The ACT Integrity Commission has found the former chief executive of the Canberra Institute of Technology, Leanne Cover, guilty of serious corrupt conduct for failing to consult with the board about a series of multi-million-dollar contracts.
The commission had been investigating a series of contracts worth $8.5 million, which were awarded to mountaineer and consultant Patrick Hollingworth and his two companies Think Garden and Redrouge Nominees over a period of four years.
ACT Skills Minister Chris Steel demanded answers from the CIT board in 2022, saying he struggled to understand what the vaguely worded contracts were for and that he was concerned they may not have represented "an efficient use of public funds in line with community expectations".
The series of contracts were for tasks including "strategic guidance and mentoring services to executives and staff" as well as "design structures and elements that enable greater coordination of analysis and decision-making in relation to products, offerings and services".
Ms Cover, who stood down in June 2022 and had been on paid leave ever since — receiving her annual salary of more than $360,000 — resigned earlier this month.
Former CIT CEO 'intentionally' and 'deliberately' concealed information from board: report
The ACT Integrity Commission dubbed its investigation into the contracts Operation Luna.
Today, that operation was able to publish its first report which looked into the conduct of Ms Cover as well as the CIT's board chair at the time, Craig Sloan.
According to the report, Ms Cover was found to have engaged in corrupt conduct by "intentionally" and "deliberate[ly]" concealing details of the contracts with Mr Hollingworth's companies from the board.
Commissioner Michael Adams KC wrote that the consequence of Ms Cover's conduct had been to give Mr Hollingworth a "substantial financial gain at the cost of the territory".
The investigation also found Mr Steel and his chief-of-staff had expressed concerns about any further contracts with Mr Hollingworth's companies in December 2021.
But Ms Cover did not pass those on to the board and later entered into a final, almost $5 million, contract.
"The progressive failure to consult the board cannot reasonably be regarded as an oversight or a misjudgement: any reasonable CEO must have known that consulting with the board was not only desirable but necessary," the report read.
The commissioner wrote he was satisfied this "most serious" conclusion was "completely justified" as opposed to another scenario in which it was found that Ms Cover didn't inform the board because she didn't know she had to do.
It also found Ms Cover misled Mr Steel in a letter she wrote to him.
"It was formulated with the intention of misleading the minister as to the true position and constituted a gross breach of trust," the commission found.
Board chair cleared of corruption findings
The Integrity Commission ultimately found no finding of corrupt conduct could be made regarding Mr Sloan.
It did find that he failed to bring information about the contracts to Mr Steel, but that was ruled to be a "serious failure to exercise due care and diligence in the performance of his statutory responsibilities", rather than anything more.
The commission also found an earlier letter Mr Sloan sent to Mr Steel had contained a "misleading impression" which needed to be corrected.
Court action had sought to block release of report
Under the law the Integrity Commission is obliged to table its reports with the speaker in the ACT Legislative Assembly.
But that had been blocked by an application for an injunction to prevent the report being made public, before any judicial review of the commission's findings.
Earlier this week the court rejected the injunction, but did not lift suppressions on the hearing, pending today's deadline to lodge the appeal.
This afternoon, the legal battle was cleared when no appeal was sought.
'Bitterly disappointed': Skills minister
In a statement released this evening, Mr Steel said he was "bitterly disappointed" about the findings against Ms Cover, given CIT was the "cornerstone" of the ACT's vocational education and training system.
"It is an egregious breach of public trust that, when scrutinised by myself, my office, and the Government Procurement Board, the former CEO acted so dishonestly and in a pattern of concealment from the CIT board," he said.
"A breach of public trust like this is unacceptable and this report sends a strong message to all senior executives in the ACT public service and statutory authorities that our high expectations must be upheld, or there could be severe consequences through a finding of corruption."
Mr Steel said he had written to the board requesting an update on efforts and options to recover public money which went to the contracts.
The CIT board chair Kate Lundy also released a statement this afternoon, saying the board had made several changes since 2022, including a focus on risk management and preventing fraud and corruption.
That included regularly briefing the minister on improvements to governance, procurement and financial management.
She said that as the broader Integrity Commission investigation was underway, no further comment could be made in relation to that.
"The board looks forward to receiving the final report and will consider any recommendations that the Integrity Commission may make to improve governance," she said.
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2024-06-27 09:21:44Z
CBMicGh0dHBzOi8vd3d3LmFiYy5uZXQuYXUvbmV3cy8yMDI0LTA2LTI3L2NpdC1jZW8tZ3VpbHR5LXNlcmlvdXMtY29ycnVwdC1jb25kdWN0LWFjdC1pbnRlZ3JpdHktY29tbWlzc2lvbi8xMDQwMzI4MjLSAShodHRwczovL2FtcC5hYmMubmV0LmF1L2FydGljbGUvMTA0MDMyODIy
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