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ICAC slams Gillman "maladministration"

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The state’s corruption watchdog has slammed South Australia’s Urban Renewal Authority – Renewal SA – in a long-awaited and scathing assessment of the controversial Gillman land deal.

Independent Commissioner Against Corruption Bruce Lander determined the authority “engaged in maladministration in public administration, in that its practices resulted in a substantial mismanagement of public resources”, undermining Government arguments that the unsolicited sale represented the best deal for taxpayers.

Rather, Lander says he “suspects’ it will not end up being a favourable deal for the state.

Lander’s report also found the agency’s two most senior bureaucrats who oversaw the deal, former chief executive Fred Hanson and former chief operating officer Michael Buchan – who acted as chief executive after Hansen’s ousting last year – had engaged in maladministration.

However, he exonerated Premier Jay Weatherill and his now-Treasurer Tom Koutsantonis, who agreed to the proposal to sell around 400 hectares of land to consortium Adelaide Capital Partners without going to tender.

READ MORE: “Unprofessional” Koutsantonis to apologise

The report notes that both Weatherill and Koutsantonis were enthusiastic about the plan, with “the Premier’s enthusiasm, no doubt, infecting Minister Koutsantonis and his office and indeed the Urban Renewal Authority (Renewal SA)”.

“There can be a danger when the vigour with which a Minister advocates for a decision or a project has the effect of forcing the agency to act outside of proper process,” Lander found.

However, he determined the ultimate failure rested with Renewal SA, with the damning assessment that Hansen, a former Thinker In Residence who has since departed for the US, “did not perform his role as Chief Executive to a standard expected of a person in that position”.

He said the entire process applies was “outcome-driven” and consequently “not as rigorous and independent as it should have been”, with “the continuing failure to employ a probity adviser (representing) a serious departure from appropriate practice”.

Lander finds the Renewal SA board, many of whose members quit in the wake of the Gillman sale, was “treated shabbily” and “was not given the information that it was entitled to receive”.

“The Board should bear no responsibility for the transaction,” he writes.

Premier Jay Weatherill (left) with Treasurer Tom Koutsantonis.

Premier Jay Weatherill (left) with Treasurer Tom Koutsantonis.

The ICAC report also shines a light on internal tensions within the Weatherill administration, noting that despite a perception that Hansen “was keen to do Minister Koutsantonis’ bidding, the evidence suggests that Minister Koutsantonis had little or no regard for Mr Hansen and the URA”, privately referring to the agency as “useless” and “hopeless”.

“I find that Minister Koutsantonis’ communicated with public officers employed in the URA in 2013, using profanities during the course of meetings with those public officers,” Lander writes.

“Two witnesses said Minister Koutsantonis used the ‘c’ word during these meetings. Minister Koutsantonis denied that he did so.”

In any case, the commissioner found that “his language, however colourful, did not influence the advice given, or not given, by the relevant public officers”.

Lander’s report gives the Government a lifeline, making few recommendations for reform given a raft of new procedures have already been put in place since the scandal came to light, and the leadership of Renewal SA has been turned over.

But Lander does argue that his ICAC should have the power to conduct future inquiries into potential maladministration in public, “if such a public inquiry was in the public interest”.

In parliament yesterday, Planning Minister John Rau attempted to distance the Government from ACP’s stated plans for an oil and gas hub for the Gillman site, with the resources sector buffeted by plummeting prices.

“The fact that the price of oil has been reduced substantially by market forces or market manipulation, some might say, over the last 12 months or so, and there has been a dramatic change in the economics of the oil and gas industry, are things over which this government has no control whatsoever,” said Rau.

He said the primary consideration for the sale was “the price being offered by ACP for that land was good value, full stop”.

However, this is at odds with repeated public statements by Weatherill and Koutsantonis that the deal was not about money but jobs.

In any case, Lander’s report notes: “I cannot say that the Option Deed represents a good or bad transaction from the State’s and (Reenewal SA’s) points of view.”

“I suspect it will not be favourable unless all three Options are exercised and the transaction represents value,” he writes.

“I also suspect that ACP will not exercise all three Options even if it settles on the Stage 1 Settlement Date. I do not know if the Option Deed represents value because there is no current valuation.”

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