After lengthy delays, Auckland Transport has released more details about a team leader who awarded contracts to a roading company, which subcontracted them back to a company owned by his wife.
The issue came to light after the Herald raised allegations with AT in late 2015. The council body has only ever released limited details of the case and not named the staff member Erle Bencich until now - although the Herald named him in 2016.
A review of the case by the Ombudsman took two years, prompting the Ombudsman to apologise to AT in April for the "inordinate delay in progressing this matter".
Any suggestion that AT has been deliberately obstructive or less than transparent is demonstrably incorrect
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The Bencich case is the second case to blight AT's road maintenance department. In a separate and unrelated case in 2016, manager Murray Noone was found guilty in the country's largest bribery and corruption case and sentenced to five years' jail. Another manager in the case, Barrie George, pleaded guilty and was sentenced to 10 months' home detention.
In 2016, the Herald revealed that Bencich was involved in awarding contracts to the roading contractor Fulton Hogan, who then subcontracted work back to drainage and pipeline inspection company IDI Contracting Ltd.
At the time, Bencich's wife was listed as the sole director of of IDI Contracting under her maiden name Donna Opai.
AT said in 2016 that an internal investigation found no evidence of illegal activity, but it was determined the individual had shown a clear lack of judgment, not followed its conflicts of interest policies, which ended in his employment ending on November 10, 2015.
At the time, Fulton Hogan chief executive Robert Jones said in late 2015 the company was made aware that an AT employee was being investigated for alleged misconduct and following its own review found a subcontractor engaged by the company did have links with an AT employee.
He said company employees involved believed the potential conflict of interest was declared within AT, saying at no point did the company or employees derive additional benefits from engaging the contractor. Fulton Hogan confirmed the subcontractor was IDI Contracting.
The Herald requested a copy of the investigation under the Local Government Official Information and Meetings Act in March 2016, which AT refused to protect the privacy of the individuals named and to maintain legal professional privilege, adding "we now consider the matter closed".
The Herald referred the matter to the Ombudsman, citing public interest in knowing more details about the possible abuse of public funds.
After a review of the case, Ombudsman Leo Donnelly said AT was entitled to refuse the Herald's request for the investigation documents for privacy reasons, but it should release an "expanded statement" to meet the countervailing public interest.
"There is a high public interest in adequate transparency concerning issues around conflicts of interest in the public sector and the awarding of contracts from public money.
"An allegation that a local authority employee benefited from an undeclared conflict of interest is a serious matter, even where criminal offending is ultimately not proven," the Ombudsman said.
In the expanded statement containing details identified by the Ombudsman, AT named Bencich and IDI Contracting for the first time.
It said the investigation found that Bencich had been a founding director and shareholder of IDI, had since stood down from that role and ceased to be a shareholder, and that IDI had been subcontracted to Fulton Hogan to work on various AT contracts.
"Mr Bencich was aware that IDI was working for Fulton Hogan on the West Road Corridor maintenance contract and had been involved in that project in a decision-making capacity," the statement said.
AT said it had not identified any other decision-making roles by Bencich outside the West Road Corridor contract, nor did it find any evidence of illegal activity.
The investigation did not establish that Bencich had benefited personally from the conflict of interest but found he had shown a lack of judgment clearly in breach of AT's declaration of interest policy that led to his dismissal in November 2015.
AT's statement said that since the investigation it has strengthened its process around conflicts of interest with an online system and set up a whistleblower line for staff and the public to raise any concerns about AT staff.
It also said AT has developed a comprehensive declaration of interest policy, which explains a conflict of interest arises when the personal interests of an employee conflicts with their work responsibilities.
Asked if AT should have released more details about the case earlier in the interests of transparency and accountability, a spokesman released a timeline showing it responded promptly to information sought by the Ombudsman and the delays.
The spokesman said the Ombudsman found AT had legitimately withheld certain information and "any suggestion that AT has been deliberately obstructive or less than transparent is demonstrably incorrect".
Erle and Donna Bencich have consistently refused to comment on the case, saying two years ago the matter was private and confidential. They did not respond to a further request for comment.
makes AT aware of allegations against Erle Bencich
February 2016: AT issues brief statement, saying there is not evidence of illegal activity but the individual showed lack of judgment, had not followed conflict of interest policy that resulted in his employment ending in November 2015.
March 2016: Herald requests copy of AT investigation under the Local Government Official Information and Meetings Act.
May 2018: Ombudsman rules that AT was entitled to refuse the Herald's request for the investigation documents for privacy reasons, but it should release an "expanded statement" to meet the countervailing public interest.