Votes on water fees broke law

BY PAUL GORMAN

Bitter leadership rivalries have reignited after a landmark ruling that four Environment Canterbury (ECan) councillors with conflicts of interest have broken the law.

Auditor-General Lyn Provost said Pat Harrow, Angus McKay, Bronwen Murray and Mark Oldfield illegally debated and voted against proposed water charges in June because they held water consents.

Provost, with agreement from the Crown Law Office, has decided not to prosecute them, saying the move would not be in the public interest and that convictions would be unlikely.

She said the four councillors were still at risk from conflicts of interest. Further breaches of the law might be viewed differently.

"We have concluded that the four councillors have breached ... by participating in a decision when they had a financial interest in it. However, we have decided that a prosecution would be unlikely to result in a conviction."

Provost said former ECan chairman Sir Kerry Burke had not provided the councillors with a "full copy" of November 2008 advice.

"Nor did he advise the three councillors [Harrow, Murray and Oldfield] at the time about the option of seeking a declaration from the auditor-general to enable them to participate," she said. "Sir Kerry told us that councillors were aware of the declaration option."

New chairman Alec Neill slammed Burke for the omission.

"Why did he not disclose the full information?" he said. "That is fundamental to it. The ability to make an application for a declaration of exemption was not put out to them."

Burke said the councillors "had been advised about that option", but he believed they were "not conflicted".

He said the council's "leadership coup" in September was about water, with Oldfield and Murray moving and seconding the motion to put the chairmanship on the agenda after the conflict of interest issue had been referred to Provost.

"All four councillors then voted to remove me as chairman," Burke said. "The fact that the four were all Alec Neill's supporters seriously tarnishes the leadership's credibility.

"A blind man can see what went on. It was an exercise in raw and rotten politics, now exposed to the full public gaze."

The Auditor-General's Office wrote to Oldfield, Murray and Harrow, and later McKay, after a complaint from Christchurch Central Labour MP Brendon Burns in July.

Burns, the party's water spokesman, asked the office to investigate whether regional councillors with water consents and irrigation interests should have been able to vote on water management part-charges.

ECan's general rates rose 10.6 per cent rather than 2.7 per cent for the current year because the council, with the support of the four councillors, delayed the introduction of water charges for a year.

Burns said the auditor-general had "chosen to bark but not bite".

Oldfield accepted the findings. "It needs to be sorted for future participation, otherwise there's a disenfranchisement of anyone outside Christchurch City."

McKay said he was keen to work with the auditor-general on Canterbury water issues.

Murray and Harrow could not be reached for comment.

Neill said the "fair and balanced" findings were "a lesson" for ECan. "It indicates they accept water is a complex issue and it is important that councillors are able to fully engage, and to that end that where there is a conflict or potential conflict, that you apply to the auditor-general for an exemption."

ECan is applying for such an exemption, in which the auditor-general has to weigh up the benefits of councillor involvement against the risk their financial interests may unduly influence the outcome.

Burke said he felt "a moderate sense of justification" after reading the decision.

"Both my advice and the guidance of the Office of the Auditor-General was that they shouldn't take part, but they did," he said.

"Regrettably, the colleagues seemed to see good-faith advice as a challenge to be fought rather than followed. Now their reputations will be permanently damaged."

Provost said reasons for not prosecuting included:

The councillors all relied on legal advice that they could take part.

They co-operated with the investigation.

There was no history of breaches or warnings.

The potential financial benefit was unlikely to be "particularly significant".

- © Fairfax NZ News