Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Ex-CERA staffers referred to SFO over 'conflict of interest'

Tuesday 11 April 2017 05:48 PM

Ex-CERA staffers referred to SFO over 'clear conflict of interest'

By Paul McBeth

April 11 (BusinessDesk) - Two former Canterbury Employment Recovery Authority employees have been referred to the Serious Fraud Office after an investigation into their personal business dealings found a "clear conflict of interest" and that they may have broken the law.

The State Services Commission today released a report by former Solicitor-General Mike Heron into former CERA staffers Gerard Gallagher, Simon Nikoloff and Murray Cleverley over claims the three had a conflict of interest when they set up a private company to participate in a business deal while participating on the other side as employees of the government agency. The allegations emerged in a series of articles by Fairfax Media.

Heron's report found Gallagher and Nikoloff had a conflict of interest by September 2014 which they were aware of and didn't disclose and that there was "a serious and sustained breach of the applicable standards for which a disciplinary process would ordinarily follow". Cleverley wasn't in the same league in that he didn't know of the conflict and didn't take sufficient care to ensure a conflict didn't arise or was disclosed, which Heron said was an error of judgement.

"Whilst I considered whether the conduct might involve provisions of the Crimes Act, it was not my role to reach a view on that," Heron said in his report. "One option is for this report to be made available to the Serious Fraud Office and the Director can determine whether the conduct (and any other relevant conduct) is worthy of investigation."

In a statement, the State Services Commission said there was a "clear conflict of interest".

Commissioner Peter Hughes said he would "refer the results of the investigation to the Serious Fraud Office to consider whether any of the activity is of a potentially criminal nature that requires further investigation".

Hughes said Cleverley today resigned his positions as chair of the Canterbury and South Canterbury district health boards to retain public trust in the organisations after leaving himself and the DHB open to questions about whether conflicts had been managed effectively.

In a separate statement that was issued before the report was released, Gallagher and Nikoloff said the investigation didn't substantiate allegations of criminality, focusing on Heron's comment that "there are aspects of their conduct and the circumstances involved which suggest that the conduct falls short of criminal".

"We maintain that the CERA legal team, leadership and CERA’s external legal team were aware of what we were doing with our outside business interests," Gallagher and Nikoloff said. "Coming from a business background, we have pursued various business interests since before joining CERA, and these interests were fully disclosed to CERA."

They had been hired for the roles because of their business connections, they said.



© Scoop Media

Business Headlines | Sci-Tech Headlines


Crown Accounts: Slightly Softer Growth Expected In PREFU

A slightly softer growth forecast is the main feature of largely unchanged Pre-election Fiscal Update compared to the Budget forecasts three months ago, Finance Minister Steven Joyce says. More>>


Water: Farming Leaders Pledge To Help Make Rivers Swimmable

In a first for the country, farming leaders have pledged to work together to help make New Zealand’s rivers swimmable for future generations. More>>


Unintended Consequences: Liquor Change For Grocery Stores On Tobacco Tax

Changes in the law made to enable grocery stores to continue holding liquor licences to sell alcohol despite increases in tobacco taxes will take effect on 15 September 2017. More>>

Back Again: Government Approves TPP11 Mandate

Trade Minister Todd McClay says New Zealand will be pushing for the minimal number of changes possible to the original TPP agreement, something that the remaining TPP11 countries have agreed on. More>>


By May 2018: Wider, Earlier Microbead Ban

The sale and manufacture of wash-off products containing plastic microbeads will be banned in New Zealand earlier than previously expected, Associate Environment Minister Scott Simpson announced today. More>>