Chapter. 10

Council Corruption

Corrupt politicians make the other ten percent look bad.
– Henry Kissinger

Corruption in politics is not something people find surprising. Indeed, corruption is as old as political representation itself. When I took my place in parliament, I raised my concerns regarding corruption in local government in Queensland. This included concerns with the previous Newman Government’s amendments to the Local Government Act, which greatly increased the powers of local mayors, increasing the opportunity for corrupt conduct.

The Newman Government’s reforms granted the mayor responsibility of preparing the budget to present to the council and the power to direct the Chief Executive Officer (CEO) and senior executive employees of council.

I met with Jackie Trad, who was the Deputy Premier and the Minister for Local Government. I nominated some straightforward legislative amendments that would reduce corruption at a council and a state level. However, the newly elected Palaszczuk Government was more concerned with maintaining special relationships than considering such reforms. I am not suggesting illegality by Government MPs. However, in terms of public sector corruption, there was a distinct lack of appetite to ‘root it out’. I should not have been surprised.

Jason, Lyn and a Campaign Builds

Late in 2015 I was contacted by two people from the Atherton tablelands, a cattle farmer by the name of Jason Ward and a former consultant to the dairy industry, Lyn O’Connor. They contacted me in relation to their concerns about corruption in local government.

Lyn and Jason were very committed to this issue and flew to Brisbane several times to meet me in parliament, with documents they wanted me to table. With their contacts and Lyn’s administration skills they became a formidable investigations team.

When I started to table the documents they were providing to me it caused quite a stir and some embarrassment to Deputy Premier Trad. She contacted me several times in attempts to dissuade me from tabling allegations against local government figures. I would not yield. In one of our last phone calls, in an aggressive tirade Trad referred to me as a “disloyal cunt”. I later resigned from the ALP and led a campaign for an inquiry into Qld local government.

The campaign quickly gathered momentum, largely as a result of the work of Jason, Lyn, myself and others. After receiving media attention, we were inundated by calls from people throughout the state, all claiming to know of corrupt actions by their local council. Lyn and Jason had to separate the wheat from the chaff. Our campaign led to a number of detailed investigations by experienced journalists.

Our anti-corruption campaign gained support from many parts of the community. One that surprised me was the Environmental Defenders Office (EDO). The EDO wanted stronger law because they knew money could buy inappropriate development, whether that was unsustainable mining projects or inappropriate developments in urban areas.

In New South Wales, the Independent Commission Against Corruption (ICAC) was kicking goals with convictions. Here in Queensland, having the Crime and Corruption Commission (CCC) as our ICAC, was a bit like having a poodle as a watchdog. It made sense to me to simply increase the CCC powers, but others wanted to start from scratch, and many of our supporters started using the slogan, “Queensland ICAC Now!”

Intellectual Support

As the campaign grew, the last thing I wanted to be accused of was pushing ‘conspiracy theories’, so it was important I had strong academic support. To this end I met with Dr. Timothy Prenzler from the University of the Sunshine Coast, an international authority on corruption prevention.

Prenzler believed the number of unresolved allegations had reached a point where the only way to clear the air was through an Assessment of Reform in Post-Fitzgerald Queensland and new laws to fix the problem for the future. I could see some of the reforms that were needed, and a review or inquiry process would surely make such recommendations.

“Ordinary citizens with a genuine complaint, and government insiders with evidence of unethical conduct, feel they have nowhere to go,” Prenzler said. “Too many genuine complainants and professional stakeholders, including journalists, lawyers and academics believe the CCC has lost its way and is overly focused on organised crime at the cost of public sector misconduct. A big part of the problem concerns perceptions of undue influence and favouritism. For example, there is a widespread view that elected officials are too easily bought by campaign donations and other sources of influence.”

Dr. Tim Prenzler
Dr. Tim Prenzler

Professor Prenzler also stated, “the Corruption Commission has conducted public opinion research which consistently shows that 90 percent of Queenslanders want complaints against police, public servants and local government officials to be independently investigated, but by its own admission the Commission investigates less than two percent of complaints”.

