Conflict of Interest and Abuse of Power by a Building Inspector at Brimbank City Council

 

Whistleblowers Protection Act 2001

Conflict of Interest and Abuse of Power by a Building Inspector at Brimbank City Council

June 2009

Ordered to be printed

Victorian government printer

Session 2006-09

P.P. No. 200

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LETTER OF TRANSMITTAL

To

The Honourable the President of the Legislative Council

and

The Honourable the Speaker of the Legislative Assembly

Pursuant to section 103 of the Whistleblowers Protection Act 2001, I present to the Parliament the report of an investigation into the conduct of an officer at

Brimbank City Council.

G E Brouwer

OMBUDSMAN

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Contents

Executive summary

6

section 22A of the whistleblowers protection act

8

investigation

9

use of information and influence to obtain property

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other uses of information and influence to

 

obtain personal gain

14

conflict of interest

15

computer system access and security

18

disposal of public records

19

conclusions

23

recommendations

24

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EXECUTIVE SUMMARY

1.This investigation provides an illustration of a conflict of interest and misuse of power. It demonstrates how vulnerable members of the community can be affected by the action of public officers. It also demonstrates how this can erode the public trust.

2.This investigation into Brimbank City Council (the council) was triggered by a disclosure under the Whistleblowers Protection Act 2001. The allegation was that the council’s building inspector, Mr Peter Anastasi, had used information and influence in his role with the council to obtain a personal advantage in the purchase of a property at 74 McLaughlin Street, Ardeer (the property) from a Buddhist community organisation. It was also alleged that the advantage was obtained dishonestly and adversely affected the honest performance of a public officer’s function.

3.My investigation established that Mr Peter Anastasi:

was assigned to investigate an allegation that there were non- compliant buildings on the property

formed the opinion there were non-compliant structures on the property and consequently caused council to issue a Building Notice and then a Building Order

took advantage of an opportunity to express an interest in purchasing the property before there had been compliance with the Building Order

failed to formally notify his employer of his intention to enter into a contract to purchase the property which he was responsible for inspecting

purchased the property in a private sale

used his position at council to cause repairs to the property he was in the process of purchasing

denies destroying the building complaint file in relation to the property, despite evidence to the contrary

had within four months of purchasing the property ordered the demolition of structures which had been the subject of the Building Order

had made enquiries for subdividing and building on the property within four months of purchasing the property.

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4.In light of the seriousness of the matters raised by this investigation I have recommended council refer the allegation that Mr Anastasi destroyed the 2008 building complaint file and his purchase of the property while a public officer to Victoria Police for its consideration

as to whether a criminal investigation should be conducted in relation to possible breaches of section 19 of the Public Records Act 1973, section 254 of the Crimes Act 1958 and the common law misdemeanour of misconduct in public office.

5.My investigation has identified poor practices within council such as the sharing of a computer username and password. Such practice increases the risk that the integrity of council’s electronic records will be compromised by inappropriate use and/or abuse of the council’s computer system. Furthermore I have identified inconsistent policies within council regarding record-keeping. This gave rise to a situation

where the 2008 building complaint file in relation to the property could be disposed of in a manner inconsistent with statutory requirements.

6.I have made a number of recommendations to the council with the view to improving its practices and procedures. The council has accepted all of my recommendations.

7.Mr Anastasi resigned from the council during my investigation.

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SECTION 22A OF THE WHISTLEBLOWERS PROTECTION ACT

16.This report is made pursuant to section 103 of the Whistleblowers Protection Act 2001. It concerns an investigation into a public interest disclosure about a person who was a public officer when the alleged misconduct occurred and concludes that there is merit in the allegations.

17.Section 22A of the Whistleblowers Protection Act provides that I may disclose, in a report referred to in section 103 of that Act, particulars likely to lead to the identification of a person against whom a protected disclosure has been made if I determine it is in the public interest to do so and if I set out in the report the reasons why I have reached that determination.

18.Having considered the four matters referred to in section 22A(2), I have determined that it is in the public interest to identify the subject of the protected disclosure in this matter by disclosing the following particulars: the subject’s name, occupation and personal details. I have made this determination for the following reasons.

