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ICAC finds corrupt conduct against former Housing officer

Wednesday 2 June 2010

The Independent Commission Against Corruption (ICAC) has found that former Housing NSW officer Frank Garzaniti engaged in corrupt conduct by failing to declare conflicts of interest involving contracts worth up to $5.3 million for Housing NSW work carried out by companies in which he and his friend and business associate, Frank Santomingo, had interests.

In its report on an Investigation into a Housing NSW officer's failure to declare conflicts of interest and secondary employment, released today, the Commission has also recommended that the advice of the Director of Public Prosecutions be sought with respect to the prosecution of Mr Garzaniti for the common law offence of misconduct in public office.

The ICAC's investigation into this matter commenced in November 2007, after the Commission received a report from Housing NSW concerning Mr Garzaniti's failure to disclose his conflicts of interest.

The report notes that Mr Santomingo's company, Greenfield Development Pty Ltd, obtained a casual lawns and grounds maintenance contract with Housing NSW in 2001, which was continually renewed until 2007 without going to tender or through any other competitive process. This contract was eventually worth about $2.7 million, although during the period relevant to the Commission's investigation, there was a Housing NSW requirement that contracts valued at $30,000 or more had to undergo a formal tender process or a select tender (the latter involving Housing NSW nominating contractors to submit tenders).

At the time, Mr Garzaniti was the Acting Team Leader at the Housing NSW Macquarie Fields office, where part of his duties included processing or verifying work done by Greenfield, resulting in payments being made to that company, and also recommending contract renewals. He did so without declaring any conflict of interest.

The report found that Mr Garzaniti also deliberately failed to declare a conflict of interest to Housing NSW and failed to seek approval from his employer for secondary employment arising from his interest in G&F Plant Hire, a company of which he was a joint director with Mr Santomingo. When Mr Santomingo resigned in 2007, Mr Garzaniti became the sole director. G&F subcontracted to Housing NSW's head contractor, Crossley Mclean & Associates Pty Ltd, to perform demolition and tree lopping work for the agency worth more than $2.6 million over a number of years.

The Commission found that Mr Garzaniti deliberately failed to declare his conflicts of interest or seek approval for secondary employment in order to conceal his involvement in Housing NSW work. He thereby continued to benefit financially from that work. Mr Garzaniti resigned from Housing NSW in February 2008. Accordingly, no recommendation is made in respect of any disciplinary proceedings against him.

The report also discusses the corruption prevention issues and reforms implemented in recent years by Housing NSW to more effectively manage corruption risks associated with its procurement function, conflicts of interest and secondary employment. In view of these reforms, no corruption prevention recommendations are made to Housing NSW in relation to this investigation.

The Commission held a public inquiry as part of this investigation over two days in March 2010, at which Assistant Commissioner Theresa Hamilton presided and four witnesses gave evidence.

Investigation Report   Fact Sheet