IBAC investigations uncover significant corruption risks in council procurement

Victoria’s anti-corruption commission IBAC has tabled a special report to Parliament flagging “significant corruption risks” in council procurement.

The report highlighted a range of procurement-related corruption risks and vulnerabilities that were found in two councils.

IBAC Commissioner Robert Redlich said that they are likely to be faced by most, if not all councils, in Victoria.

“Allegations of corruption associated with council procurement practices and processes are a recurring theme in the complaints received and investigated by IBAC,” Redlich said.

“There is an opportunity now for all Victorian councils to consider these findings and assess how robust their own processes and controls are.”

This special report focused on two IBAC investigations, Operations Dorset and Royston, which concerned allegations that council employees subverted procurement processes for their own benefit and the benefit of associates.

In Operation Dorset, IBAC concluded a former project manager at the Darebin City Council had assisted an associate’s company to win more than $16 million in contracts. These contracts were awarded in circumstances where the project manager was receiving cash, gifts and other benefits from the company.

In a private examination before IBAC, the project manager admitted receiving cash payments from one of the two companies involved, stating ‘Well, I was receiving … if you call it kickbacks for ongoing works for the City of Darebin, yes’, read the report.

It was also alleged the project manager used his position to access information to help a former colleague who was the director of the other company involved win contracts with the council by submitting bids that were often around $1,000 under the next lowest tender bid. In private examinations, both the project manager and the director denied accessing or using information to benefit the business.