operation ricco – an investigation into allegations of serious ... lawrence...operation ricco –...
TRANSCRIPT
Jeffrey Lawrence Chief Investigator
Operation Ricco – An investigation into allegations of serious corrupt conduct at City Of Botany Bay Council
PROTECTED
Presenter
Presentation Notes
Before I commence I would like to say that this presentation is based on a recent investigation the Commission undertook. However the Commission has not yet furnished its report on the investigation. The material contained within this presentation is in the public domain being on the Commission’s website. However nothing in my presentation should be taken or considered to suggest any finding or view of the Commission in relation to the matter.
Receipt of initial information and process to investigation status
Process re receipt of complaints Assessment process Preliminary investigation Investigation
2
PROTECTED
Presenter
Presentation Notes
Before I talk about the specifics of Operation Ricco, I wish to explain the Commissions processes commencing what happens with the receipt of a complaint. Complaints to the Commission come from a multitude of sources come from members of the public, other law enforcement agencies, public sector agencies. Jurisdiction - The ICAC has jurisdiction over NSW public officials. The term public official is defined in the Act This includes persons employed, contracted, seconded, elected or appointed. Other people carrying out public official duties �Jurisdiction also extends to persons who are not themselves public officials but whose activities impact on the honest and impartial exercise of public function e.g. anyone who has corrupted, or is attempting to corrupt a public official. An example is a SUPPLIER/CONTRACTOR bribing a public official so as to secure government work. As you will see in Op Ricco there were certainly a number of contractors who appear to fall into this category. Now in terms of the process once a matter is received it is first evaluated by the Commission’s Assessments section, From there it is referred to the Assessment committee who decide whether the matter is one that will be referred to the Commissions investigation division. The Committee consists of the Commissioner and the Directors of Investigations, Legal and Corruption Prevention. If it is the Committee’s recommendation to refer the matter to the investigation division it is normally referred as a preliminary investigation. If matters are not proceeded with they can be filed, referred to another law enforcement agency (particularly if it is a matter that does not fall within the Commission’s jurisdiction) or can referred to a public sector agency including the in the case of here the public sector agency had referred the matter to the Commission. In the case of the last scenario the Commission may or may not require the agency to report on its investigation and the outcomes. Overview of Investigation Division – structure –3 x multi-disciplinary investigative teams consisting of investigators, intelligence analysts, forensic accountants/investigators and support officers. The Commission also has an Investigation Support Service Section which includes and Electronic Evidence Collection Officer and Surveillance Operatives. Multi disciplinary team environment extends to have dedicated Corruption Prevention officers from the Commissions Corruption Prevention Division and lawyers from the Commissions legal division also working closely with the Investigation Team on the matter. Once a matter is referred to the Investigation Division as a preliminary investigation certain Key Performance Indicators or KPI’s relating to timeframes become an issue. Certain timelines are set and a percentage compliance figure is set down for achievement. For instance, 120 days is the time frame from the date of referral of a matter to the Investigation Divisions for when a decision must be made as to whether a matter progresses to full investigation stage or is closed. Formal approval must be sought to extend this stage of a matter. This decision is made based on recommendations made to the Investigation Management Group (Consisting of Commissioner and the Directors of Investigations, Legal and Corruption Prevention) by the relevant Chief Investigator. The IMG oversees and provides direction and strategic advice to the Commissioner where it deems appropriate on all the Commissions investigations as well as hearings, preparation of investigation reports, briefs of evidence and the progress of criminal investigations arising from investigations. When a matter is escalated to investigation status, KPI’s are for it to reach the public inquiry stage no later then 16 months (485days) form the day the matter is referred to the Investigation Division. The group meets on a monthly basis where the reports on all current preliminary and full investigations are discussed. The Commission has extensive investigative powers when undertaking investigations: These include Search warrants, telephone intercepts, controlled operations, video and physical surveillance, the ability to compel people to give evidence at an inquiry (compelled evidence can’t be used in prosecution against the person themselves except for an offence under our Act). In addition the Commission has the ability to services a Notice for a Statement of Information (s 21) although this can only be served on public authorities or officials or Notices to produce. �
Operation Ricco – Gary Goodman
Gary Goodman Chief Financial Officer at City of
Botany Bay Council
3
PROTECTED
Presenter
Presentation Notes
Operation Ricco commenced as prelim investigation on 10 February 2015. Anonymous information received by our Assessment Section over phone on 8 December 2014. The allegations were quite specific and stated Goodman involved in misuse of council resources such as credit cards, cab charge, council vehicles. The information suggested a person with intimate knowledge of the matters being alleged. It was escalated to full investigation on 30 April 2015. During the presentation I intend to play a number of intercepted telephone calls involving Goodman and other parties. These calls appear to highlight the nature of the activity which was a focus of the Commissions investigation and which formed part of the scope of Op Ricco’s Public Inquiry. In addition I will also show you a number of invoices and a cheque that also formed part of the evidence at the public inquiry. Goodman himself was a long term Local Government employee having worked at a number of local Councils in the Sydney metropolitan area prior to joining the City Of Botany bay Council in 1994. He served in a number of positions and at the time of Ricco he was the Chief Financial Officer at the time of this investigation.