19.I consider that it is in the public interest for the subject of a protected disclosure to be identified in a report to Parliament when the report confirms the allegations made in the disclosure of improper conduct by a person holding public office. Here the misconduct involved misusing that office and the powers it provided him to obtain significant personal advantage at the expense of particular individuals in the community, whose wellbeing should have been his primary objective. I also consider that, because of the nature of the abuse of the public office and of

the public trust which this report has found, it is necessary for the identification of the subject to be disclosed to ensure that persons in the community are not placed at the same risk again.

20.I do not believe that the public interest identified above can be satisfied by any means other than by identifying the subject of the disclosure and

I consider that confidentiality is not appropriate as such a course will not allow the public interest, as earlier identified, to be achieved.

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INVESTIGATION

21.On 14 October 2008 Brimbank City Council (the council) referred to me a complaint which it had received and which I determined to be a public interest disclosure pursuant to the Whistleblowers Protection Act 2001 (the Act).

22.The public interest disclosure alleged that the council’s building inspector, Mr Peter Anastasi, had used information and influence in his role with the council to obtain a personal advantage in the purchase of a property at 74 McLaughlin Street, Ardeer (the property). It was also alleged that the advantage was obtained dishonestly and adversely affected the honest performance of a public officer’s function. On 7 November 2008 I informed the Chief Executive Officer of the council,

Mr Nick Foa, of my determination and my intention to conduct an investigation into the allegations pursuant to Part 5 of the Act.

23.My investigators interviewed and took sworn evidence from current and former officers within the council’s Building Control Services

Department and the Records Department. They also interviewed and took sworn evidence from the previous owner and the tenant of the property. I also obtained and examined the following:

documents and electronic records created and received by the council officers in relation to the building complaint associated with the property - such as entries made on CONFIRM; documents saved on the document management system (TRIM); entries recorded in the electronic Building Order and Notice Register (the register)

documents retained on the building inspector’s computer

e-mail correspondence

correspondence created by the council in relation to the 2008 building complaint which was in the possession of the former owner of the property

documents relating to the sale of the property in 2008, including the contract of sale and notice of acquisition submitted to council

the council’s written policy regarding the handling of building complaints including record-keeping practices

the council’s TRIM training manuals and information management policy

the council’s Code of Conduct.

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24.I note that the council was unable to provide me with its hard copy building complaint file for council’s 2008 investigation regarding the property as the file had been destroyed.

25.During the investigation my officers also viewed the property and took photographs.

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USE OF INFORMATION AND INFLUENCE TO OBTAIN PROPERTY

26.Mr Peter Anastasi was employed by the council as a Statutory Building Inspector (the building inspector) in the Building Control Services

Department since 29 January 2008. He was an authorised officer for the purposes of the administration and enforcement of the Building Act 1993 and Building Regulations (the building law). Following the commencement of my investigation Mr Anastasi resigned from his position at council on 30 December 2008.

27.One aspect of the building inspector’s role is to investigate building complaints and make recommendations to the Senior Statutory Building Surveyor and/or the Municipal Building Surveyor (the council surveyors) whether or not buildings comply with the building law. As a result of these recommendations, the council surveyors may initiate action in relation to buildings that are not compliant.

28.In May 2008, Mr Anastasi was assigned as a building inspector to investigate an allegation that there were non-compliant buildings on the property which was then owned by a Buddhist community organisation. My investigation has established that three months later, on 13 August 2008, Mr Anastasi signed a contract of sale for the purchase of the property from the community organisation. The

contract was signed for the vendors by the Venerable monk and stated the day of sale as 12 August 2008.

29.Between May and July 2008, Mr Anastasi inspected the property and formed the opinion that there were ‘illegal structures’ on it, including a pergola and enclosed verandah. The Building Control Services Department’s policy provides that following an initial inspection of a building, if works have been identified that are not compliant with the building law, the council surveyors may issue a building notice. A building notice requests the owner of the building to show cause why the non-compliant works should not be rectified to comply with the building law. At the expiry of the building notice, if council has not received representations from the owner, a further inspection will be conducted to determine whether the relevant works have been undertaken. If they have not, the council surveyors may issue a building order.

