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No substance to allegations against three former CERA staff

Media Release

17 May 2017

No substance to allegations against three former CERA staff

An investigation by the Department of Prime Minister and Cabinet into three former staff members of the Canterbury Earthquake Recovery Authority (CERA) has found no evidence of inappropriate conflicts of interest.

The Chief Executive of DPMC, Andrew Kibblewhite, says a thorough forensic review, involving independent investigators from the firm Beattie Varley, found there was no basis to the allegations.

“Nothing was found to provide me with any reason to request the State Services Commission to conduct any further investigations. I am satisfied the investigation found the accusations concerning these three individuals were without foundation. I have written to the State Services Commissioner Peter Hughes to advise him of the findings and my decision.”

Allegations against the three were made by two other former colleagues, Gerard Gallagher and Simon Nikoloff, while those two men were being investigated. That inquiry, by Michael Heron QC, found Mr Gallagher and Mr Nikoloff did have clear conflicts of interest while working for CERA.

The allegations of Mr Gallagher and Mr Nikoloff suggested three other staff members had business interests that overlapped their CERA responsibilities. There were no specific allegations about any property transactions.

“The men who made the allegations were spoken to as part of this investigation even though they had told the Heron inquiry they had no evidence or further information to put forward. They confirmed that remained the case and that they had no more to add.”

Mr Kibblewhite says the investigators from Beattie Varley received full co-operation as they looked into the allegations, including a range of material being made available.

“I want to acknowledge the co-operation and assistance received during this investigation, both from the parties directly concerned and from other former staff and managers at CERA. Mr Kibblewhite says he is confident the matters raised have been thoroughly investigated.

“It is critical people’s faith in the public service is maintained. While the Heron inquiry found very poor behaviour and judgement on the part of two particular individuals, the vast majority of public servants carry out their work in a highly professional manner and with great integrity.”

ENDS

Note to editors: The full Beattie Varley report will not be released to protect the identity of the three individuals. In order to meet the public accountability requirements of the Official Information Act the first part of the report, including the summary, is provided below.

Andrew Kibblewhite’s letter to Peter Hughes is also attached.
DPMC_to_SSC_16May2017.pdf

Beattie Varley Report – first part

Summary

1. We report on the allegations relating to whether three further CERA personnel had conflicts of interest, particularly:

we advise on a suitable methodology (including the scope of document search) for a preliminary investigation;

we have completed that preliminary investigation, including interviewing affected parties and relevant ex-CERA managers where we considered it necessary to do that;

we have reached a view as to whether any further investigation is warranted.

2. The allegations as received, while naming certain people and their CERA roles, did not provide any specific information about the conflicts of interest alleged, including any particular property transactions.

3. We consider that the work undertaken by DPMC along with the scope of the documents that we were provided with, when combined with the further interviews that we conducted, comprised a suitable base from which to assess the allegations made. In the interviews that we conducted, we found people to be cooperative and open in answering our questions and they were also willing to provide any further information if we considered it necessary.

4. We consider, in relation to each of the three allegations, and on the basis of the information provided to us, that no further investigation is warranted. It would, of course, be appropriate to reconsider this conclusion if new information was to become available.

Instructions

5. On 21 April 2017, you instructed us in respect of certain allegations made during Michael Heron’s investigation of three former Canterbury Earthquake Recovery Authority (CERA) staff members. In summary, you wanted us to consider and complete pre-investigation enquiries in respect of allegations made by Gerard Gallagher and Simon Nikoloff in their response to Mr Heron’s investigation.

6. Mr Gallagher and Mr Nikoloff had made the following statement/submission at paragraph 33 of their joint reply to Mr Heron’s draft report: (information withheld to protect names and roles of the three individuals)

7. Mr Gallagher and Mr Nikoloff did not provide any additional information in support of these allegations at the time of their joint submission and nor did they explain how they were in a position to make them. They did not expand on their written submissions at their interviews with Mr Heron.

8. Using materials already collected by DPMC along with any other material that we required, you asked us to:

a. Provide advice as to a suitable methodology and scope of document search;

b. Complete any outstanding pre-investigation enquiries;

c. Interview any or all of the three affected individuals and the ex-CERA managers that you identified, if we considered necessary, and

d. Reach a view (and advise) as to whether we believe further investigation work is warranted.

Methodology and the pre-investigation process

9. In order to determine if an allegation merits a full investigation it is important to identify what documentary and oral material ought to be obtained and considered. When the allegations are unspecific and unsupported by corroborating information (as they are in this matter – see their full extent in paragraph 2 above) it is important to treat them seriously but be aware of the risk that there may not be any substance to them. An informed assessment should precede any decision on whether to commence a full investigation.

10. In this matter, that assessment should look to the following sources:

a. Documents that might establish certain core facts

b. Oral information and explanations from identified parties, including supervisors and the parties alleged to have the conflict

c. Further information from those making the allegations.

11. Once this material has been collected and considered, a decision can be taken on whether there are grounds for further enquiries.

12. As to 10c above, we have contacted Mr Gallagher and Mr Nikoloff. They could not expand on the material they provided as part of their submissions to Mr Heron and advised that they had no specific knowledge in support of the allegations made.

13. A decision not to pursue a full investigation should be conditional upon the receipt of any new information, material to the decision.

14. We believe that a suitable methodology and approach has been followed, combining the enquiries made by DPMC with the further work that we undertook.


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