Telecommunication interception
2015-07-28 13-51-29 Goodman to
COBB contractor.wav
4
PROTECTED
Presenter
Presentation Notes
Audio on next slide – Slide 5 To begin with, this is an example of calls that were captured between Goodman and various COBB contractors. These calls appeared to suggest that Goodman would arrange payment upon the contractor supplying invoices for work that had purportedly been carried out as he described and then obtain money from the contractor. These was evidence before the Commission at the Public Inquiry that suggested large numbers of such invoices were authorised for payment by Goodman for work that had not been carried out.
Telecommunication interception
2015-07-28 13-51-29 Goodman to
COBB contractor.wav
5
PROTECTED
Presenter
Presentation Notes
To begin with, this is an example of calls that were captured between Goodman and various COBB contractors. These calls appeared to suggest that Goodman would arrange payment upon the contractor supplying invoices for work that had purportedly been carried out as he described and then obtain money from the contractor. These was evidence before the Commission at the Public Inquiry that suggested large numbers of such invoices were authorised for payment by Goodman for work that had not been carried out.
An example of an invoice supplied by a City of Botany Bay contractor
Green Thumb Gardening and Landscaping Pty Ltd invoice 23 Sep 2015.pdf
6
PROTECTED
Presenter
Presentation Notes
Here is an example of a invoice supplied by the COBB contractor involved in the previous telephone conversation. These was evidence before the Commission during its public inquiry that suggested this invoice may have contained false information. There was also evidence before the inquiry that the this contractor was an electrician by trade and was not involved in maintenance at the airport or Centennial Park and that the invoices of interest was carried out under the letterheads of a number of companies associated with this contractor. Evidence before the inquiry suggested this amounted to over 2.4 million dollars over a number of years. A large number of invoices were tendered at the Public Inquiry. From before the Inquiry it appeared that certain contractors would submit invoices for work that not only not performed but also for purported work that did fall within the contractual arrangements between Sydney Airport Corporation and the Centennial Park Authority.
7
PROTECTED
Example of cashed cheque
8
PROTECTED
Presenter
Presentation Notes
As per the previous call here is an example of a cheque that Goodman would obtain after paying invoices and then cash
Telecommunication interception
2015-09-13 21-26-49 Gary Goodman explaining how to create invoices.wav
9
PROTECTED
Presenter
Presentation Notes
Audio on next slide – Slide 10 – Set to play automatically This is an extract from a call between Goodman and a former COBB contractor Keith Mark. In the call Goodman appears to explain how to create false invoices purportedly for services performed at the Sydney Airport Domestic Terminal. Evidence at the inquiry showed that invoices under the name Australian Landscape Creations were submitted to council by Mr. Mark. Mr. Mark gave evidence at the Public Inquiry in which he stated he had been supplying false invoices to COBB between 1997 and 2004 amounting to millions of dollars for the benefit of Goodman.
Telecommunication interception
2015-09-13 21-26-49 Gary Goodman explaining how to create invoices.wav
10
PROTECTED
Presenter
Presentation Notes
This is an extract from a call between Goodman and a former COBB contractor Keith Mark. In the call Goodman appears to explain how to create false invoices purportedly for services performed at the Sydney Airport Domestic Terminal. Evidence at the inquiry showed that invoices under the name Australian Landscape Creations were submitted to council by Mr. Mark. Mr. Mark gave evidence at the Public Inquiry in which he stated he had been supplying false invoices to COBB between 1997 and 2004 amounting to millions of dollars for the benefit of Goodman.