30.Following the inspection by Mr Anastasi, his supervisor, the statutory building surveyor, issued a Building Notice in relation to the property in May 2008. Mr Anastasi conducted a second inspection, most likely on 15 July 2008, and determined that no work had been undertaken to

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rectify the non-compliant structures. As a result, a Building Order was issued on 18 July 2008. A building order requires the property owner to carry out the works within the nominated period. If the council surveyors are satisfied that the building notice and/or building order is complied with, the order or notice will be cancelled and a letter to this effect (‘a cancellation letter’) is sent to the owners of the property. If the council surveyors are not satisfied that the matter has been resolved at the expiry of the nominated period, the council may initiate legal

proceedings against the property owner. The Building Act 1993 provides that a building order remains in force until it is complied with or cancelled.

31.When questioned, Mr Anastasi said that the Venerable monk telephoned him on two occasions prior to the final inspection. In the first conversation, Mr Anastasi said that the Venerable monk sought clarification of the requirements of the Building Order. In the second, Mr Anastasi states that the Venerable monk confirmed that the requisite works had been carried out. Mr Anastasi’s sworn evidence to my officers was that he conducted a final inspection of the property with his supervisor sometime before 10 August 2008. At interview Mr Anastasi initially stated that the former tenant of the property was present at this inspection. Later in the interview Mr Anastasi said that he and his supervisor did not meet anyone at the property during the final inspection. Mr Anastasi indicated that during this inspection he had been satisfied that there had been compliance with the building order. Mr Anastasi explained to my officers that following the final inspection of the property, his supervisor would have issued a cancellation letter.

32.Mr Anastasi said that the Venerable monk telephoned him a third time on 10 August 2008, to express relief at the cancellation of the Building Order and to thank Mr Anastasi for his advice in relation to the matter. Mr Anastasi said that during this conversation the Venerable monk advised him of his intention to sell the property and he expressed interest in purchasing it. This was two days before the contract of sale was entered into.

33.10 August 2008 was a Sunday. When Mr Anastasi was questioned regarding whether he ever attended the property on the weekend whilst carrying out building inspections he stated:

No – absolutely not. I’m a keen fisherman so weekends are precious to me. I don’t want... and especially I wasn’t enjoying my time at council I didn’t want to waste time being associated with jobs.

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34.In contrast, the Venerable monk said that he first rang Mr Anastasi following receipt of the Building Order to clarify what was required. The Venerable monk stated that he told Mr Anastasi of his intention to sell the property during this initial conversation and Mr Anastasi expressed interest in purchasing it. The Venerable monk stated that Mr Anastasi agreed to purchase the property without the Venerable monk having to carry out any of the works that were the subject of the Building Order.

35.Mr Anastasi’s supervisor, who Mr Anastasi alleged attended the inspection some time before 10 August 2008, denies attending any inspections at the property with Mr Anastasi. The council’s electronic customer reporting system, CONFIRM, indicates that the final inspection took place on 12 August 2008, the day of sale of the property. The

sworn evidence I obtained from the Venerable monk and the tenant is that prior to the day of sale and settlement, the works required by the Building Order of 18 July 2008 had not been carried out. Photographs of the property taken after the tenant vacated support this evidence.

I note that on 5 December 2008 Mr Anastasi (now the owner of the property) notified council that he was demolishing structures on the property. Some of the structures he was demolishing were the subject of the Building Order issued on 18 July 2008 which Mr Anastasi had earlier certified as having been demolished.

36.There is no record of a cancellation letter for the Building Order being created in the council’s electronic systems. The property owner, the Venerable monk, did not recall receiving such correspondence. I have been unable to obtain a copy of any cancellation letter as the hard copy complaint file has been destroyed.

37.I am satisfied Mr Anastasi became aware of the Venerable monk’s intention to sell the property as a direct result of his role as a building inspector at the council. Evidence obtained from a number of witnesses and electronic records on CONFIRM contradict Mr Anastasi’s evidence regarding when he conducted the final inspection and who was present.

The Venerable monk and the tenant provided evidence that the Building Order was not complied with at the time Mr Anastasi purchased the property. This evidence is supported by photographs taken of the property after the tenants vacated and Mr Anastasi’s subsequent notification to the council regarding the demolition works.

38.I consider Mr Anastasi has not provided my officers with a truthful recollection of events. I am satisfied that the Building Order was not complied with or cancelled prior to Mr Anastasi’s purchasing and taking possession of the property. I consider Mr Anastasi has misused his position and power as a council officer to obtain an advantage, namely purchasing the property.

