Corrupt Auckland Transport execs jailed for five years

Auckland Transport corruption case defendants Stephen Borlase (left) and Murray Noone at the Auckland High Court

What's your verdict on the Auckland Transport bribery duo's five-year sentences?

Too tough
12%
About right
41%
Too light
47%
Total votes: 133

An Auckland Council manager and a private contractor have each been sentenced to at least five years in prison after being found guilty of corruption, bribery and fraud and convicted.

It is New Zealand's largest ever bribery case.

Murray Noone, a former senior manager at Auckland Transport and Rodney District Council, was sentenced to five years' imprisonment by Justice Sally Fitzgerald in the High Court at Auckland this morning.

Stephen Borlase, a former director of engineering company Projenz, was sentenced to five years, six months.

The sentencing follows Justice Fitzgerald’s ruling in December that the two were found guilty of Crimes Act fraud charges involving more than $1 million.

The offending took place between 2005 and 2013 at Rodney District Council and Auckland Transport. It was investigated by the Serious Fraud Office, which brought the charges.

While in senior management roles at Rodney District Council and Auckland Transport, Noone received undisclosed payments and gratuities from Borlase who was the director of Projenz, a supplier to Auckland Transport and Rodney District Council. The gratuities often came in the form of travel, accommodation and entertainment.

Borlase faced eight charges and Noone faced six charges. Both had pleaded not guilty. Borlase was found not guilty of four Crimes Act charges of dishonestly taking or using a document.

Justice Fitzgerald said today that significant media attention and public suspicion had negatively affected the image of local government.

She added that this country’s reputation had been affected too because it is a place “where public corruption is virtually non-existent.”

Worker morale at Auckland Transport had been affected, the judge said, such as employees saying they were embarrassed to say they worked for the institutions and were “tarred with the same brush.”

The Crown’s lawyer, Brian Dickey, said the offending of the two men “sits at the top of the range” and emphasised the extensive period and amounts involved in the corruption.

Mr Dickey said Borlase and Noone’s offending has had a significant impact on the trust of public institutions and a number of people at a lower level have been implicated, who are “effectively collateral damage.”

Representing Borlase, lawyer Ron Mansfield said Projenz had received little gain from the two men’s actions.

He said the only gain achieved was “the maintenance of a relationship.”

Projenz won contracts because of hard work, Mr Mansfield said, and “there can be no doubt that Borlase was highly professional as far as delivery of work.”

Noone’s lawyer, Simon Lance said his client didn’t try to influence board decisions for contract work.

He added there was evidence that otherwise Noone did his job well.

The defence lawyers said they endorsed a penalty of three to four years' imprisonment while the Crown argued for the maximum penalty of seven.

Another Auckland Transport manager, Barrie Kenneth James George, pleaded guilty in August for his part in the matter and was convicted. George received a sentence of 10 months on home detention.


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31 Comments & Questions

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Is this behaviour prevalent throughout the council??

Given the length of time the offending went unoticed it would make me think that others would be able to get away with it as well........

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I'd suggest that it is, I bet if the Procurement/Tender process was scrutinized we'd find a lot to be very concerned about. The gates proposed for Mt Eden in 2015 are a prime example, they were looking at spending $100k on them - I don't believe there's been a follow up on this but I would be very interested to know what the final cost came to and how the tender process went.

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But if you think about it, this type of offending is usually detected early and monitored for some time allowing the offending parties to dig a bigger hole for themselves, and a better case for the prosecutors to hang them with.

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Who were the auditors (no doubt, overpaid and underworked like everyone involved with this organisation)?
And given the much (self?) celebrated AT chair being one of three national finalists for the governance award, where was he in all this?
And what will he be doing to stamp out the corruption, which from the duration, extravagant entertainment and the big money involved, in one of the smaller divisions, would appear to be endemic?
I look forward to your follow-up interview with Mr Levy -- as will many, many more of your reader/ratepayers.

