid. He had seen "nothing to suggest there is any conflict in this situation"; Fitzharris's meeting showed an "exemplary standard of integrity", Barr declared.
One of the peculiarities of all of this is the interconnectedness of the people, if not the projects. Ellis was Lamont's staffer before they both worked on the ANU property deal: Ellis on one side, Lamont on the other. Stewart's company, like Ellis, works on Riverview. Stewart, like Lamont and Pierre Huetter (Fitzharris's husband), worked on Manuka (Elton says it no longer works on the project). Huetter worked for Lamont's company before he resigned in April. Lamont and Huetter have both been high-profile Labor figures: Lamont as a former deputy chief minister; Huetter as a former Right faction leader and husband to a cabinet minister.
Now, and separately, there's the Glebe Park land sale, which has sparked significant concerns among observers about why the government paid so much for the site, part of which is sought by the casino. The Canberra Times makes no suggestions of wrongdoing, but questions remain over the price paid and the process followed.
The Land Development Agency paid $4.2 million for the land, four times its original valuation. It hasn't satisfactorily explained why it sought a second valuation months later, and accepted it, despite it being predicated on the owners wanting to develop an eight-storey apartment building on the site – a development not allowed under the lease and expressly ruled out by the government. The agency bought the land in September last year from Graham Potts and Barry Morris; coincidentally, Potts also bought and developed the Griffith land from the Brumbies.
The second valuation was sought by Dan Stewart, and the decision to buy at the price was made by agency chief David Dawes, who says he did so under his delegated powers, and informed the agency board afterwards, following correct process. Again suggesting no more than past connections, Dawes knows Potts well, having been in the real estate business with him in the early 1990s, when company records suggest that for a period from 1990 to 1992 they were directors and shareholders of Federation Independent. Federation grew into what is today the giant Independent Property Group.
Dawes hasn't explicitly confirmed the connection, but says over decades he has had professional relationships with many people in business, real estate, building and development, which have been invaluable in his public duties.
He has been open and transparent about those relationships, and the agency has checks and balances in place to ensure that agency dealings were "undertaken to a high level of integrity and accountability", he says.
The agency points to the government's desire to use part of the Glebe Park land to relocate the stormwater point from Parkes Way, which needs to happen before Parkes Way can be lowered for the City to the Lake project. "The government was left with very few options to relocate the pond and, as such, was required to pursue land which was not currently up for sale," acting deputy chief Karen Doran said. Which begs the question: why didn't the agency simply acquire the land compulsorily if it was needed for public infrastructure? (The agency's answer: it prefers not to go that route.)
Now the auditor is investigating this transaction and, like the Brumbies controversy, you suspect there's more to hear.
All these arrangements leave you with a sense of relationships too close for comfort. The Greens' Shane Rattenbury said, regarding Fitzharris and her husband, that it was a consequence of Canberra's size. "In a small town like this, I come across the same people regularly on a whole range of things," Rattenbury said. "I judge them on the merits of their case, not who they're connected to."
But to say the pool is small should not be to shrug our collective shoulders. Rather, it should increase vigilance, and require more stringent rules and more transparent processes.
Right now, the risks are higher still because of the Labor government's longevity. Fifteen years in power serves to cement relationships between governments and developers, and friendships between people moving back and forth from one side of the procurement ledger to the other. It appears to have led, at the very least, to complacency and a general, all-round forgetfulness about potential conflicts or perceived conflicts.
There are some rules, and the handling of Ellis's move to the ANU in 2007 shows that arrangements are made to mitigate conflict when public servants take private work after leaving the bureaucracy.
The Public Sector Management Act bans public servants from taking improper advantage of information to benefit themselves or someone else, and binds them to confidentiality. The code of conduct for ACT public servants calls on public servants to manage conflicts, although doesn't say how. More detail is in the code of ethics, which covers issues such as the use of confidential information after leaving the public service.
There is a separate lobbying code of conduct, which is stronger banning former public service executives from lobbying on anything with which they had official dealings in their last 12 months. Which might stop Stewart talking to the government about the casino; or Ellis making representations about Riverview. But that presupposes the people concerned regard themselves as lobbyists. Which none mentioned in this story evidently do. Not one has registered on the ACT lobbyist register, set up 18 months ago, despite a definition of lobbying (any communication with a public official "to influence legislation or policy, regulatory or administrative decisions" on behalf of another organisation) that would appear to capture most if not all of them.