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OTHER USES OF INFORMATION AND INFLUENCE TO GAIN PERSONAL ADVANTAGE

39.During my investigation, I found further evidence to support the allegation Mr Anastasi used information and influence resulting from his role as the council building inspector to gain a personal advantage in respect of the property which he was now in the process of purchasing.

40.The following are examples of this, identified by an examination of e-mails sent to and from Mr Anastasi’s council e-mail address:

On 10 September 2008, Mr Anastasi used the council photographs taken during building inspections to demonstrate to his conveyancer damage he alleged the tenants did to the property when they vacated.

On 11 September 2008 Mr Anastasi e-mailed the Venerable monk photos of the alleged damage and requested the Venerable monk carry out certain works to repair it. Mr Anastasi used his council title, ‘Statutory Building Inspector – Brimbank City Council’, in the signature block of the e-mail. Mr Anastasi wrote:

My solicitor is preparing to take the matter to the small claims court but I want to avoid this scenario and instead come to an agreement with you on compensation.

At 3.17pm on 11 September 2008 the Venerable monk e-mailed a reply to Mr Anastasi, apologising for the damage and undertaking to carry out the repairs.

On the 11 September 2008 Mr Anastasi also made e-mail enquiries with his colleagues regarding the status of planning permits

for other properties associated with the Buddhist community organisation.

41.I consider the e-mail of 11 September 2008 from Mr Anastasi to the Venerable monk is an inappropriate use of Mr Anastasi’s position as a public officer. I consider that Mr Anastasi used his position of power and influence to obtain an advantage.

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CONFLICT OF INTEREST

42.Mr Anastasi failed to formally notify his employer of his intention to purchase a property he was currently responsible for inspecting, and of his subsequent purchase of that property. In explaining his actions Mr

Anastasi told my officers:

In hindsight I would have gone to my superiors and said this [Building Order] has been cancelled is it okay if I can do this. But having the knowledge that it had been cancelled, maybe I am young and naïve but I thought I’d make the most of an opportunity to buy a house. Yes working at the council did give me the opportunity to be in contact with this property owner but in no way, shape or form did my position as a council officer... uhm... force him [the Venerable monk] to make the sale nor did it force him [the Venerable monk] to sell it to me for a certain price.

43.At a later stage during the interview, Mr Anastasi also said:

I’m young and this may be a very, very immature way of looking at this whole thing but it was the way I looked at things initially and it’s the reason why I signed that contract it’s the reason why I purchased the property. I had spoken to the property owner. And I can see exactly uhm where the Whistleblower if you like is coming from. Acouncil officer purchasing a property that was uhm being investigated if you like uhm I can understand that. But being told by the owner that yes I want to sell this property after it had met compliance, to a young guy that may be a

little fresh and green around the ears to me that sounded like okay maybe this is just a bit of an opportunity here... uhm, I honestly didn’t think there was anything else to it. Maybe it was a… no it was. I should have asked the question. I should have approached a legal representative perhaps and said look this is what’s happened I received a notification from the owner, where do I stand? I didn’t do that. I’m kicking myself that I didn’t do that. For God’s sake I didn’t rip this guy off. I didn’t push him to do anything.

44.As a council employee Mr Anastasi was bound by the council’s Code of Conduct, which requires council employees to avoid conflict of interests, as follows:

Employees must ensure there is no conflict or incompatibility between their personal interests, whether pecuniary (i.e. relates to money) or non- pecuniary, and the impartial fulfilment of their council duties. Members of the public need to be confident that council staff make decisions free of any conflict of interest.

It is not possible to define all potential areas of conflict of interest but a number of situations are referred to below. If an employee is in doubt as to whether a conflict exists, they must raise the issue with their manager.

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45.The council’s Code of Conduct is consistent with the conduct principles outlined in the Local Government Act 1989. I note section 95(1)(b) of the Local Government Act states:

Council staff must in the course of their employment – act with integrity including avoiding conflicts of interest.

46.Mr Anastasi told my officers that he did not receive training on the council’s conflict of interest policy. My investigation revealed that the council provides each new staff member with a copy of the Code of Conduct and 15 minutes induction training on it. The council has advised that Mr Anastasi attended this induction training.

