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City council investigation fails to uncover media sources


The Adelaide City Council’s $20,000 investigation into an exclusive InDaily story about the value of the old Le Cornu site has failed to uncover how the confidential information was leaked, or who leaked it.

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Early this year, InDaily revealed that the council had bought the long-vacant old Le Cornu site for millions of dollars more than independent, professional valuations said it was worth.

The council had received two independent valuations of the property – of $20 million and $24.1 million to $27.1 million – before purchasing it from developer Con Makris for $34 million, using a combination of ratepayer funds and a State Government grant, in February.

The following month, councillors unanimously voted to order an investigation into who leaked the confidential details.

But the investigation, which cost ratepayers $20,000, has failed to identify who the sources were or how they gave the information to InDaily.

Audit firm KPMG was commissioned to analyse phone call and email records, assess council computer system access logs and interview councillors, staff and management to try and determine how the information was leaked.

“Based on the procedures performed we have been unable to identify how the confidential information became known to InDaily,” says the investigation report, published ahead of tomorrow night’s council meeting.

It concluded there were “no untoward emails, or emails that may raise suspicion of passing confidential information”.

It found that phone calls were made to media – but they were deemed to be “within the course of ordinary business” and consistent with the callers’ respective role.

“(Because of) timeframes, availability of personnel and willingness of employees and elected members to provide specific information, we have not interviewed all relevant witnesses nor obtained all potentially available evidence,” the investigation report reads.

“We made ourselves available to all councillors to discuss the matter (but) we have not taken formal statements from any witnesses nor have we pursued all potential avenues of enquiry.

“… we have been unable to conclusively identify any persons or means responsible for the alleged breach of confidentiality.”

A comment from council staff attached to the investigation report reads: “Given the absence of evidence in relation to the breach of confidentiality, it is suggested that this investigation be closed and no further reviews be undertaken on this matter.”

Central Ward councillors Megan Hender and Houssam Abiad, area councillors Anne Moran and Natasha Malani and North Ward councillor Phil Martin participated in interviews for the investigation.

Abiad told InDaily this morning that the investigation was a “huge waste of money” but that it would have been politically impossible for any elected member – including him – to vote against it.

He also said, however, that the council was obliged to look into potential breaches of the Local Government Act, which can attract a $10,000 fine or up to two years in prison.

“This over-the-top expenditure isn’t making anyone happy, except consultants,” he said.

“It’s a huge waste of money.

“(However) if there was a clear violation of the Local Government Act that needs to be looked into … the impact of this one might have been insignificant, but it was still a breach.”

Abiad said investigations had been used by some councillors as “cheap political shots in the chamber” to wedge opponents into voting for them.

“Otherwise you look like you don’t support transparency,” he said.

“It’s a difficult process to manage politically.”

Area councillor Natasha Malani said it was disappointing the KPMG investigation had been fruitless.

“Given the nature of the project, it certainly was disappointing to see the information was released … ahead of its time, that could have severely jeopardised the project,” she said.

“It was prudent that the council did investigate, however … it seems this has turned out to be fruitless.”

Lord Mayor Martin Haese said the investigation was justified.

“When council is embarking on commercial negotiations to realise the best possible outcome for ratepayers, it is important to ensure that confidentiality is respected,” he said.

“The negotiations to purchase the former Le Cornu site in North Adelaide is one such example where any potential breach of confidence warranted an investigation.”

Haese tweeted earlier this morning that his council was making progress to ensure the site, which has been empty for almost 30 years, is developed.

Investigation uncovers security flaws

Although the KPMG investigation failed to uncover the source of InDaily’s story, it did identify potential improvements to council security protocols.

It found that a number of councillors rely on agendas to be physically printed out – including confidential reports printed on pink paper – and these are left in their offices to be picked up.

Although councillors’ offices are behind doors that require employee swipe card access, they are not locked.

The report recommends council iPads be secured with unique user ID logins, that the council explore ways of better securing information held in its shared computer system and that and that the council review its confidential information handling processes for “appropriateness”.

Correction: A previous version of this article mistakenly said North Ward councillor Phil Martin proposed the investigation. In fact, South Ward councillor Alex Antic proposed the investigation in a motion that was seconded by Moran.

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