Two other academics Professor Paul Frijters and Dr. Cameron Murray, emerged with a focus on corruption. They focused on the inefficiency and damage that corrupt behaviour has on the economy. Initially they investigated land rezoning by the Urban Land Development Authority. Land rezoned by this authority increased in value by hundreds of millions of dollars as a consequence of the rezoning — a very generous “grey gift” to the successful developers. They then published the book ‘Game of Mates’, exposing the corruption club, which I read from in Parliament:

A Game of Mates

Mr PYNE (Cairns—Ind) (3.15 pm): I would like to talk about the new book, “Game of Mates: How favours bleed the nation”, by economists Cameron Murray and Paul Frijters. It is the story of how Australia became one of the most unequal societies in the Western world while merely a generation ago it was one of the most equal. It is the story of how a group of mates have come to dominate our corporate and political sectors and have managed to rob us, the Australian majority, of half our wealth. To understand how the game of mates is played and to disrupt it, we must see Australia through the eyes of our villain, whom we call James. This book is about how the Jameses of this country play their game of mates. It is about how much their game costs us and it is about what we can do to stop them.

The villain, James, swings no sword. He instead swings his power in the halls of parliament, in the media and in the complex bureaucracies of government and large corporate enterprises. James now robs you of a hefty part of your superannuation. He dodges tax so you pay more. You pay higher interest rates on your mortgage, higher transport costs and higher medical costs, because James and his mates take a cut.

Economist and social scientist Mancur Olson described the process of social decay resulting from what we call the game of mates as ‘institutional sclerosis’. He observed that over time all institutions succumb to the power of special interest groups that impose great economic cost on the community as they reallocate wealth towards themselves.

If any country can rise up and fight the Jameses, it is ours. The authors hope that this book can help in this fight by providing alternatives. Just one alternative is to establish a public competitor to supply the products James sells to reduce his collusive power; set up a state superannuation fund, like other countries do, to compete with the private ones; or set up a state bank. James thrives on the lack of competition, so let us give him some. James will protest, as the authors personally discovered. He will play dirty. Journalists who wanted to report their research in the areas of property development and infrastructure projects had their jobs threatened. James will tell bald-faced lies. One favourite is that there is already intense competition between superannuation firms and banks.

When pushed, James will enact reforms but twist them again in his favour to ensure any change is superficial, or he may introduce more bureaucratic rules, for land rezoning for example – something only he knows how to navigate, while others do not. The authors argue that James’s gain impoverishes our media, as James’s opinion buys airtime.”

Ipswich Inc. and the Empire Strikes Back

In 2016 a fellow Member of Parliament handed me a document entitled “Ipswich Inc.”, which included allegations of corrupt acts committed by the Mayor of Ipswich Mr Paul Pisasale. Pisasale had been an extremely popular mayor during his 13-year reign, winning more than 83% of the vote at his election. Political leaders were all keen to have a good relationship with him, largely because of his success and popularity.

I had heard rumours about Mr Pisasale before and I had complete trust in the MP who handed me the document, so I agreed to table it in the parliament for her. I also thought it was evidence of what I had been saying all along.

The Member who handed me Ipswich Inc. remained in the ALP, so could do nothing with it. Pisasale was well connected, but that did not worry me. He was a crook. It was that simple.  The document accused the council of dodgy land deals, lavish council-funded parties and sexual harassment claims.

The response was ‘over the top’. All media outlets wanted to talk to me about Mayor Pisasale. Pisasale himself denied everything completely and I was slammed mercilessly by local government leaders.

Jim Lindsay the Ipswich City Council CEO slammed my tabling of a “dirt sheet”. He tabled a “right of reply” document in State Parliament (via Parliament’s Ethics Committee), saying my allegations gave rise to “false imputations”.

“The Council wishes to assure the House that at all times in the course of its business it has acted lawfully and in good faith and the majority of matters raised have either been investigated by Council, or via external agency for investigation and assessment,” Lindsay wrote.