47.Under the Local Government Act, the council is required to maintain a register of interests. Section 81 of the Local Government Act requires a person who becomes a councillor, a member of a special committee and senior council officers to make declarations regarding certain prescribed interests.1 The Chief Executive Officer (CEO) may also nominate other council staff to be required to comply with section 81 of the Act. The CEO of the council has advised me that he maintains a ‘Prescribed Interests Register’ as required by the Local Government Act. The CEO also advised me that in December 2008 he expanded the staff required to make declarations to include all staff who have a direct delegation from council, for example health inspectors and building inspectors. The CEO has advised that he will be amending the relevant policy documents to reflect the new practice.

48.Mr Anastasi’s evidence demonstrates he had little understanding that, owing to his role as a statutory building inspector, he was in a position of power and influence when interacting with the Venerable monk regarding the purchase of the property. Notwithstanding Mr Anastasi’s claim that he did not ‘rip off’ the Venerable monk, Mr Anastasi used information and influence arising from his position as a council officer to purchase a property to his own advantage.

49.The Venerable monk informed my officers that the council’s Building Order was the catalyst for his decision to sell the property. When Mr Anastasi was made aware of this intention I consider that he took the opportunity to express an interest in purchasing the property. Mr Anastasi purchased the property in a private sale. On the day of sale of the property an entry, logged by ‘Peter Anastasi’, was made in CONFIRM that there had been compliance with the Building Order. Whereas in fact there had not been compliance. Mr Anastasi also used his position at council to cause repairs to the property he was

purchasing. Sometime in the next four months the building complaint file for the property was destroyed. Within four months of purchasing

1

See section 81(6) and (7) of the Local Government Act 1989.

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the property Mr Anastasi had ordered the demolition of structures which had been the subject of the Building Order. He also made enquiries for subdividing and building on the property. Mr Anastasi subsequently could not recall making the entries in the CONFIRM system and denied destroying the building complaint file. An objective analysis of this sequence of events surrounding Mr Anastasi’s purchase of the property would lead a reasonable person to perceive a conflict between Mr Anastasi’s private interest and his responsibility as a public official.

50.In expressing an interest in purchasing the property I also consider Mr Anastasi failed to comply with the council’s Code of Conduct. I do not believe that youth and inexperience are a sufficient excuse for failing to comply with the council’s Code of Conduct. Mr Anastasi was clearly motivated by self-interest.

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COMPUTER SYSTEM ACCESS AND SECURITY

51.In order for a council officer to make an entry into CONFIRM, a username and password are required. The only existing council record that the Building Order had been complied with is an entry on CONFIRM logged by “Peter Anastasi” on 12 August 2008 at 9:53:20. This entry stated that an inspection was undertaken on 12 August 2008 and that there was compliance with the Building Order and Building Notice. Mr Anastasi stated to my officers that an inspection did not occur on 12August 2008 and that he could not recall making the CONFIRM entry. Mr Anastasi also said:

Look I’m saying that entry was made, we can assume that I did make the entry, but there were several occasions where I did give my password away and I’m not gonna admit to something that might not have been done by myself.

52.Mr Anastasi said that he had provided his supervisor with his computer username and password. He said he did not know why his supervisor wanted his username and password. Mr Anastasi’s supervisor said

he had asked for this information in order to close down an Excel spreadsheet, which Mr Anastasi had a habit of leaving open. Mr Anastasi’s supervisor denied making the CONFIRM entries logged as “Peter Anastasi” in relation to the property or using Mr Anastasi’s username and password to access anything else on his computer.

53.MrAnastasi’s supervisor also said that the council officer assigned to investigate a building complaint would make the relevant entries on CONFIRM regardless of whether or not he attended an inspection with the officer.

54.I accept Mr Anastasi’s supervisor’s evidence in relation to this.

However, I am concerned that a senior council officer asked for and used the computer network username and password of his subordinate rather than utilising the support of the IT department. The sharing of computer usernames and passwords increases the risk that the integrity of council’s electronic records will be compromised by inappropriate use and/or abuse of the council’s computer system. I have made a number of recommendations to the council in this regard.

