Local-body private dealings issue

Press, 19 August 1977, Page 17

Local-body private dealings issue

Private business dealings by local-body officers — an issue that concerned the Christchurch Citv Council last year — will be discussed soon with local-authority organisations by the Minister of Local Government (Mr Highet). A recent report to Parliament said that some local officers were in a position to

use information, gained through their public lobs, to help them make money in outside trading activities. In his report, the AuditorGeneral (Mr A. C. Shailes) said that cases had come to the notice of the Audit Office in the last few years. Mr Shailes did not name specific councils. He said that that would not be fair, since such activities were not technically illegal. They were not widespread. He said situations investigated had been within the law, apparently because of a lack of legal control. ! Mr Highet said later that the anomaly between controls on State servants and local authority officers had not been called to his attention before the Auditor-General’s report, and he would raise the matter at his next meeting with the Municipal Association and Counties Association.

He did not think specific legislation would be needed to rectify the fault, unless local bodies wanted a law to outlaw outside business practices.

“In the State services, strict rules apply to the involvement of State servants in business ventures,'* Mr Shailes said in his report, “and similar rules should apply to local-authority officers.

j “Commercial involvement by local-authority officers is, to say the least, unwise, particularly where there is a

conflict of interest with their official duties.”

Last year, the Christchurch council was faced with a situation in which the then housing and property director was shown to have private interests in property-development companies.

Council officers had received a formal approach from the Audit Office on the matter. The property officer agreed to liquidate or.e company and divest himself of interests in other private companies. There was never any evidence that he had used his council position to his own advantage. “The officers are sometimes in a position within the local authority to have access to information which could assist them towards pecuniary gain in a business venture,” Mr Shailes said.

“Local-authority members are restricted in activities of this nature by the provisions of the Local Authorities (Members’ Interests) Act,” he said. “The only restrictions on employees, however, are those which the local authority sees fit to include as a condition of employment at the time of engagement.”

Mr Shailes said he had been examining areas, such as the engineering industry, where facets of the industry could be related to a localbody officer’s work. His report was a warning that such activities were not really ethical. The Christchurch General Manager and Town Clerk (Mr J. H. Gray) said that the only Audit Office report on local council officers had been the one publicised last year. Mr Shailes said that provisions of the Secret Commissions Act could apply in some cases. That act said an offence was committed when an employee failed to disclose his monetary interest in a contract made by him on behalf of his local authority, unless that interest was already known to his employer.