Introducing the register in 2014, then chief minister Katy Gallagher drew a comparison with NSW.
"You do not have to look too far over either side of the border to see where problems have arisen with the way politicians conduct their business and, importantly, with the way interested stakeholders, lobbyists, also conduct their business and seek approvals, favours, influence or power," she told the ACT parliament. "Territory citizens rightly expect transparency and open decision-making from their elected representatives. They expect decisions to be made objectively and on merit without any reference to private gain or personal interest. "
Politicians and bureaucrats are not allowed to communicate with lobbyists unless they're on the register – a rule that resulted in Rattenbury refusing a meeting requested by Stewart to discuss the casino.
But no one else appeared to share Rattenbury's concern. Barr, Planning Minister Mick Gentleman and Liberal member Brendan Smyth all agreed to meet Stewart. And it appears Dawes, the head of the land agency and the director-general of economic development, might have done the same. Asked whether he had met Stewart, his former second-in-change, he responded: "It is normal business for the LDA to meet with ... consultants who from time to time include [Stewart's employer] Elton Consulting."
Responding for Stewart, Elton Consulting chief executive Kim Anson said Stewart had signed a confidentiality agreement as a departing public servant and had met its obligations. Elton Consulting was no longer working on Manuka, it had been working on West Belconnen for about eight years, and there was no conflict in its work for the casino, given the casino owners had "made no submissions to the ACT government prior to Mr Stewart's departure from the LDA, nor had the ACT government considered or taken a position on the matter".
Stewart denies he is a lobbyist. He says his role on the casino is planning advice. And on Manuka, he is not employed to liaise with government, but to liaise with the community. Stewart also says that both the casino and Manuka bids are dealt with by Invest Canberra – because they are unsolicited bids, so nothing to do with the LDA, where he was deputy chief.
But this looks more a technical point than an entirely satisfactory one, given the involvement of the agency in land deals well timed for both bids: the Telopea Park school land swap last year, in which the school's tennis courts were transferred from the Education Directorate to the agency without the school's knowledge, a plan since reversed after public outcry; and the agency's purchase of the Glebe Park land part of which is sought by the casino, although the agency says it bought the land for a stormwater pond, and the casino says its interest in the land post-dated the sale, which also post-dates Stewart's tenure at the land agency.
Lamont declined to comment, saying: "After considering your questions and taking legal advice, I do not propose to respond at this time. I trust you will avoid the temptation to jump on the Lamont-bashing bandwagon apparently put in motion by a close friend and confidante of the Leader of the Opposition. If I am damaged by your article I will seek legal redress."
Fitzharris and Barr both argued that her conflict could be managed while her husband worked for Lamont's Dowse Projects, but their position became untenable after revelations that not only was Huetter working on the Manuka bid, he had been involved in official briefings on the bid project for Barr, for bureaucrats and for his own wife in her Assembly office. He resigned soon after.
Ellis also met with bureaucrats on behalf of Riverview. Acting deputy director-general of economic development Karen Doran responded to our questions: "As a communications consultant to Riverview Group, Greg Ellis has, on some occasions, met with the LDA to brief them on the West Belconnen project."
The Commonwealth code of conduct has more to say than the ACT code, spelling out three key risks:
- A bureaucrat would influence decisions in favour of a prospective new employer.
- A former bureaucrat would reveal confidential or advantageous information to his or her new, private-sector employer.
- A former bureaucrat would "exploit their knowledge" of bureaucracy and government "to lobby, or otherwise seek advantage" for their new employer – with the "perception that the former employee will have a greater ability to influence their former colleagues".
It says that, while the public service can't stop a bureaucrat taking up a new job, it can stop them dealing with their former colleagues in the bureaucracy.
In NSW, the Independent Commission Against Corruption (which defines "corruption" more broadly than general use) warns public servants where the risks lie:
"The type of employment which may be cause for concern is that which bears a close or sensitive relationship with the person's former position as a public official," it says. "Examples might be regulators who go to work in an industry they formerly regulated, an adviser or chief executive who resigns from the public service to work in the private sector in the area of his or her former expertise, or a former government minister who obtains work as a political lobbyist. The risk of corruption is higher if the post-separation work involves contact with the former department, colleagues, or staff of the former public official."
They are risks that ring a warning bell the ACT would do well to hear.