It’s not a “perceived conflict of interest” – it’s corruption


Catastrophes bring out the best and worst in people.

The best are helping out selflessly in their communities while the worst are looking for chances to exploit “disaster capitalism”.

Some of the worst came into public view this week when the Press revealed that three staff employed by the now-defunct CERA (Canterbury Earthquake Recovery Authority) to facilitate investment in post-earthquake Christchurch set up their own company to profit from their public positions and knowledge gained through their roles as public servants.

They have been fingered for trying to sell a property for $2.6 million from which they would have claimed a ”finder’s fee” of up to $300,000.

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The CERA staff involved were Murray Cleverly who managed the Greater Christchurch Investment strategy and two of his senior staff – Gerard Gallagher and Simon Nikoloff.
When asked about their behaviour Gallagher and Nikoloff said they were entitled to do private deals like this and that their employers had known about it from the outset.

Of course their employers knew – their boss himself was a partner in their dirty dealings.

Cleverly now chairs the Canterbury and South Canterbury DHBs while the other two have moved on to work for Otakaro – again in senior management positions.

With the matter made public all three have now been stood down from their public roles pending an investigation by the State Services Commission.

The SSC has now expanded its investigation after new revelations Cleverly used his position at the DHB to advance his private interests in a similar way.

Cleverly is a director of Silverfin Capital which last year bought the CDHB headquarters in Christchurch which is now leased back to the CDHB to use. Cleverly only declared what he called a “perceived conflict of interest” after the sale. He excused himself on the basis he personally had not negotiated the final deal.

For the Chair of a hospital board to get involved in the sale and leaseback of hospital property (the Chief Executive’s role) to a company in which he has a personal interest is not a “perceived conflict of interest”. It’s a scandal. It’s an outrage.

And if it’s not corruption then what could it possibly be?

What this situation shows most clearly is the complete lack of public service ethos in these individuals. It is a lack of ethical behaviour which now pervades the senior levels of our public services across the country – both in government and local body organisations.

It’s the inevitable outcome of bringing private sector values into public services through the likes of public-private partnerships, council-controlled organisations and state-owned enterprises.
We have developed a revolving door whereby private sector “experts” are appointed to senior public servant roles only to return to the private sector and use their inside knowledge to ripoff ratepayers and taxpayers.

For example when senior IRD officials are “negotiating” disputed taxes with corporations it’s not uncommon to find themselves opposite former senior employees of the IRD who use their inside knowledge of loopholes and potential loopholes to minimise the tax paid.

It will be an enormous struggle to rebuild a decent public service ethos within central and local government. It won’t happen without big changes in how our public services are managed and operated.

In this regard the Labour Party deserves credit for its policy to return Housing New Zealand to being a government department.

It is only that sort of structural change, alongside the removal of significant numbers of senior managers such as those with values revealed in this Christchurch scandal, that we can have any confidence our public servants are working for us rather than themselves.


  1. Good to see a decent post on the issue. I’ve been banging on about it in comments now for ages.
    Pervasive is right!
    Our SSC appears to see nothing wrong with it either.
    I’m not sure what the status of the old ‘code of conduct’ is these days, but it doesn’t seem to be taken seriously.
    We don’t have a public ‘service’ anymore – we have a set of fiefdoms under a corporate model that do not actually serve the public.
    The excessive use of contractors has also become a real worry – it can be a way of outsourcing accountability and responsibility and simply enables recruitment agencies and others to ‘clip the ticket’. Contracts being ‘ rolled over can go on and on and on. I know of cases in the past where the agency was taking more than the employee

  2. It’s all there the sense of entitlement. If these people don’t get the boot I would be very surprised. I can’t understand why this wasn’t in the public arena long time ago.

  3. And that is why we need a change of government this has all happened under the Tories who have been feathering their own nest

    • I’m sorry, Michelle. Not the Tories. The fourth Labour government and its huge upheavals, along with carving up ‘profitable’ departments and leaving the non profit bits grossly underfunded. Conservation was one.

      Plus stupidities such as scientists creating projects for contestable funds, wasting time and resource on froth and trivia at the expense of long term explorations.

      The Tories thought it was cute and ‘just like they do in big competitive countries’, kept it and expanded. But Labour drove this – and has never ceased. In its present form it seems to fear and despise public service. It certainly doesn’t know how to work with effectively.

      Decent conservatives knew how to use their servants well, and the collaboration produced selfless public service. (Think Public Works, Survey, Mines, Forest Service, Labour, Railways, Wildlife Service.)

      The nouveau riche have no clue. Small minds playing ‘king for a day.’ The old saw about ‘know the price of everything and the value of nothing.’

      We can’t go back. We can go forward and make a new and better. That trait is still present, despite the intervening mean years.