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DISPOSAL OF PUBLIC RECORDS

55.The Building Control Services Department has written policies prescribing the record-keeping requirements for investigations into building complaints. Council officers in the Building Control Services Department advised my officers that these written policies were current and applied to the activities undertaken by Mr Anastasi.

56.The Building Control Services Department’s policies state all details regarding an inspection and the requisite action taken must be entered into the council’s electronic customer request system, CONFIRM. In accordance with the requirements of section 126 of the Building Act, officers are also required to record the details of building notices and orders in the register.

57.The policies also stipulate that a hard copy building complaint file must be created, maintained and stored in a designated cabinet. Copies of all correspondence in relation to the complaint must be retained. This requirement is particularly important given that building notices and orders may be tendered as evidence in legal proceedings. At the conclusion of an investigation the Building Control Services

Department’s policies state that the complaint file must be sent to the council’s Records Department so that all documentation, including correspondence, is scanned and attached to the electronic property file in the document management system TRIM.

58.On 26 November 2008 my office requested the council’s hard copy building complaint file for the property. The council advised that it had been unable to locate the file and provided my office with a file note in which the Manager of Building Control Services records that he asked

Mr Anastasi to locate the 2008 building complaint file on 28 November

2008. The Manager of Building Control Services states:

When I asked Peter for the enforcement file [the building complaint file] he indicated that when the matter was finalised he destroyed the

enforcement file [the building complaint file]. I asked why he would have done this and he said that the original letters were stored on the Council document management system (TRIM) and that records department advised that once the matters were finalised they were not to be sent to them for storage as they did not have the time or space to store or scan the documents electronically and as the matter was finalised he did not see a problem in destroying the file.

I said that this was not the approach that was documented in the council quality procedure and explained how important it is that copies of the original documents are kept in case of legal challenge or an ongoing

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dispute where they could be provided as evidence. I also explained how the copy of the original document in TRIM was in Word format and could be readily altered.

Peter said that this was the advice he had been given. I said I could not believe that [Mr Anastasi’s supervisor] would agree with such an action as [Mr Anastasi’s supervisor] is very particular about providing and retaining the documentation associated with any enforcement action.

59.Mr Anastasi acknowledged that a hard copy file for the 2008 building inspections had existed. He acknowledged that the Manager of Building

Control Services had asked him for the file, but denied telling the

Manager of Building Control Services that he had destroyed it. Later in the interview Mr Anastasi said he told the Manager of Building Control Services:

After we undertook that TRIM training the [Team Leader] pulled [Mr Anastasi’s supervisor] and I aside because [Mr Anastasi’s supervisor] was sending, this is years before I had even started, he was sending a whole heap of files to records for recording. She [the Team Leader] informed [Mr Anastasi’s supervisor] and I that no longer has to take place, the files. If you want to keep a hard copy file that’s fine but all the information should be recorded onto TRIM. With that hard copy file ‘get rid of it’ don’t send it to us. Okay. And [Mr Anastasi’s supervisor] told me that with the files that had been saved onto TRIM you can get rid of them. And that’s what I told [the Manager of Building Control Services].

60.Mr Anastasi said he was uncomfortable with instructions to destroy files and denied ever acting on these instructions. The Team Leader did not recall having this discussion with Mr Anastasi’s supervisor and Mr Anastasi. The Team Leader said she was unaware that Mr Anastasi and his supervisor were creating their own files. The Team Leader said she would not have advised them to dispose of files at the conclusion of a building complaint investigation, as the council must keep files for the period outlined in the Public Records Office Victoria’s standard for the retention and disposal of local government records. The Team

Leader said in a general discussion during TRIM training she may have explained that documents should be saved directly in TRIM and that this meant hard copies of documents did not need to be created.

61.Mr Anastasi’s supervisor stated that the current practice in the Building Control Services Department is to send hard copies of documents stored in the building complaint file, including building notices and building orders, to the records department for scanning onto TRIM upon completion of the matter. Mr Anastasi’s supervisor stated he

was unaware of what the Records Department would do with the

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documentation after scanning or of any other building complaint files being destroyed. Mr Anastasi’s supervisor stated that he provided new employees with a copy of the relevant council procedures and had

’never instructed anybody to destroy any file’. Mr Anastasi’s supervisor also denied instructing Mr Anastasi to destroy the 2008 building complaint file.

