Matt Nippert is a business investigations journalist.

Florida honeymoon, $3000 lunch: corruption trial begins

Defendants Stephen Borlase, centre, and Murray Noone, right, pleaded not guilty to all charges related to alleged corruption. Photo / Doug Sherring
Defendants Stephen Borlase, centre, and Murray Noone, right, pleaded not guilty to all charges related to alleged corruption. Photo / Doug Sherring

The trial of Auckland council staff accused of corruption has heard more details of lavish entertainment laid on for public servants, including a $3000 lunch bill and honeymoon accommodation in Florida.

The trial of Murray Noone and Stephen Borlase, who face rare charges of corrupting public officials through bribery, began today at the High Court at Auckland.

Noone is a former senior manager with Rodney District Council and, later, Auckland Transport. He faces six charges of receiving bribes from Borlase totalling $1.1 million.

Borlase is the principal of roading contracting firm Projenz, who faces eight charge of bribing Noone and other council staff, and also four charges of inflating invoices to cover the cost of his offending.

The pair this morning formally recorded their pleas of not guilty and they are expected to mount a vigorous defence of the charges during the seven week judge-alone trial before Justice Sally Fitzgerald.

Crown prosecutor Brian Dickey said Projenz extended largess to a number of council staff, citing a $3,000 lunch for RDC staff days after the awarding of a lucrative contract and $69,000 in meal expenses accrued by Projenz for Auckland Transport staff in less than three years.

Dickey said the gifts included honeymoon accommodation in Florida for the daughter of Barrie George, Noone's deputy. George was originally charged alongside the duo but pleaded guilty and was sentenced on two charges of accepting bribes totalling around $100,000 earlier this month.

Dickey revealed George had accepted a total of 20 overseas trips for himself and his family from Projenz and said - citing an email where George discussed with Borlase a work trip to Dunedin - the ongoing relationship had warped George's sense of right and wrong.

"George was so beholden to Borlase and their relationship was so distorted from acceptable he was discussing with Borlase as to which employee would be appropriate to send to a conference," Dickey said.

The email saw George say he'd also make the trip himself, but would not attend the conference as he was interested in travelling "only for festivities".

Dickey said analysis of Projenz's financial statements showed the company move from making a tiny profit of $36,000 on sales of $1.2m in 2006 when the alleged offending began, to profits of $3.8m on sales of $8.2m in 2012.

By the end of the period, Council contracts partly overseen by Noone and George accounted for 80 per cent of Projenz's business.

This morning Dickey produced a November 2007 email from Borlase written to a Projenz administrator requesting that details of travel and accommodation provided by the company to public officials not be sent to council email addresses.

"We needed to protect ourselves and the recipient from wandering eyes," Borlase wrote.

Dickey argued the extent of the alleged corruption stretched beyond the defendants and included benefits for a large number of council staff.

He argued the duo's action had "created a propensity for, and a culture tolerant of, corruption", citing long lunches at city eateries including The French Cafe and extensive spending on liquor, travel and entertainment.

Dickey said other council staff would give evidence that the culture of gratuity on trial was extensive.

"The total paid to council staff paid to do their job went vastly beyond what could be called a legitimate business expense. Those employees were compromised by the gifts they accepted," he said.

Dickey said Noone had a prexisting relationship with Borlase and Projenz before joining RDC in 2005 in a position paying a $165,000 annual salary.

Dickey said the financial relationship continued while Noone was employed as a public official with invoices regularly submitted to Projenz for "consulting" work. These invoices saw Noone's public salary increased by around $8500 a month - but Dickey said they were a sham.

"There is no evidence Noone provided any consulting services to Projenz," he said.

Dickey said Borlase covered the costs these invoices, as well as the travel and entertainment expense of public officials by dishonestly inflating Projenz's invoices to councils.

"In effect RDC was paying the bribes of its own officials," he said.

The trial continues.

- NZ Herald

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