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Quote of the day
“where public corruption is virtually non-existent.”
Have a good look at IT tenders, rfi, rfp etc. for a start this is either a case of someone knows someone or discussions outside the process secures the deal. Okay it is not corruption per se but pretty damn close.
GETS was a good idea initially but even that is a waste of time now but allows purchasers to wash their hands.
Maybe this will lead to a workforce to look in to how contracts are awarded and secured other wise nothing will change.

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“where public corruption is virtually non-existent.”

I'm assuming that you have never had any dealings with Auckland Council then? The only explanations for half of their spending decisions (Devonport Library Curtain, Mt Eden gates, pretty much every "discretionary spend") are either corruption or incompetence. And given that incompetence is corruption (taking money from ratepayers for a job you are unable to do); it really is the only explanation for the Council's performance.

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I understand why Borlase went down, but I hope Noone wasn't a mix up. "Who else was involved?" "Noone".

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Not sure what Borlase went down for either...
"Noone received undisclosed payments and gratuities from Borlase..."

Nothing to see here then,

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Maybe we should all reflect upon the NBR articles, a few months back, that talked about issues with various local authorities, their relationship with "preferred contractors" and generally the whole tendering process, that really is a giant farce.
At the time, as a chartered accountant in practice, I said that I could point to very specific events that would support the NBR research.
So, here is an actual example out there in the public domain that would support these very real concerns.

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Now that these two are to have a holiday at the Boston Rd flats, it's about time the SFO went and had a look at another roading company that was in the midst of all this.

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Did you have someone in court? There is a huge amount of very dirty stuff to be dug up with this case yet, no pun intended.

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I was in court to look them in the eyes. In my 40 yrs of being involved in the Civil Construction Industry I have never witnessed anything like this. My experiences both with Client groups and Civil Contractors even after this happening is that we are 99% free of corruption.

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99% free ?? Well, of course you have to say that.

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While they're at it someone should look into the Audio Visual Tender for the new lush Auckland Transport offices in the Viaduct (old Vodafone building)
I've never seen a tender like it in my life....makes you wonder whose palm is being greased.

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I had always rubbished claims from mate saying Auckland council staff got back handers as took the good old "Not in NZ " stance , but now really have to wonder about some of these contracts and consents over the years. Unfortunately i did come across this 25 years agao in small town where, before tenders were opened i got a call saying what our tender was , who was going to get it and how we were being called as the person thought it "stunk". It transpired as he forecast . Happened agin a year or two , by small town council but you do understand that can happen, as they all know each other and probaly go to same golf club. So expect some leakage. NZ was (as i say to offshore business people) "somewhere where you trust someone until they prove otherwise , whereas overseas its dont trust anyone until prove themselves honest". Hope we stay like we were...

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I use to slip my Tenders in the Tender Box long before the 4pm closing time. I always knew my tender was the lowest but, I was consistently told it was always "received late". Yeah, right.

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The management of Auckland Transport is fairly and squarely to blame for part of what is a lack of proper financial oversight, prudent process and commercial nous. I wonder how the proponent of the One Council, the perk--busting Rodney Hide, is feeling now?

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I am sure Len would be very embarrassed by all this (if he knew how to be) as it was happening on his watch.....

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Every main contractor has 3 main suppliers they rotate while the other suppliers feed off the bottom as they can't afford rebates or other incentives .
Expensive construction builds doesn't come into the purchasing equation .

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I am astonished at how naïve folk can be. Without exception, gaunxi is the de rigueur for Council's throughout NZ. Well, this has been my experiences with them spanning some 30 years

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Paul - I'm not sure I'd really classify it as guanxi - and also not in the Rolls Royce class of bribery / commissions and middlemen. I just feel sorry for them and their families. They stuffed up.

Guanxi for those who are interested described below ( from Business Insider Australia)

Fundamentally guanxi is about building a network of mutually beneficial relationships which can be used for personal and business purposes. In this sense, guanxi is not so much different than the importance of having a strong network when doing business in any country. However, in China, guanxi plays a far more important role than it does in the West. While in the other parts of the world, you may be able broker a deal just through formal business meetings; in China it is necessary to spend time getting to know your Chinese counterparts outside the boardroom during tea sessions and dinner banquets. In addition to the time commitment, the depth of relationships developed through guanxi can be much deeper than business relationships in the west. For example, it is not uncommon for people who have strong guanxi to lend money to one another or to form a group to pursue business opportunities together.

