Burwood Council – allegations of corrupt conduct involving the General Manager and other staff (Operation Magnus)

Year: 2011 Status: Completed

The ICAC conducted an investigation into whether Pasquale (Pat) Romano, the former General Manager of Burwood Council, and other Council officers, engaged in corrupt conduct in the course of their administration of staff and use of resources at the Council.

In its report on this investigation, which was made public on 20 April 2011, the ICAC made findings of corrupt conduct against Mr Romano.

The ICAC has stated its opinion that the advice of the Director of Public Prosecutions be sought with respect to the prosecution of Mr Romano for various offences.

The Commission has also made 31 corruption prevention recommendations. Some of the recommendations are made to Burwood Council, while others are made to the NSW Government to help improve systems in local government across the state.


Findings of corrupt conduct

The ICAC has made 17 corrupt conduct findings against the former General Manager of Burwood Council, Pasquale (Pat) Romano. The corrupt conduct in which Mr Romano engaged included:

  • using his position at the Council to engage IPP Consulting Pty Ltd for personal purposes to conduct surveillance on a work colleague of his wife, and knowingly causing the invoices for the work, which amounted to over $35,000, to be paid by the Council
  • using IPP Consulting to conduct surveillance on candidates for the 2008 council elections, although he knew this fell outside the proper performance of his functions as the General Manager, and knowingly causing the $15,485 invoice for this work to be paid by the Council
  • failing to manage appropriately his conflict of interest in the recruitment to Council of his friend, Albert Becerra, and in the payment of $41,400 to Mr Becerra above his contracted remuneration
  • procuring work on units in which he had a personal interest from Council officers during Council time
  • taking adverse managerial action against four Council whistleblowers.

Recommendations for prosecutions

The Commission must seek the advice of the Director of Public Prosecutions (DPP) on whether any prosecution should be commenced. The DPP determines whether any criminal charges can be laid, and conducts all prosecutions. The Commission provides information on this website in relation to the status of prosecution recommendations and outcomes as advised by the DPP. The progress of matters is generally within the hands of the DPP. Accordingly, the Commission does not directly notify persons affected of advice received from the DPP or the progress of their matters generally.

The Commission formed the opinion that consideration should be given to obtaining the advice of the DPP with respect to the prosecution of Mr Romano as follows:

  • four offences of giving false or misleading documents to the Council with intent to defraud the Council, contrary to section 249C of the Crimes Act 1900
  • four common law offences of misconduct in public office
  • one offence of obtaining financial advantage by false or misleading statements, contrary to section 178BB of the Crimes Act
  • two offences of causing detrimental action to be taken against a person who made protected disclosures, contrary to the Protected Disclosures Act 1994 (now named the Public Interest Disclosures Act 1994)
  • three offences of causing or procuring disadvantage to persons for or on account of those persons assisting the ICAC, contrary to section 93 of the Independent Commission Against Corruption Act 1988
  • two offences of providing false or misleading evidence to the Commission contrary to section 87 of the ICAC Act.

This opinion was detailed in the Commission's report on this investigation.

On 16 March 2011 and 14 April 2011, the DPP advised that proceedings be commenced as canvassed in the Commission's opinion except that it advised the Commission not to proceed with offences pursuant to section 20 of the Protected Disclosures Act 1994. This advice was accepted by the ICAC.

On 16 May 2014, Mr Romano pleaded guilty to 3 counts of misconduct in public office, 3 counts of give false or misleading evidence pursuant to section 87(1) of the ICAC Act, and 1 count of fraudulent appropriation pursuant to section 124 of the Crimes Act.

The Court was asked to take into account matters contained on a Form 1. This contained 6 counts of obtain financial advantage by deception pursuant to section 187BA of the Crimes Act, and 3 counts of give false or misleading evidence pursuant to section 87(1) of the ICAC Act.

On 7 November 2014, His Honour Justice Arnott SC sentenced Mr Romano to imprisonment for an aggregate term of 2 years and 6 months, with a non-parole period of 20 months.

Mr Romano lodged a notice of intention to appeal. The time for appeal has lapsed.

Recommendations for disciplinary action

As Mr Romano's contract as General Manager has been terminated, the issue of taking disciplinary action against him does not arise.