News Corp reported, “Rob Pyne’s explosive dirt file on Paul Pisasale has been slammed from all angles.” Adding, “key players named in the documents have denied the allegations. One has labelled it “bullsh*t”, and Queensland police maintain allegations of leaking had been investigated and dismissed.”

President of the LGAQ Greg Hallam said my attacks against local governments were “completely unacceptable”. He said, “Mr Pyne’s allegations – always made under the cover of parliamentary privilege – are without foundation.” Hallam concluded, “There is a clear pattern to his behaviour, which is completely unacceptable and only serves to devalue the honest and hard-working efforts of the many hundreds of councillors, and many thousands of council staff, across Queensland.”

Acting in caretaker role, Ipswich Mayor Paul Tully was happy to put the boot in as well, calling my actions “disgraceful”. “This is a very low act from the coward’s castle of Parliament,” he said. “I think Mr Pyne should consider his position and probably resign.”

I did have evidence, I did not resign and I would not back off, especially since these mongrels were baying for my blood. They could go to hell.

I was not the only one feeling pain from the backlash. Corruption can have dire consequences. When there is a lot of money involved, people can lose tenders, go bankrupt or be targeted for physical attack.

In Ipswich one of our key allies was Jim Dodrill, the President of the Ipswich Ratepayers and Resident’s Association. The day after speaking at a media conference with us, Jim was violently bashed for his push to clean up corruption in Ipswich.

The Truth Emerges

The dam wall holding back a sewer of corrupt activity cracked on 6 June 2017 when Pisasale, mayor of Ipswich since 2004, gave a press conference wearing a dressing gown at the city’s St Andrew’s private hospital, to announce his resignation.

He said a flare-up of multiple sclerosis was the cause of his decision to resign. However, this media circus was prompted not by a decline in his health but the fact Pisasale’s office had been raided by the Crime and Corruption Commission. Australian federal police were also understood to have been involved in raids at several locations, including Pisasale’s home.

Paul Pisasale was charged with corruption for allegedly receiving bribes from a property developer. The hearing was told Pisasale received more than $220,000 in donations before last year’s election, but he denied the money had any influence on him. “People give to churches but they don’t expect divine intervention,” he said.

The CCC had announced it had laid six charges against the 65-year-old Pisasale including official corruption, fraud, perjury, misconduct in public office and drug possession. The CCC alleged the corruption charge related to corrupt payments made by a property developer to Pisasale.

Pisasale’s long time fellow Ipswich councillor and Deputy Mayor, Paul Tully, replaced him as acting mayor.

Whole of Government Action

As wider evidence of corruption surfaced there was a whole of government response. Criminal charges and prosecutions came from  the Judicial Branch. The new Local Government Minister took Executive action and, unable to continue to ignore the situation, the Legislature adopted significant law reform.

CCC Action

The CCC became busier than they had been for many years. In 2017 the agencycommenced Operation Belcarra to determine whether candidates committed offences under the Local Government Electoral Act 2011 that could constitute corrupt conduct.  They were looking for practices that gave rise to actual or perceived corruption, or otherwise undermine public confidence in the integrity of local government.

Between April and June the CCC conducted nine days of public hearings into corruption and integrity in local government. The CCC found widespread non-compliance with legislative obligations relating to local government elections and political donations. This non-compliance was largely caused by a deficient legislative and regulatory framework. It made 31 recommendations, including prohibiting candidates, associated entities and councillors from receiving gifts from property developers. It also recommended setting a limit on how much candidates and parties can spend during council election campaigns.

The CCC identified widespread non-compliance with the Local Government Electoral Act and deficiencies with how the Electoral Commission of Queensland operated, and recommended changes to broaden its role.

The CCC also stated that candidates, political parties and others should be banned from receiving gifts or loans for an election within seven business days before or after polling day.