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I use to conduct business in China. Believe me, no matter how you spin it, "guanxi' is just another word for corruption.

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So Paul by definition doing business with anyone you know in a social environment must be corruption.

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Nah, that doesn't flow at all. Terrible comparison.

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$1m over 8 years? This must be one of the least significant cases of local body (or Government) corruption seen in the last decade. One only has to look at the king's ransoms paid to the senior clerks in some of the totally useless quangos created in Christchurch since the quakes. (CERA, SCIRT, Otakaro Ltd., CCC, CityCare, or ask Jerry about the Ministry of Fletchers).

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I must admit to being surprised at the length of the sentences handed down. Maybe things are finally starting to change with regards to white collar crime in NZ. Or maybe the judge knew there would be an appeal and set the sentences a bit higher knowing that they could be lessened on appeal.
Who knows?

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Local Body corruption has been endemic in NZ for decades. In the 70's my boss spent his holidays with his contractor uncle in a small north island town. Uncle had put in a tender with the local council and received a call from the Contracts Manager who told Uncle that he needed a new car and if one was bought for him the contract was his. Uncle thought about complaining to Police etc but reasoned that if he did so he would never receive any more work from the council so nothing was done. Personally, I have seen the level of corporate entertainment and gifts provided to Auck Council managers by large contractors. It was always lavish and OTT because the payoff for the contractor was worth every penny.

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The 5 and half year jail sentence was completely over the top when you consider that on the same day, a father who killed his baby with a pillow only gets 4 years. Something not quite right here.

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Well if your going to go by that logic. You could also say that some finance company bosses were only sentenced to home-detention for many hundreds of millions of losses, and with these guys your only talking a million in this case. So as is written on just about every cell wall in this country, the words... Justice sucks. In these type of cases it certainly seems to.

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Now lets clean out the rest of Auckland Transport.
They would be the most incompetent outfitany one could design.
They have had to be corrupt to get this far by shutting everyone up.
They are pathetic and they know it.
Tell them to get off the high horse bit and lets have some monies worth from this useless and corrupt outfit.

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In my considered opinion, bribery and corruption at Auckland Transport (AT)
grew and became entrenched through the 'collaboration' model for contracting.

Who initiated this 'collaboration' model for contracting?

None other than corrupt senior Auckland Transport Manager - Murray
Noone.

Who supported and endorsed Murray Noone's 'collaboration' model?

Former Auckland Transport Chief Operating Officer Fergus Gammie.

Who took corrupt Murray Noone's 'collaboration' model for contracting to the Auckland Transport Board for their approval?

Auckland Transport Chief Executive David Warburton.

When did the BOARD of Auckland Transport approve corrupt Murray Noone's 'collaboration' model for contracting?

18 May 2011.

(Check paragraph [301] of the 'Reasons for the Verdict of Fitzgerald J' and read this for yourself.

In my considered opinion, former and current Auckland Transport Executive staff at the highest levels, and the Board of Auckland Transport have helped to develop and entrench corruption, by their support for this 'collaboration' model for contracting

What's being done about this 'collaboration' model'?

How is it lawful or proper for ANY 'public official' to simultaneously be a private consultant?

How widespread is THIS practice?

Anybody else asking these HARD questions?

By trying to pass off bribery and corruption within Auckland Transport as the work of a couple of aberrant employees, in my view, is just lying to the public.

Because the Board of Auckland Transport have declined to instruct forthwith, their CEO to ensure that Auckland Transport make details of all contracts worth less than $50,000, and ALL sub-contracted contracts equally available for public scrutiny on their website, I have made a formal complaint to the SFO against the Board of Auckland Transport for alleged criminal negligence.

Penny Bright

'Anti-privatisation / anti-corruption campaigner'.

2017 Mt Albert by-election candidate.

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