Example of an invoice supplied by a person to whom Goodman owed money
Australian Landscape Creations invoice 28 Aug 2015.pdf
11
PROTECTED
Presenter
Presentation Notes
This is an example of invoices of which there was evidence before the inquiry that Mark had submitted. There was evidence before the inquiry that Goodman owed Mark a sum of money and that this was a way of Mark being repaid. Evidence before the inquiry suggested these invoices were false and were used solely to repay the personal debt owed by Goodman.
12
PROTECTED
Presenter
Presentation Notes
This is an example of invoices of which there was evidence before the inquiry that Mark had submitted. There was evidence before the inquiry that Goodman owed Mark a sum of money and that this was a way of Mark being repaid. Evidence before the inquiry suggested these invoices were false and were used solely to repay the personal debt owed by Goodman.
Telecommunication interception
2015-07-20 12-15-12 Goodman soliciting money from a COBB contractor.wav
13
PROTECTED
Presenter
Presentation Notes
Audio on next slide – Slide 14 – Set to play automatically This is an example of calls that were captured that appeared to suggest Goodman was soliciting money from a contractor in exchange for guaranteeing him work at Sydney Airport. COBB does perform work on behalf Sydney Airports Corporation however the nature of the work is clearly set out in their contractual arrangements. Evidence before the inquiry suggested that a large number of invoices submitted for payment by various contractors appeared to be for work that did not fall within the scope of work that Council would perform for Sydney Airports Corporation. NOTE: IF ASKED IF SACL INVOLVED SAY THERER WAS NO EVIDENCe BEFORE THE INQUIRY TO SUGGEST SACL HAD ANY INVOLVEMENT IN ANY OF THIS ACTIVITY. SAME WITH CENTENNIAL PARK.
Telecommunication interception
2015-07-20 12-15-12 Goodman soliciting money from a COBB contractor.wav
14
PROTECTED
Presenter
Presentation Notes
This is an example of calls that were captured that appeared to suggest Goodman was soliciting money from a contractor in exchange for guaranteeing him work at Sydney Airport. COBB does perform work on behalf Sydney Airports Corporation however the nature of the work is clearly set out in their contractual arrangements. Evidence before the inquiry suggested that a large number of invoices submitted for payment by various contractors appeared to be for work that did not fall within the scope of work that Council would perform for Sydney Airports Corporation. NOTE: IF ASKED IF SACL INVOLVED SAY THERER WAS NO EVIDENCe BEFORE THE INQUIRY TO SUGGEST SACL HAD ANY INVOLVEMENT IN ANY OF THIS ACTIVITY. SAME WITH CENTENNIAL PARK.
Example of invoice containing vague description of work performed
Example of an invoice containing vague description of work performed.pdf
15
PROTECTED
Presenter
Presentation Notes
This is an example of an invoice that caused concern due to the vague nature of the description of work carried out. However no evidence was available to the Commission outlining exactly what the work performed entailed and as a result it is very difficult to ascertain if the invoice reflects work actually carried out or not.
