Back in January, The Press reported that three former CERA staff had been running a property development business on the side in an apparent effort to profit from their jobs. Yesterday the State Services Commissioner reported back on an investigation into them, and made it clear that their actions were completely unacceptable:
Mr Gallagher and Mr Nikoloff were found to have been using a private company (PIML) to attempt to participate in a business deal for personal gain, relating to the same property (273 Manchester St) and with the same parties they were engaging with in their public capacity as CERA employees. They did not disclose their personal interest to parties involved in the potential transaction or to their employer.
This created a clear conflict of interest which they were aware of and should have disclosed to CERA, however they did not do so.
“I consider their actions to be serious misconduct that is unacceptable in the New Zealand Public Service,” Mr Hughes said.
“If these two individuals were still employed by CERA I believe there would be strong grounds for terminating their employment,” he said.
“I am unable to direct State sector employers when making employment decisions, however based on what I have seen in Mr Heron’s report, if it were up to me I would not employ these individuals,” Mr Hughes said.
This behaviour apparently continued when they moved to Otakaro Ltd, National's secret, corporatised development company. They've been referred to the Serious Fraud Office as a result, presumably on charges of corrupt use of official information. And apparently they're now looking at another group of CERA employees for similar behaviour. The rot appears to go deep.
One of the three, Murray Cleverley, wasn't involved in the apparent corruption around PIML, but the report makes it clear that he had behaved unacceptably in his position as chair of the Canterbury DHB by refusing to properly manage a conflict of interest around leasing them property. He's resigned as a result, and good riddance. While less serious than his friends, he too has betrayed the core values of the New Zealand public service.
Gallagher and Nikoloff appear completely unrepenant and have sought to minimise their behaviour. They've also tried to explain it because they come from a business background. And that is exactly the problem: the corrupt values of the New Zealand business community are completely at odds with those expected from public servants. If we want a clean public service, we shouldn't hire from business.