Recommendations for corruption prevention

The ICAC has made the following 31 corruption prevention recommendations; some of these recommendations are to Burwood Council, while others are made to the NSW Government to help improve systems in local government across the state:

Recommendation 1

That Burwood Council develops a policy for the payment of appropriate out-of-pocket expenses incurred by the General Manager and Council employees. Such a policy should incorporate the provisions of the NSW Government Expenses Policy. 

Recommendation 2

That Burwood Council's out-of-pocket expenses policy for staff and the General Manager includes protocols for the approval of out-of-pocket expenditure. The protocols should explicitly prohibit the General Manager or any other Council employee from approving expenses where there is an actual or perceived personal benefit derived from the expenditure. The protocol should also provide that the Mayor must approve the expense claims of the General Manager. 

Recommendation 3

That Burwood Council modifies its Councillor Expenses and Facilities Policy to require the payment of expenses and the provision of facilities to Councillors only where specifically provided for in the Policy. 

Recommendation 4

That Burwood Council modifies the Councillor Expenses and Facilities Policy to require the approval of significant Councillor expenses and facilities, where possible, at a full Council meeting. Where approval at a full Council meeting is not possible or appropriate then approval should be given jointly by the Mayor and the General Manager. If the Mayor requires approval, it should be given jointly by the Deputy Mayor or another Councillor and the General Manager.

Recommendation 5

That Burwood Council aligns its Motor Vehicle Management Policy to reflect key areas of NSW state government policy and practice, including preference for leasing, cars not exceeding the luxury car tax threshold, procedures for disposal and appropriate treatment of optional accessories.

Recommendation 6

That contracts and remuneration packages for the General Manager and senior staff at Burwood Council comply with the Council's Motor Vehicle Management Policy.

Recommendation 7

That the NSW Division of Local Government be given the authority through legislative amendment to require councils in NSW to adopt policy and practice considered to be of state-wide significance by the Division's Chief Executive. This amendment should include an appeal mechanism to the Chief Executive for councils seeking specific dispensation.

Recommendation 8

That non-compliance with the requirement for adoption of policy (as described in recommendation 7) be dealt with as a discipline issue for relevant council administrative officers under the Model Code of Conduct for Local Councils in NSW.

Recommendation 9

That the NSW Division of Local Government reviews all circulars and pronouncements by the Department of Premier and Cabinet for issues of relevance to NSW local councils and issues guidelines to councils accordingly.

Recommendation 10

That the NSW Minister for Local Government seeks legislative amendment to the Local Government Act 1993 to establish internal audit for local authorities as a statutory function.

Recommendation 11

That Burwood Council establishes an internal audit function with an independent internal audit committee as a matter of priority. This committee should be chaired by a person independent of the Council.

Recommendation 12

That the elected body of Burwood Council receives regular updates on the outcome of internal audits.

Recommendation 13

That the NSW Minister for Local Government seeks legislative amendments to the Local Government Act 1993 to require general managers to report to the elected council a decision to dismiss an internal auditor and the reasons for the decision.

Recommendation 14

That the NSW Minister for Local Government seeks legislative amendments to the Local Government Act 1993 to provide internal auditors unfettered access to all documents and any council staff they deem necessary for the conduct of their role.

Recommendation 15

That the NSW Minister for Local Government amends Part 9.2(d) of the Model Code of Conduct for Local Councils in NSW to allow councillors to provide information to an internal auditor on any matter related to council business.

Recommendation 16

That the NSW Minister for Local Government seeks legislative amendment of section 376(2) of the Local Government Act 1993 to remove the automatic entitlement of a general manager to attend an audit committee meeting.

Recommendation 17

That Burwood Council's internal audit function monitors compliance with the Councillor Expenses and Facilities Policy as part of its oversight role.

Recommendation 18

That Burwood Council's internal audit function monitors compliance with Council's (foreshadowed) policy for the payment of out-of-pocket expenses to the General Manager and staff.

Recommendation 19

That Burwood Council's internal audit function monitors compliance with Council's system for allocating work to legal practitioners.

Recommendation 20

That Burwood Council's internal audit function conducts audits of the authorisation, certification and approval processes for expenditure that is unusual by its nature or its infrequency.

Recommendation 21

That Burwood Council amends its Code of Conduct and the Employee's Handbook to clearly prescribe that all complaints concerning the General Manager be referred to the Mayor in the first instance. If the Mayor is also implicated, the complaint should be referred to the NSW Division of Local Government.

