Mayor Karen Williams has urged the State Government to rush through laws to stamp out council/developer corruption, in line with Crime and Corruption Commission (CCC) recommendations.
But hasn’t she exploited the very loopholes and back doors the CCC is trying to close with its recommendations set out in the Operation Belcarra Report?
Her donations register lists gifts from entities whose names disclose nothing about who is behind them.
She has used the defence of ignorance about her benefactors, when asked why she voted in favour of their interests.
Her behaviour in the case of the Bay Street Group, a company linked to the McKenzie Aged Care Group, encompasses much that the CCC’s recommendations are designed to stop.
Mayor Karen Williams’ mysterious gift
Back in July 2016 Redlands2030 reported on Mayor Williams’ mysterious gift.
A few months after being elected Mayor in 2012, Karen Williams declared a $5,000 gift from an entity described as Bay Street Group Pty Ltd. Her register of interests said the gift was received on 22 August 2012 but the donor’s address was not disclosed.
After her re-election in 2016, the Mayor’s’ post election disclosure dated 27 June 2016 included the donor’s address. This made it possible to understand that the donor was related to McKenzie Aged Care Group, developer of two major accommodation projects in the Redlands.
One of these projects was approved at a Council meeting on 12 February 2014. The Mayor did not declare any interest in the matter. She stayed in the room, chaired the meeting and voted.
Redlands2030 was told by Karen Williams in July 2016 that she was unaware of any relationship between Bay Street Group of 1/240 Bay Street, Brighton in Victoria and McKenzie Aged Care Group of the same address. The two companies had common directors.
The Mayor never responded to our followup question:
If you have not been aware of any relationship between the two entities, can you advise what you understood at the time this gift was given and received about the nature of “Bay Street Group” and why you thought this Victorian entity chose to give you $5,000?
The Local Government Department eventually referred this matter as a complaint about misconduct to a Regional Conduct Panel which determined that the complaint was “not sustained”.
Normally, there’s minimal transparency about the handling of complaints about councillors. The community does not get to find out who were the panel members, what they considered and the reasons for their decisions.
In this case, Minister for Local Government Mark Furner has advised Redlands2030 that the panel determined, on the balance of probabilities, that there was not sufficient evidence to show that Mayor Williams had knowledge of the connection between Bay Street Group and McKenzie Aged Care Group before the Council meeting which considered the development application.
Is it OK to not know where the money comes from?
Council’s Annual Report 2012/13 said this about the background of Mayor Karen Williams:
Before joining Council, Karen worked for 10 years in the domestic money market both in Sydney and Brisbane and also owned and operated two successful retail floral studios in Brisbane. Karen has been involved in a large number of community organisations. She is a graduate of and holds a Diploma with the Australian Institute of Company Directors.
It’s an official life story suggesting that Karen Williams is commercially astute, especially when it comes to dealing with money.
That a newly elected commercially astute mayor would accept a significant political donation, seemingly without investigating the donor to understand its interests, is difficult to believe.
Even if the strict letter of the law at the time didn’t require her to make inquiries, community expectations (the pub test) may not be satisfied by the defence of “I didn’t know”.
Back to the future
What if we could travel back in time to 2012 and see if things might have happened differently with more rigorous laws?
The Government recently implemented clearer and more timely requirements for disclosure of donations. Laws are also being considered to ban donations by property developers and clarify how councillors deal with conflicts of interest.
Disclosure of donations
If current laws requiring on-line disclosure of donations were in place back in 2012, Mayor Williams would have had to disclose the gift from Bay Street Group within seven days of receiving it. Disclosed details would have included the donor’s address.
This may have raised questions in the minds of other councillors, or members of the community, along the lines of who is this entity? And why have they given her money?
The CCC has recommended that for a company, gift disclosure must include the names and residential or business addresses of the company’s directors (or the directors of the controlling entity), and a description of the nature of the company’s business.
If all of these details about Bay Street Group had been disclosed when the gift was received, then by the end of August 2012 it should have been possible for anyone interested to understand that a relationship existed between Bay Street Group and McKenzie Aged Care Group.
Banning donations by property developers
The Palaszczuk government has said it will move to ban political donations by property developers in line with a CCC recommendation. But would McKenzie Aged Care Group be classified as a property developer?
Queensland is set to base its laws on NSW laws which use the following definition:
A ‘property developer’ is a corporation engaged in a business that regularly involves the making of relevant planning applications by or on behalf of the corporation in connection with the residential or commercial development of land, with the ultimate purpose of the sale or lease of the land for profit.
So a company such as McKenzie Aged Care Group, which puts in planning applications for aged care residential complexes which it continues to own and operate may not be classified as a property developer, if the NSW laws are copied.
Conflicts of interest
The CCC has made recommendations to improve the way conflicts of interest are dealt with.
Changes to the Planning Act would require any development application to:
include a statement as to whether or not the applicant or any entity directly or indirectly related to the applicant has previously made a declarable gift or incurred other declarable electoral expenditure relevant to an election for the local government that has an interest in the application.
This would require the developer to clarify what donations it may have made to any councillor. In the case of McKenzie Aged Care Group, it would have to declare any donations made by a related entity such as Bay Street Group.
While this seems to be a useful way of achieving transparency, to be effective the penalty for non-compliance would need to be substantial.
Other CCC recommendations would clarify the rules for declaring a conflict of interest. It would become an offence for a conflicted councillor to influence or attempt to influence any decision by another councillor or a council employee after a matter appears on an agenda for a council meeting.
Prior to formal consideration of matters at public meetings, Redland City councillors routinely discuss development applications at non public ‘workshops’ and other non public meetings of councillors which would not be covered by the CCC’s recommendations. The offence should be written more broadly, to preclude any conflicted councillor from having anything to do with a matter involving a donor.
If the CCC’s proposed laws were in force back in 2014, it’s likely that the Mayor would have had to declare a conflict of interest and leave the room while the application was discussed and voted on at the public general meeting on 12 February 2014.
But this would only have happened if links between Bay Street Group and McKenzie Aged Care were understood widely, because of stronger disclosure laws.
Back to the present
Returning to the present, Mayor Karen Williams is reported to have said this week that the State Government had to move quickly to implement Operation Belcarra’s recommendations to tighten up local government donating and voting rules as a priority, to ensure public confidence was retained in local government.
With CCC boss Alan MacSporren referring to local government as a “hotbed of perceived corruption”, what is more likely to restore public confidence?
Tighter rules? Or politicians not accepting questionable donations?