IBAC Insights (newsletter)

By IBAC Deputy Commissioner David Wolf

Victoria’s local government sector is large, diverse and incredibly important for its respective communities. While working towards similar goals, each council faces different challenges and has varying levels of resources and capacity to meet community needs.

Given the resources and responsibilities entrusted to councils, it is important they develop, implement and maintain robust integrity frameworks and continuously improve their capacity to identify and prevent corrupt conduct. This is particularly important ahead of the upcoming October local council elections, where almost all communities across Victoria will vote for their new councillors to serve a four-year term.

IBAC’s role in preventing corruption

One of IBAC’s crucial roles is to ensure public sector agencies have the information and resources to build their corruption resistance.

We have recently held several regional forums for local government councillors and staff ahead of the October elections. Enhancing know-how about corruption risks in local government is critical to achieving fair and effective administration outcomes for local communities and a key priority for IBAC.

We know that in local government, corruption comes at a cost, it diminishes trust in councils, and jeopardises the delivery of valuable programs and services. Unfortunately, councils experiencing failures in governance in recent years are not uncommon. When these failures lead to the council being investigated, monitored or even dismissed, the community wears the cost and disruption to effective community representation.

Common corruption risks we see across local government include misuse of position, conflicts of interest, improper use of public resources, cronyism or nepotism in recruitment practices, improper action in licensing and regulation, as well as procurement favouritism or fraud (which remains one of the top risk areas).

One of our key roles in preventing corruption is to receive complaints and information about corrupt or improper conduct and then identify, investigate and expose that conduct.

We rely on a broad range of sources for complaints and information including community members, employees in the Victorian local government, government contractors and referrals from other integrity agencies. This information is essential to our work and even where we might not investigate a particular matter, the complaint or information helps us identify where integrity risks may arise.

Operation Sandon

One of the most significant IBAC investigations into local government is Operation Sandon, with our special report tabled in Parliament in July 2023. Operation Sandon was an investigation into allegations of corrupt conduct involving councillors and property developers in the City of Casey.

Operation Sandon exposed how the manipulation of council governance processes, donations, and lobbying improperly influenced council decisions. It also exposed how such practices risked improperly influencing decisions at the state government level. The investigation found that a developer and planning consultant improperly sought to influence Casey councillors to facilitate favourable council decisions for over a decade. This conduct flourished in an environment where poor councillor conduct repeatedly went unchecked, council decisions were manipulated, and the acceptance of donations without any declaration had become normalised.

Significant issues were identified where councillors either deliberately failed to declare and manage conflicts of interest or used the declaration process to manipulate outcomes. We also found many instances of impropriety in how councillors sought to influence, bypass or belittle council staff.

A key observation of this investigation was the reluctance of other councillors or staff to speak up and report the conduct and when matters were reported, the response was often quite inadequate. This only emboldened ill-intentioned councillors and silenced their critics.

Mitigating corruption risks

When understanding how corruption risks can be mitigated in local government, there are some key lessons from Operation Sandon.

1. An organisational culture of integrity that genuinely supports and encourages people to speak up is vitally important in exposing and ultimately preventing public sector corruption.
2. There needs to be a well-communicated process for employees and councillors on how to report corruption or misconduct.
3. Local councils must build confidence in reporting wrongdoing, ensuring staff feel safe and are encouraged to speak up.
4. It’s important to raise staff and councillor awareness of policies and procedures. This is your first defence against potential corruption but needs to be fit for purpose. Ensure policies are up to date, endorsed and well communicated in the organisation.
5. Effective leadership is key. It is essential that councillors and the executive lead by example and model appropriate behaviours for all.

While corruption prevention is a core function of IBAC, everyone has a role to ensure councillors and councils are working in the best interests of the entire municipality. It is important that the community are engaged and consider deeply the merits of candidates who are nominating for office. It is important to keep an eye on the campaign activities to ensure council resources (public) or information are not misused, and candidates conduct themselves in accordance with the values you would want of your council. A reminder, everyone’s vote is a powerful anti-corruption tool in itself.

How to report

As I mentioned earlier, reporting suspected corruption or improper conduct underpins the effectiveness of the prevention activities. Anyone can make a complaint to IBAC. If you would like to make a complaint about suspected corruption and misconduct in the public sector and Victoria Police, visit ibac.vic.gov.au/report. You can choose to remain anonymous.

For more information about which integrity agency you should complain to about issues and suspected wrongdoing with council matters, councillors, and local government officials in Victoria, visit ibac.vic.gov.au/councilcomplaints.