Recommendation 22

That Burwood Council policies be amended to prohibit the General Manager from having any involvement or giving directions to staff in relation to any formal or informal complaints where he/she is the subject of the complaint. This recommendation does not prohibit the General Manager from providing information or a statement as part of the investigation process.

Recommendation 23

That Burwood Council amends its Internal Reporting System to include an officer's line manager/supervisor as a designated officer to whom a protected disclosure can be made. All officers to whom a protected disclosure can be made under the policy should receive training on how they should deal with a protected disclosure.

Recommendation 24

That Burwood Council ensures that the handling and investigation of complaints about the General Manager are overseen by the Mayor and conducted by investigators who are independent of the Council.

Recommendation 25

That Burwood Council develops a suspension policy for all Council staff aligned to the intention and effect of Premier and Cabinet guidelines for the NSW public sector, as espoused in Premier's Memorandum 94/35.

Recommendation 26

That the Chief Executive of the NSW Division of Local Government amends the Standard contract for the employment of general managers to include specific provision for a council to suspend the general manager from duty on a reasonable apprehension that he/she has engaged in corrupt conduct or serious misconduct.

Recommendation 27

That Part 3 of the Model Code of Conduct for Local Councils in NSW be amended to improve the guidance provided to mayors in managing complaints against a general manager. In particular, guidance should be provided about the consideration of the suspension of the general manager in appropriate cases. A duty should also be placed on the mayor to monitor decisions and actions of the general manager and other council officers for possible detrimental action against staff or contractors who have provided information about alleged misconduct.

Recommendation 28

That the NSW Division of Local Government endorses a core package of information for trainers to deliver to councillors. The package should be tailored to the needs of new and existing councillors.

Recommendation 29

That all NSW councillors undertake a foundation education and training program endorsed by the NSW Division of Local Government, at a minimum of once per term.

Recommendation 30

That all current Burwood Council Councillors undertake a foundation education and training program endorsed by the NSW Division of Local Government as a matter of priority.

Recommendation 31

That the NSW Division of Local Government promotes its capacity to provide information and assistance to councillors in the discharge of their role.

Implementation Plans

The implementation plans posted below have been provided by Burwood Council and the NSW Division of Local Government in response to the ICAC's corruption prevention recommendations. Their appearance here is for information only and does not constitute the approval or endorsement of the plan by the Commission.

Burwood Council - Implementation plan

NSW Division of Local Government - Implementation plan

 

12 month progress report

The progress report posted below has been provided by NSW Division of Local Government in response to the ICAC's corruption prevention recommendations. Its appearance here is for information only and does not constitute the approval or endorsement of the report by the Commission.

NSW Division of Local Government - Progress report


24 month final progress report

The final progress report posted below has been provided by the Office of Local Government in response to the ICAC's corruption prevention recommendations. Its appearance here is for information only and does not constitute the approval or endorsement of the report by the Commission.

Office of Local Government - Final progress report


Media Releases Witness

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. 

Download the Witness List (PDF)

Transcripts

View all transcripts associated with this investigation. The Commission makes every effort to post the daily transcripts of its public inquiries on its website by 8:00 pm each day when possible. If the Commission sits later than 4:00 pm, the daily transcripts, particularly the afternoon session, may not be available until the next working day.

 