CCC chair Alan MacSporran said Operation Belcarra and other recent investigations identified significant weaknesses in the current framework and that reform was needed to deliver transparency, integrity and better accountability in council elections and council decision-making.

“If supported by Parliament, the package of recommendations in my view will result in the most substantial reform of the local government sector in Queensland’s history,” MacSporran said.

Mr MacSporran said it became apparent that many of the issues it was investigating had been explored previously in recent decades, including issues of property developer donations and conflicts of interest. “The recurring nature of these issues, despite increased regulation and oversight of local government, elections and political donations over time, highlights their inherent potential to cause concerns about corruption and adversely affect public perceptions of, and confidence in, the transparency and integrity of local government,” he said.

Legislative Action

The Palaszczuk Government response was slow and ad hoc. However, several pieces of legislation were passed that would make it harder to commit some of the corrupt practices, while others were passed which made improper dealings corrupt in the legal sense.

I was happy when the Palaszczuk Government put legislation before the house proposing reforms to the CCC. However, at the second reading I moved the amendments to make it stronger, including making hearings public and including a more extensive list as to what constituted ‘corrupt conduct’ (as existed in New South Wales). I again invoked Dr. Prenzler when I addressed parliament as follows:

On 25 February 2016 I delivered this speech to the house:

Mr PYNE (Cairns) (6.44 pm): I was going to rise, as best I can, to speak about Small Business Week, but my heart is heavy. My heart is heavy reflecting on the state of local government in this fine state of Queensland.

During the break between the two sitting weeks I took the opportunity to travel to the University of the Sunshine Coast where I met with Professor Timothy Prenzler. Professor Prenzler is the head of the faculty of criminology and justice at the University of the Sunshine Coast. Professor Prenzler introduced me to the concept of grey corruption. It is a term I have not heard of before. Grey corruption is a term that describes actions that are immoral, unethical and may in some other states be illegal but are not in the state of Queensland.

Professor Prenzler spoke of the large amount of grey corruption in the state of Queensland and so I asked him what the answer was and he said quite simply to lift the bar—to lift the bar, and I was very pleased to hear the Attorney-General speak earlier today. He said that we have to lift the bar so that much of what is now categorised as grey corruption becomes official corruption. Certain ways we can raise the bar in this manner in this state include obviously legislative change.

One such way is to ban donations to political campaigns from property developers, as occurs in New South Wales. That is one very obvious way because it would prevent what I have seen happen on many occasions, and that is developers donating to council campaigns and then that elected council voting in favour of developments from that very donor without declaring a conflict of interest. I have seen that happen on a number of occasions.

Another way the bar could be lifted is by real-time donations. People are going to see very many political advertisements over the coming weeks and they are not going to know who paid for them. I think the people of Queensland have a right to know who paid for those ads. But the biggest reform that needs to be made is to remove the amendments made by Minister Crisafulli and the Newman government which enhanced—greatly enhanced—the powers of mayors throughout Queensland.

In the old days we had a respected position of town clerk or shire clerk. Elected councillors and mayors did not instruct and bully staff. That was not allowed. What I am calling for is Westminster principles in local governments so that mayors, sometimes in concert with CEOs, cannot bully staff to breach statutory guidelines for their own self-serving interests.

Ipswich Council

If Mr Tully felt the arrest of Paul Pisasale was the end of the matter for him and his colleagues, he would be bitterly disappointed. Queensland Crime and Corruption Commissions (CCC) investigations into the council saw 15 people, including two former mayors, charged with criminal offences.

In a bizarre turn of events Pisasale was sentenced to two years in jail for extortion, for an incident where he posed as a private investigator and demanded thousands of dollars from the ex-boyfriend of a Chinese escort he had been seeing

The new mayor Andrew Antonelli was found guilty of fraud, stemming from buying items at charity auctions — including a football jersey, several artworks and a bicycle — and charging them to the council’s community donation fund.

The former Ipswich City Council CEO Carl Wulff was sentenced to five years in prison after accepting bribes worth more than $240,000, being found guilty of two counts of official corruption and one count of attempting to pervert the course of justice.

