Matt Nippert is a business investigations journalist.

Court hears how council 'perks' kept quiet for fear of jealousy

Stephen Borlase (centre) and Murray Noone (right) at Auckland High Court.
Stephen Borlase (centre) and Murray Noone (right) at Auckland High Court.

Council staff were told by allegedly corrupt managers that domestic travel junkets and four-figure long lunches gifted by contractors were "just a perk," a court has heard.

And a more junior staff member told the High Court at Auckland the receipt of these gifts were not formally declared, for fear that colleagues not in the loop would get jealous.

Stephen Borlase, of roading contractor Projenz, and former Rodney District Council and Auckland Transport senior manager Murray Noone are on trial in the High Court at Auckland facing charges of corrupting a public official through bribery.

The pair have pleaded not guilty to all charges.

Over the past week the court has heard of more than $400,000 in gifts lavished by Projenz on council staff responsible for roading contracts. These gifts included Rugby World Cup tickets, iPhones, attendance at swanky lunches and international and domestic travel.

The court yesterday and today heard evidence from Simon Mann, a lower-ranked former council employee who worked in the road management divisions of both RDC and Auckland Transport under Noone.

Crown prosecutor Brian Dickey walked Mann though a half-dozen domestic trips between 2007 and 2012, mostly to Queenstown, where Borlase was shown to have covered thousands of dollars in airfares, rental car and hotel bills.

Mann said the first time he took one of these holidays he wasn't expecting Borlase to pick up the bill. "When I spoke to my manager about it, he told me it was just a perk."

The manager in question, Barrie George, pleaded guilty on the eve of trial to accepting more than $100,000 in bribes from Borlase.

Dickey asked whether Mann ever questioned why he was being showered with gifts worth thousands of dollars: "Did you ever question ... why Borlase or Projenz were paying these sorts of expenses for you?"

Mann replied, "I asked Mr George 'was this OK with Murray Noone?' and he said yes it was."

Dickey asked if Mann had ever declared these gifts to other council management. Mann said he had only made his immediate superior aware and told no one else.

"I didn't think it was necessary for other people to know. They might be jealous they hadn't been asked."

Dickey also questioned Mann about his attendance at a mid-week long lunch at Euro restaurant in July 2008. The court had earlier heard the bill for that function, for 10 people, totalled $5500 and was covered by Borlase.

Mann said he had no idea when the event, which started at 12:30pm, ended. "It was dark," he said.

"There were a few people there, and a lot of alc-" he said, pausing. "Euro's fairly expensive, isn't it?"

Asked about the quantity of alcohol consumed, Mann said: "There was a few beers and wines."

Mann also said Borlase had booked him and other council staff hotel accommodation in the central city on the night of the lunch, although Mann said he didn't check in as he caught a taxi home instead.

Under cross-examination from Ron Mansfield, acting for Borlase, Mann was quizzed over whether these meals and trips had influenced any of his decision made on behalf of council.

"So, other than Projenz going out of its way to build a good working relationships with council staff, no pressure at all was placed on you to do anything other than doing your job?"

"No," replied Mann.

"Did you bend the rules in favour of Projenz at any point?"


Yesterday the court heard from Kevin Ramsay, the director of finance at Rodney District Council and later the general manager of finance at Auckland during the period of the alleged offending.

Ramsay said both organisations had formalised conflict of interest and gift policies.

"The fundamental notion was the gift shouldn't be accepted if it would lead to even a perception of a conflict. Exceptions were understood, though, for small gifts. The same was true of functions - if it was truly for the building of relationships, but small value only," he said.

Asked whether gifts of travel for employee's partners could be accepted under council rules - as the Crown alleged occurred on numerous occasions - Ramsay said: "I couldn't see any basis for that, even under extreme circumstances."

Ron Mansfield, acting for Borlase, contended council budgets for training and development, and staff salaries, were "meagre" compared to their private sector contractor counterparts.

Ramsay said there could be tensions, but council staff had more generous working conditions and expectations of behaviour were also different between the two sectors.

"There is an extra duty of care in the public sector, because there are public funds involved. Whereas the private sector is quite different," he said.

The trial, into the second of a scheduled seven weeks before Justice Sally Fitzgerald alone, continues.

- NZ Herald

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