Conflicts of interest are not inherently corrupt. The risk of corruption stems from the failure of individuals and their organisations to properly and actively identify, declare and manage a conflict in the public interest. Conflicts of interest become problematic when they are concealed, only partially revealed or mismanaged. Appropriate identification, declaration and management of a conflict safeguards the reputation of the public officer and their agency.
Case study – Operation Charnley
IBAC investigated allegations a councillor was accepting bribes in the form of gifts in exchange for awarding community grants to a local businessman. Although the allegation was not substantiated, IBAC identified the councillor failed to declare the conflict of interest arising from his financial loan to the director of a company that supplied services to the council, and which had strong affiliations with an organisation that received council grants. The councillor also did not declare that he had received a motor vehicle in lieu of financial repayment of the loan.
The councillor’s failure to declare the loan and repayment with the motor vehicle created a perceived conflict of interest in relation to the councillor’s role in awarding community grants. The councillor should have declared this information via the requisite primary and ordinary returns in accordance with the provisions of the Local Government Act 1989.