  4. It’s increasingly clear to me that we, as a people, have been bleached of our gumption. We ( present company accepted ) have become a country full of cowards. A beige wearing populace of hand wringers and safety-first, hanky flutterers. There should be, assuming the information you outline here is correct, a delegation of furious and hearty fellows tearing at the doors of those CERA fuckers as I write.
    Instead? An image of what would happen to us if we did, in fact, smash our way into CERA’s offices and fluff up those fine gentlemen’s feather pillows for them flashes across our minds does it not? Arrest, detainment, trial, judgement, fines and/or imprisonment. All a bit much when the mortgage and sundry other fungi attached to the mortgage must be paid and the kids must be fed and clothed. It’s interesting to note; that the more pretences of affluence we think we have to show, the more bothered we are at the spectre of losing it. Is the predilection for the twinkle and sparkle we’re sold by the MSM/Banks really just a control mechanism so when the Filth take away our stuff or make millions off our suffering i.e. Disaster capitalism, as you write, it’s easy because they have us, trousers down and over a barrel of debt and commitments? After all, if we got arrested protesting at CERA’s greed, deviancy and corruption, who’d feed Twinkie the cat or Dripping Rufus the designer dog? The labradoodlebullpoodleterrierspanielboxerschnauzer ? The one with cross eyes and six toes per foot who stares at blank walls while whimpering?
    There are countries out there still who’s populace would shoot Rufus, eat Twinkie then blow up the Town Hall, crooks and all. Are they, in fact, living the dream, to be human? And are NZ’ers just a box set of plasti-people, batteries not included. No spark. No energy. No vitality. No passion. No Love. Have we become a dreary, contemporary reflection of Victorian England grafted to our iPhones? To test that theory, I used to take my dog into Books and More in New Brighton. Some people would go grey with the fright and horror of it! A beast amongst the books ! Oh! The inhumanity! She would also follow me into Couplands Bakery but she quickly learned how to pinch pies unfortunately. She’d often dissapear off then come back to the shop with a slink and a wrapped pie in her teeth then sneak out that back and try to peel off the cellophane trying not to make a noise. Oh My God ! The commotion! I had the manager shrieking at me, people would call by all aquiver complaining, wailing, literally wringing their hands, their black, beady little Good Christian eyes glittering at the delicious thought of an opportunity to vent outrage, to flood their withered carcasses with enough adrenalin to enable them to tighten up the gimp suit they left their husbands in, in the back of the broom cupboard back in the three bedroom weatherboard bungalow with the red roof? Got Batts AND underfloor insulation mind you?
    “Think of the diseases !” They’d wail. I comforted them by saying she’d had her shots and wormings so she was unlikely to catch anything off them. Meanwhile, there were little kids skid-rowing up the gutters and teenagers, long having lost their souls to the tyranny of corporate fascism roaming about jobless and bored. And most jobs are tediously fucking boring anyway so who could blame them? But no one was bemoaning their plight. A plight foisted on them by opportunists quick to capitalise in societal dysfunction. “ Serves them right.” was a common rationale.
    Our Kiwi-as society started out as a fabulous thing. Scum like the CERA gentlemen are dragging us down into the mire of their level. Why the fuck can’t it be the other way around for a change?

  5. They have a “John Key slick move to make some cash while we can” mentality, as some of the Government ministers have their fingers also in the public pie also we understand now.

    Many have investments into road freight companies and real estate and are making legislative changes to benefit their portfolio too John so good old NZ is a corrupt country now as bad as ever under Nactional.

  6. City councils, district councils and regional councils are riddled with corruption. Indeed, we could go as far a saying corruption is what keeps the wheels of bureaucracy turning.

  7. TYhe inevitability of neo-liberalism’s “greed is good” mantra: corruption in our civil service. It was bound to happen and one wonders how many cases have NOT been reported!

  8. As an ex-pat in Australia for 20 years now this rort takes the cake.

    It used to be said here” it is only a rort if you are not in it”

    But even here being on both side of the deal would be a show-stopper, and nowadays with ICAC in every jurisdiction on this fact pattern the outcome is time to serve in one of Her Majesty ‘s minus 4 star hotels

    As opposed to indifference in NZ . Why, a slimy ethos of self interest by the people actually connected and who know the game.

  9. It’s been around a long time, Tainui ten years or so ago hired a bloke to look after there business interest, he looked after his first , Tainui took him to court and lost ,No outrage from general public.

  10. Well spotted Minto! And if our politicians have the quality of those in Romania and have their way, Cleverly and his henchmen may even be pardoned.

  11. Power corrupts. Absolute power corrupts absolutely.

    The level of corruption seems to sunk to a great low since election 2008. Which to me indicates that as long as the political party of the government of the day receives in one way or another a back-hander(lets call it a donation)then it’s unlikely the present government will do anything to chase up and condemn corruption that is happening under ITS watch.

    It also appears that some former senior staf of CERA were only in the job for what they could get out of it for themselves.

    But then isn’t it true CERA executives were paid more a day than what many low income NZers make in a week?

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