Filename File Size KB Date pp. Time
22-03-2010_Operation_Magnus_transcript_pp._00001-00040_from_10.00am_to_1.01pm.pdf 118 22/03/10 00001-00040 10.00am_to_1.01pm
22-03-2010_Operation_Magnus_transcript_pp._00041-00083_from_2.00pm_to_4.00pm.pdf 121 22/03/10 00041-00083 2.00pm_to_4.00pm
23-03-2010_Operation_Magnus_transcript_pp._00084-00140_from_10.05am_to_1.00pm.pdf 156 23/03/10 00084-00140 10.05am_to_1.00pm
23-03-2010_Operation_Magnus_transcript_pp._00141-00182_from_2.05pm_to_3.59pm.pdf 118 23/03/10 00141-00182 2.05pm_to_3.59pm
24-03-2010_Operation_Magnus_transcript_pp._00183_-_00235_from_10.10am_to_1.03pm.pdf 138 24/03/10 00183_-_00235 10.10am_to_1.03pm
24-03-2010_Operation_Magnus_transcript_pp._00236-00277_from_2.10pm_to_4.03pm.pdf 122 24/03/10 00236-00277 2.10pm_to_4.03pm
25-03-2010_Operation_Magnus_transcript_pp._00278-00323_from_10.20am_to_1.03pm.pdf 131 25/03/10 00278-00323 10.20am_to_1.03pm
25-03-2010_Operation_Magnus_transcript_pp._00324-00378_from_2.05pm_to_4.26pm.pdf 149 25/03/10 00324-00378 2.05pm_to_4.26pm
26-03-2010_Operation_Magnus_transcript_pp._00379-00434_from_10.05am_to_1.00pm.pdf 148 26/03/10 00379-00434 10.05am_to_1.00pm
26-03-2010_Operation_Magnus_transcript_pp._00435-00480_from_2.05pm_to_4.02pm.pdf 124 26/03/10 00435-00480 2.05pm_to_4.02pm
29-03-2010_Operation_Magnus_transcript_pp._00481-00550_from_10.15am_to_1.00pm.pdf 165 29/03/10 00481-00550 10.15am_to_1.00pm
29-03-2010_Operation_Magnus_transcript_pp._00551-00604_from_2.05pm_to_4.01pm.pdf 132 29/03/10 00551-00604 2.05pm_to_4.01pm
30-03-2010_Operation_Magnus_transcript_pp._00605-00662_from_10.25am_to_1.59pm.pdf 142 30/03/10 00605-00662 10.25am_to_1.59pm
30-03-2010_Operation_Magnus_transcript_pp._00663-00720_from_2.10pm_to_4.07pm.pdf 137 30/03/10 00663-00720 2.10pm_to_4.07pm
30-03-2010_Operation_Magnus_transcript_pp._00721-00733_from_5.00pm_to_5.42pm.pdf 40 30/03/10 00721-00733 5.00pm_to_5.42pm
31-03-2010_Operation_Magnus_transcript_pp._00734-00788_from_10.10am_to_1.01pm.pdf 134 31/03/10 00734-00788 10.10am_to_1.01pm
31-03-2010_Operation_Magnus_transcript_pp._00789-00843_from_2.05pm_to_4.01pm.pdf 143 31/03/10 00789-00843 2.05pm_to_4.01pm
01-04-2010_Operation_Magnus_transcript_pp._00844-00896_from_10.20am_to_12.59pm.pdf 141 01/04/10 00844-00896 10.20am_to_12.59pm
01-04-2010_Operation_Magnus_transcript_pp._00897-00939_from_2.05Pm_to_4.03pm.pdf 125 01/04/10 00897-00939 2.05Pm_to_4.03pm
12-04-2010_Operation_Magnus_transcript_pp._00940-00984_from_10.10am_to_1.01pm.pdf 119 12/04/10 00940-00984 10.10am_to_1.01pm
12-04-2010_Operation_Magnus_transcript_pp._00985-01030_from_2.08pm_to_4.08pm.pdf 126 12/04/10 00985-01030 2.08pm_to_4.08pm
13-04-2010_Operation_Magnus_transcript_pp._01037-01085_from_10.15am_to_1.02pm.pdf 134 13/04/10 01037-01085 10.15am_to_1.02pm
13-04-2010_Operation_Magnus_transcript_pp._01086-01127_from_2.10pm_to_4.03pm.pdf 118 13/04/10 01086-01127 2.10pm_to_4.03pm
14-04-2010_Operation_Magnus_transcript_pp._01128-01195_from_9.50am_to_1.03pm.pdf 185 14/04/10 01128-01195 9.50am_to_1.03pm
14-04-2010_Operation_Magnus_transcript_pp._01196-01239_from_2.05pm_to_4.03pm.pdf 127 14/04/10 01196-01239 2.05pm_to_4.03pm