In the end, the entire council was sacked by the Queensland Government, which replaced the Council with an Administrator.

Logan Council

In 2018, eight Logan City councillors, including suspended mayor Luke Smith, were charged with a number of criminal offences after an investigation by the CCC. They were arrested and formally charged with 14 criminal offences relating to their time in public office. The charges related to the sacking of former Logan CEO Sharon Kelsey in early 2018. Mr Smith was also charged with two counts of misconduct contrary to public office.

Ms Kelsey was dismissed after seven months in the job in February 2018, with councillors voting 7-5 to sack Ms Kelsey at the end of her six-month probationary period. She took her case to the Queensland Industrial Relations Commission, which handed down a historic ruling that Ms Kelsey had to be reinstated in May 2018, but the Logan councillors had then illegally blocked her return.

The end for the dysfunctional Logan City Council came when it was dismissed by Queensland’s Local Government Minister Stirling Hinchliffe.

Fraser Coast Council

For several years the Fraser Coast Council had been described as “dysfunctional” and as having a “toxic culture”. The Council was plagued by allegations of misconduct and corruption by many, including myself. In December 2017 the Crime and Corruption Commission charged Chris Loft with misconduct in relation to public office.

The issues culminated in the arrest of Loft while still in his role as mayor on charges of official misconduct and computer hacking at the end of 2017. Loft had his former campaign manager, Brian Jackson Downie appointed to a newly created chief-of-staff role. Downie had twice applied unsuccessfully for the role of chief of staff, before Loft inappropriately interfered.

Local Government Minister Stirling Hinchliffe exercised his power under the Local Government Act to recommend the Governor-in-Council dismiss Loft as mayor in February 2018 for “serial breaches” including inappropriate conduct or misconduct.

More Charges

On 19 Dec 2019 Moreton Bay Regional Council Mayor, Allan Sutherland, was charged by the CCC with two counts of misconduct in public office, following an investigation by Queensland’s corruption watchdog.

Doomadgee Mayor Edric Walden, Hope Vale Mayor Greg McLean and Ipswich Mayor Andrew Antoniolli (who had already stood aside) were suspended in May 2018.

Defamation Used to Silence Critics

A worrying trend that emerged around this time was the use of defamation law by some councils to silence their critics.

Being involved in politics means you get a lot of criticism, some fair and true, and some mean-spirited and fabricated. However, it is part of the cut and thrust of politics. When you are a politician or public figure, you are going to get this sort of feedback. Normally you just take it on the chin. So I was amazed when I heard that some local councils were taking the decision to sue their own constituents for defamation, using ratepayers funds.

Constituents were threatened with litigation in Redlands, Southern Downs and Gympie. In Ipswich and Innisfail, the local council went one step further and actually commenced legal proceeding in the District Court. The LGAQ through their solicitors King and Co. supported Council’s conduct saying “employers owe a duty to take reasonable care not to expose employees to unnecessary risk.” Apparently, this included suing critics.

Conclusion

I will never forget the way I was mocked and denigrated when I initially raised my allegations of local government corruption. I paid a heavy political price, but by 2018 I felt vindicated. There had been significant media coverage of numerous cases of corrupt behaviour, and CCC had conducted many investigations, a number of which were followed by criminal charges. While for some offenders the process was ongoing, some had lost their jobs while others were serving terms of imprisonment.

While I am sure all this had a deterrent effect in the short term, history tells us such enforcement does not provide a long-term fix. Similar offences are often committed within the next generation, because of greed and self-interest. Systemic reform does not take place unless legislation is changed.

The biggest long-term reforms won by our campaign were changes to a number of pieces of legislation, including laws governing local government, laws concerning the operation of the CCC and electoral laws. These reforms will have a real impact. The government should have gone further, but in politics whenever you manage to champion any reform, you see it as a big win and I had no doubt that the reforms were a response to all the work we had done to expose corruption.

Struggle & Resistance in the Far North

The Fight for the Underdog