62.The Team Leader also stated that the written policies for the management of building complaint files by the Building Control Services Department was not consistent with the information management policy endorsed by the council’s executive management team in May 2008. Since May 2008 the council has been using a centralised system for the creation and storage of hard copy files. I note this policy clearly states that corporate documents, such as building notices and building orders, must be disposed of in accordance with the ‘General Disposal Authority for Local Government’ and/or the relevant legislation.

63.Pursuant to section 12 of the Public Records Act 1973, the Public Records

Office Victoria has developed a standard for the ‘General Retention &

Disposal Authority for Records of Local Government (PROS 98/01)’. This standard provides that documents created for the purposes of enforcing the building law are to be destroyed three years after the date of compliance. It is an offence under section 19 of the Public Records Act for a person to destroy a public record contrary to the standards established under section 12 of the Public Records Act. I also note section 254 of the Crimes Act 1958 provides that it is an indictable offence for a person to destroy a document which the person knows is reasonably likely to be required in evidence in a legal proceeding.

64.As a new council employee Mr Anastasi attended training on the use of TRIM. He also attended refresher training on 27 May 2008. The manuals provided to participants in these sessions make no reference to the destruction of hard copy files. I also note that Mr Anastasi had a building inspection ‘complaints process’ document on his personal drive on his work computer which clearly states the requirement to retain council files.

65.The Building Control Services Department’s record-keeping policies and practices are contrary to the information management policy which was endorsed by the council’s executive management team in May 2008. These inconsistent policies and practices resulted in a situation where there was no adequate supervision of the handling of files

and enabled a situation to occur where the 2008 building complaint file could be disposed in a manner inconsistent with statutory requirements.

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66.Mr Anastasi denies the claim that he orally reported destroying a council file. According to the Building Control Services Department’s written policy, the building complaint file should have provided a complete primary record of the action the council took in relation

to the property. I consider that the disposal of the council file may constitute a breach of the Public Records Act and/or the Crimes Act. Mr Anastasi may also have committed the common law misdemeanour of misconduct in public office. As a result, I have recommended that the council refer this matter to Victoria Police.

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CONCLUSIONS

67.I consider that the allegation that Mr Anastasi used information and influence resulting from his role with the council to obtain a personal advantage, that is the purchase of the property, has been substantiated. Mr Anastasi purchased the property at a time when he was the building inspector responsible for following up non-compliant structures on the property. The Building Order issued in relation to the non-compliant structures on the property had not been complied with nor cancelled prior to Mr Anastasi’s purchasing the property. This was a clear conflict between Mr Anastasi’s personal interest and his role as a public officer.

68.Mr Anastasi failed to understand the concept of conflict of interest and the implications this has on the public trust in local government. On expressing an interest in purchasing the property Mr Anastasi failed to comply with the council’s Code of Conduct and ensure there was no incompatibility between his personal interest and the impartial fulfilment of his council duties.

69.Mr Anastasi presented as a poor witness providing information which was inconsistent with council records and witness accounts. Council records for which he was responsible have not been retained. This is of concern considering council’s requirements under the Public Records Act and the Crimes Act.

70.This investigation provides an illustration of a conflict of interest and misuse of power. It demonstrates how vulnerable members of the community can be affected by the action of public officers. It also demonstrates how this can erode the public trust. The investigation also demonstrates the importance of internal controls and compliance auditing in ensuring the practices of council officers are: consistent

within the organisation; compliant with statutory obligations; and able to prevent their employees acting in their own interest while holding a position as a public official. My recommendations will assist council in achieving this objective.

71.Mr Anastasi was provided an opportunity to respond to my conclusions but failed to do so.

G E Brouwer

OMBUDSMAN

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RECOMMENDATIONS

1)The council remind its officers to maintain the integrity of its computer systems by keeping their unique username and passwords confidential.

The council’s response:

Agreed.

2)The council counsel Mr Anastasi’s supervisor in relation to utilising a colleague’s computer username and password.

The council’s response:

Agreed.

3)The council provide all new employees with a detailed training session on the Code of Conduct, including conflict of interests. An outline of the program should be provided to my office within three months.