15-04-2010_Operation_Magnus_transcript_pp._01240-01298_from_9.35am_to_1.02pm.pdf 158 15/04/10 01240-01298 9.35am_to_1.02pm
15-04-2010_Operation_Magnus_transcript_pp._01299-01342_from_2.10pm_to_4.06pm.pdf 126 15/04/10 01299-01342 2.10pm_to_4.06pm
16-04-2010_Operation_Magnus_transcript_pp._01343-01412_from_9.30am_to_1.02pm.pdf 186 16/04/10 01343-01412 9.30am_to_1.02pm
16-04-2010_Operation_Magnus_transcript_pp._01413-01461_from_2.10pm_to_4.08pm.pdf 125 16/04/10 01413-01461 2.10pm_to_4.08pm
27-04-2010_Operation_Magnus_transcript_pp._01462-01615_from_10.04am_to_4.08pm.pdf 470 27/04/10 01462-01615 10.04am_to_4.08pm
29-04-2010_Operation_Magnus_transcript_pp._01616-01758_from_10.06am_to_4.07pm.pdf 243 29/04/10 01616-01758 10.06am_to_4.07pm
24-05-2010_Operation_Magnus_transcript_pp._01759-01805_from_10.10am_to_1.06pm.pdf 137 24/05/10 01759-01805 10.10am_to_1.06pm
24-05-2010_Operation_Magnus_transcript_pp._01806-01843_from_2.20pm_to_4.00pm.pdf 106 24/05/10 01806-01843 2.20pm_to_4.00pm
25-05-2010_Operation_Magnus_transcript_pp._01844-01898_from_10.15am_to_1.05pm.pdf 154 25/05/10 01844-01898 10.15am_to_1.05pm
25-05-2010_Operation_Magnus_transcript_pp._01899-01943_from_2.05pm_to_4.04pm.pdf 127 25/05/10 01899-01943 2.05pm_to_4.04pm
26-05-2010_Operation_Magnus_transcript_pp._01944-01996_from_10.05am_to_1.04pm.pdf 142 26/05/10 01944-01996 10.05am_to_1.04pm
26-05-2010_Operation_Magnus_transcript_pp._01997-02041_from_2.05pm_to_4.07pm.pdf 125 26/05/10 01997-02041 2.05pm_to_4.07pm
27-05-2010_Operation_Magnus_transcript_pp._02042-02103_from_10.05am_to_1.01pm.pdf 161 27/05/10 02042-02103 10.05am_to_1.01pm
27-05-2010_Operation_Magnus_transcript_pp._02104-02147_from_2.05pm_to4.07_pm.pdf 122 27/05/10 02104-02147 2.05pm_to4.07_pm
28-05-2010_Operation_Magnus_transcript_pp._02148-02199_from_10.05am_to_1.01pm.pdf 144 28/05/10 02148-02199 10.05am_to_1.01pm
28-05-2010_Operation_Magnus_transcript_pp._02200-02235_from_2.05pm_to4.11_pm.pdf 101 28/05/10 02200-02235 2.05pm_to4.11_pm
07-06-2010_Operation_Magnus_transcript_pp._02236-02288_from_10.07am_to_1.03pm.pdf 148 07/06/10 02236-02288 10.07am_to_1.03pm
07-06-2010_Operation_Magnus_transcript_pp._02289-02322_from_2.05pm_to_4.03pm.pdf 98 07/06/10 02289-02322 2.05pm_to_4.03pm
08-06-2010_Operation_Magnus_transcript_pp._02323-02376_from_10.05am_to1.02pm.pdf 150 08/06/10 02323-02376 10.05am_to1.02pm
08-06-2010_Operation_Magnus_transcript_pp._02377-02411_from_2.08pm_to_4.03pm.pdf 98 08/06/10 02377-02411 2.08pm_to_4.03pm
09-06-2010_Operation_Magnus_transcript_pp._02412-02462_from_10.30am_to_1.02pm.pdf 141 09/06/10 02412-02462 10.30am_to_1.02pm
09-06-2010_Operation_Magnus_transcript_pp._02463-02504_from_2.10pm_to_4.02pm.pdf 121 09/06/10 02463-02504 2.10pm_to_4.02pm
10-06-2010_Operation_Magnus_transcript_pp._02505-02563_from_10.05am_to_1.01pm.pdf 166 10/06/10 02505-02563 10.05am_to_1.01pm
10-06-2010_Operation_Magnus_transcript_pp._02564-02615_from_2.08pm_to_4.32pm.pdf 147 10/06/10 02564-02615 2.08pm_to_4.32pm
11-06-2010_Operation_Magnus_transcript_pp._02616-02647_from_10.05am_to_11.55am.pdf 105 11/06/10 02616-02647 10.05am_to_11.55am
11-06-2010_Operation_Magnus_transcript_pp._02648-02680_from_2.04pm_to_3.27pm.pdf 96 11/06/10 02648-02680 2.04pm_to_3.27pm
Exhibits Public notices