SFO investigates allegations of fraudulent allocation of public funds at KCDC
The Serious Fraud Office is investigating a former employee of Kāpiti Coast District Council over allegations relating to the fraudulent allocation of public funding in a case that’s certainly raised a few eyebrows and set chins wagging in our coastal community.
Kāpiti as a district isn’t particularly large, nudging in at an estimated 57,800 people as of June 2024. As a result, Kāpiti Coast District Council (frequently abbreviated to the rock band sounding KCDC) is easily the largest employer based in the district with a headcount of 478 employees (414 full-time equivalent) as of 30 June 2024.
As a former KCDC councillor and as someone who’s advocated for an independent integrity entity to provide a greater focus on integrity and corruption issues, the story has caught my attention. I’m left wondering whether it’s something that happened during my time on council that I could have/should have noticed or if it’s from before or after my time, but there’s obviously not a lot of public information to go on at this point so I’m as in the dark as every other member of the general public.
It’s more than likely that elected members have been briefed on elements of what’s happening through the council’s Risk and Assurance Committee. At a guess I’d say the likely avenues for the allegations to have been picked up come from either being through the council’s own audit procedures or being brought to someone’s attention thanks to a whistle-blower.
Naturally enough, there’s speculation in the community to which former employee could be at the centre of the allegations and what public funding was involved. I’ve certainly pondered those same questions. However, it’s worth pointing out that even if the Serious Fraud Office (SFO) does decide to prosecute, name suppression will likely be sought and we’ll be in the dark about the suspect/defendant for some time even as other details may come to light.
We should also be mindful that at this stage it’s just an investigation. It might come to nothing. Even if it does progress to prosecution, whoever the defendant might end up being has the right to a fair trial and is presumed innocent until proven guilty.
So with all that in mind, I thought it would be useful to consider a few recent examples of where the SFO has been involved in prosecuting issues of fraud and corruption in local government.
There’s been a couple of particularly high profile cases in recent years. The first that popped to mind was the case of a former Westland District Council assets manager, who was found guilty of 14 charges of corruption and bribery and nine charges of obstructing a SFO investigation. In that case the guilty party took some $70,000 in bribes in exchange for awarding contracts valued at nearly $500,000.
A much more recent case involved a former Auckland Council building inspector who pled guilty after accepting bribes in the form of $35,000 in cash payments and home renovation work in connection with his work as a building inspector.
Going back a bit further, in 2017 a former senior manager who had worked first with Rodney District Council and then Auckland Transport was found guilty for corruption and bribery offences totalling $1.2m in relation to phony contracts and inappropriate gifts.
In another procurement related case, a former Auckland Council employee accepted a $7,500 kickback to award a contract for the delivery of USB flash drives to the council.
The point here is that the SFO investigates and prosecutes offending at a wide-range of levels - from $7,500 through to the millions and covering senior leaders through to staff on the frontline improperly using their positions.
I know I’ve heard more than my fair share of rumour and scuttlebutt over the years. Likewise when I was on council I raised a couple of conflict of interest issues relating to various matters that made me question the processes the council had in place for managing such things, but I have no idea if any of these are connected to what’s currently unfolding and it seems unlikely.
While you might think it could be helpful if KCDC issued a statement as to what’s going on, they’re probably very limited in what they can say at this stage and likely can’t add anything more to what the SFO has already said.
So as much as we’d like to know what’s going on, we’ll just have to hurry up and wait.