The council’s response:

Council already provides all new employees with training on the Code of

Conduct which includes a section on conflict of interest. In addition, since the recent changes to the Local Government Act, reference is specifically made to the Act’s new conflict of interest provisions. More detailed and specific induction information will be provided in future. An outline of the program will be provided within the required time.

4)The council provide regular refresher training to all employees regarding their duties and obligations under the Code of Conduct.

The council’s response:

Agreed. A program will be developed.

5)The council amend its ‘Register of pecuniary interest’ policy to reflect the CEO’s decision that all staff with direct delegation from council be ‘nominated officers’ for the purposes of section 81 of the Local

Government Act.

The council’s response:

Council supports the recommendation.

6)The council rewrite the Building Control Services Department’s policies, including ‘Dealing with customer request system complaints (CONFIRM)’ and ‘Issuing of building notice/orders emergency orders and infringement notices’, to ensure the department’s record-keeping

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practices are consistent with the council’s information management policy and the relevant legislative requirements. The revised policies should be provided to my office within three months.

The council’s response:

Agreed. Revised policies will be provided.

7)The council provide training to all employees in the Building Control Services Department regarding the revised record-keeping policies and the subsequent changes to the department’s practices, including the use of TRIM. An outline of the training provided to the Building Control

Services Department should be given to my office within three months.

The council’s response:

Agreed. An outline of the training program will be provided.

8)The council conduct a bi-annual audit of the Building Control Services Department’s record-keeping practices to check compliance with the information management policy. The audit should be conducted by appropriately qualified staff from the Records Department. An outline of the audit process should be given to my office within three months.

The council’s response:

Agreed. An outline of the audit process will be provided.

9)The council ensure all staff are provided comprehensive training on the council’s information management policy and associated record- keeping practices.

The council’s response:

Agreed. A training program is currently in place but it will be reviewed to ensure it is comprehensive and available to all staff.

10)That council refer the allegations Mr Peter Anastasi destroyed the 2008 building complaint file and his purchase of the property while a public officer to Victoria Police for its consideration as to whether a criminal investigation should be conducted in relation to possible breaches of section 19 of the Public Records Act, section 254 of the Crimes Act and the common law misdemeanour of misconduct in public office.

The council’s response:

Agreed.

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Other reports

Whistleblowers Protection Act 2001

Investigation into the alleged improper conduct of councillors at Brimbank City Council

May 2009

Investigation into Coporate Governance at Moorabool Shire Council

April 2009

Crime Statistics and Police Numbers

March 2009

Whistleblowers Protection Act 2001

Report of an investigation into issues at Bayside Health

October 2008

Probity controls in public hospitals for the procurement of non-clinical goods and services

August 2008

Investigation into contraband entering a prison and related issues

June 2008

Conflict of interest in local government

March 2008

Conflict of interest in the public sector

March 2008

Investigation into VicRoads driver licensing arrangements

December 2007

Investigation into the disclosure of electronic communications addressed to the Member for Evelyn and related matters

November 2007

Investigation into the use of excessive force at the Melbourne Custody Centre

November 2007

Investigation into the Office of Housing’s tender process for the Cleaning and Gardening Maintenance Contract -

CNG 2007

October 2007

Investigation into a disclosure about WorkSafe and Victoria Police handling of a bullying and harassment complaint

April 2007

Own motion investigation into the policies and procedures of the planning department at the City of Greater Geelong

February 2007

Conditions for persons in custody

July 2006

Review of the Freedom of Information Act

June 2006

Investigation into parking infringement notices issued by Melbourne City Council

April 2006

Improving responses to allegations involving sexual assault

March 2006

Investigation into the handling, storage and transfer of prisoner property in Victorian prisons

December 2005

Whistleblowers Protection Act: Ombudsman’s Guidelines

October 2005

Own motion investigation into VicRoads registration practices

June 2005

Review of the Freedom of Information Act: discussion paper

May 2005

Review of complaint handling in Victorian universities

May 2005

Investigation into the conduct of council officers in the administration of the Shire of Melton

March 2005

Discussion paper on improving responses to sexual abuse allegations

February 2005

Essendon Rental Housing Co-operative (ERHC)

December 2004

Complaint about the Medical Practitioners Board of Victoria

December 2004

Ceja task force drug related corruption: second interim report

June 2004