16 PROTECTED
Challenges faced during invesigations
Not able to approach Public Sector
Agency for assistance. Methods of gathering evidence whilst
in covert stage. Complexity
17
PROTECTED
Presenter
Presentation Notes
Challenges can and do arise throughout an investigation. These challenges can vary in their impact however they can force changes on areas such the investigative methodologies being used, and timeframes under which the investigation is operating. Not able to approach the Public Sector Agency As an example and one which arose during Operation Ricco is that the option of engaging with the relevant public sector agency from an early stage in an investigation may not be available due to an unacceptable risk to the integrity of the investigation. This can be due to the small size of the agency, seniority of the person who is the subject of the allegations or perhaps the number of persons the subject of allegations: This was certainly the case in Operation Ricco as: Goodman was a senior and long time member of Council staff. Not only that as Chief Financial Officer he was in charge of the very area that records that would afford evidence relevant to the investigation were likely to be found. Council was not that big. As it turned out a number of Council staff did become persons of interest in the matter. Therefore it was thought an approach to Council could compromise the investigation as Goodman due to his position stood a strong chance of becoming aware of the investigation. Leading on from this, having an investigation remain in the covert or confidential phase can throw up a challenge involving adhering to time frames available for tasks to be completed. This of necessity involves decisions being made on the prioritisation of tasks and allocation of resources. Alternative methods of gathering evidence whilst in covert stage: In such a scenario it is necessary to look for evidence in different areas. As examples this can include the use of electronic and physical surveillance. We have already seen the value of electronic surveillance in an investigation like this where it is necessary to remain in the covert stage. However as stated evidence can come from a number of sources. One such source is banking records and evidence obtained by the Commission showed large sums of money being directly transferred into the accounts of Goodman as well as indirectly through third party accounts. Furthermore these third parties appeared to have been receiving and continuing to receive large sums from Council. The Commissions power to produce documents is often a valuable tool during as persons or organisations receiving such a notice can be liable to criminal sanctions for disclosing the existence of the notice in a manner likely to prejudice the investigation. There are also strict Non Publication orders placed on the disclosure of a summons for persons called to compulsory examinations. The evidence itself is also subject to strict Non Publication Orders and under the ICAC Act breaching same can also result in criminal sanctions. Complexity: Investigations carried out by the Commission can often be complex and fluid. They may contain multiple allegations involving multiple persons and entities. Such a scenario can present issues in ensuring an investigation remains on-track and within the scope of the investigation which should reflect the allegations being investigated. In such an investigation it is important to have robust processes in place to ensure this. In the Commissions case this is done by way of clearly spelt out reporting processes and policies for making adjustments to an investigations scope. . Proposed changes to the scope of an investigation are only made a sound business case is made to the IMG. Ricco certainly fell under this category as it commenced with about 8 allegations which remained part of the investigative focus for the duration. The operation very quickly mushroomed and as stated earlier this involved the number of persons who appeared to be implicated in the various activities being investigated. Furthermore evidence appeared to indicate that activities were ongoing and had been occurring in the past. As a result did not approach Council until the matter moved to its overt phase. SLIDE 12 Historical Activity: Assessing and identifying evidence collected during investigations on this scale can be a daunting exercise and a question as part of this process is ‘for how long’ the activity has been going on. As stated earlier it appeared from the evidence contained within the bank records that this activity had been going on for a number of years. The challenge then is the issue of accessing more historical records such as those of Council. Additionally if the practice the subject of the investigation extends back over 7 years financial institutions most likely will not retain records past that timeframe. This was certainly a challenge faced by the investigative team in Ricco. Evidence before the public inquiry suggested that this activity had been ongoing and as one witness stated he was involved back as far as 1997. Decision to go overt: A challenge in an investigation where the activity is ongoing is when does the investigation move from the confidential or covert stage to the overt stage. An example of moving to the overt stage of an investigation may simply involve approaching people for interviews or it could involve the execution of search warrants or a combination of activities that most likely will bring knowledge of the existence of the investigation into a broader arena. This can lead to the possible destruction of evidence by persons now alerted to the fact they are the subject of investigation. Such a challenge poses a range of factors that need to be taken into account. As an example with Ricco there was the issue of whether there was an ongoing financial detriment to Council and ratepayers. As a result a decision was made to move to the overt stage and so prevent the continuation of the activity. This involved, amongst other things, approaching COBB and varuious persons of interest. Once Ricco had moved to an overt stage the Commission made further use of its coercive powers to obtain records/evidence from persons and entities where previously it had been deemed an unacceptable risk to the integrity of the investigation to approach them. This almost invariably leads to additional lines of inquiry which have to be followed up. Additional allegations surface/Time constraints: Finally once they move to an overt stage, investigations (particularly in the event the Commission makes a public announcement that it intends holding a public inquiry) can lead to persons approaching the Commission and who supply information about other possibly corrupt activities which hitherto were not within the knowledge of the Commission but can be related to that particular investigation. This poses the challenge of investigating the veracity of such allegations often within quite constrained timelines. In Ricco this was certainly the case. A number of persons approached the Commission with information which was found to be of sufficient interest to form part of the allegations being investigated as part of Ricco and be canvassed at the public inquiry. Again this requires a continuous robust decision making process such as the Commission has in place to ensure an investigation remains on track and that the scope reflects what allegations are being investigated.
Challenges faced during investigations (Con’t)
Historical activity – whether records still exist?
When to move to the overt stage. Additional allegations surface. Time constraints.
18
PROTECTED