DCC Citifleet, more revelations….

Dunedin City councillor Lee Vandervis said he alerted council chief executive of the time Paul Orders that the Dunedin branch of Turners was consistently shut out of contracts it sought, mainly for the disposal of used cars in 2011.

### stuff.co.nz Last updated 09:57 24/10/2014
Citifleet ‘stonewalled’ auctioneer firm
By Wilma McKay
A Dunedin city councillor says the council should have investigated its fraught Citifleet unit three years ago, when he expressed concerns that it shut out firms like car auctioneer Turners. Lee Vandervis said that in 2011 he alerted council chief executive of the time Paul Orders that the Dunedin branch of Turners was consistently shut out of contracts it sought, mainly for the disposal of used cars. The city council said in June this year it was investigating practices within its vehicle fleet unit Citifleet.
Unit team leader Brent Bachop had died suddenly in late May. His death has been referred to the coroner.
A subsequent Deloitte investigation, commissioned by the council, unravelled a vast network of alleged fraudulent activity, some with selected car dealers and other individuals, over 11 years, equating to more than a million dollars in lost council revenue. Some of the activity involved profits from the disposal of second hand Citifleet vehicles allegedly being pocketed instead of being paid into council coffers.
Vandervis said he was concerned about Bachop’s business dealings when he was told by Turners and other Dunedin businesses they were having difficulty even engaging with Citifleet. He began pressing Orders on the issue and made a raft of requests for information around Citifleet. Vandervis suggested Orders meet the manager “to attempt to normalise a Turners/DCC business relationship”. Vandervis said Turners’ staff had expressed “long and on-going frustration at trying to deal with Citifleet vehicle disposals”.
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Posted by Elizabeth Kerr

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24 Comments

Filed under Business, Citifleet, DCC, Democracy, Economics, Media, Name, New Zealand, People, Politics, Project management, Property

24 responses to “DCC Citifleet, more revelations….

  1. Elizabeth

    Murray Kirkness says there’s more on Citifleet in Tuesday’s ODT.

  2. Elizabeth

    Council chief executive Sue Bidrose would not be drawn on details yesterday, saying only the council had now “completed all of its employment processes” relating to the alleged fraud.

    ### ODT Online Tue, 4 Nov 2014
    Two staff lose jobs
    By Chris Morris
    Two more Dunedin City Council staff have become casualties of the $1.5 million Citifleet fraud, it has been confirmed. The Otago Daily Times has been told two staff members have lost their jobs in recent days. The staff members have not been named. It is understood they worked in junior roles, below the council’s management level.
    Read more

    ****

    Insurance company pays out even though DCC knew about the Citifleet car fraud in the years prior to 2013 (via information supplied to Paul Orders when he first came into office) yet failed to start a fraud investigation….

    ### ODT Online Tue, 4 Nov 2014
    Citifleet insurance deal done
    By Chris Morris
    An insurance payout has halved the Dunedin City Council’s confirmed losses from the alleged $1.5 million Citifleet fraud. Council chief executive Sue Bidrose yesterday confirmed to the Otago Daily Times the council’s insurer, QBE, had agreed to a partial payment of $750,000.
    Read more

  3. Elizabeth

    “When the Police investigation is sufficiently advanced, the findings of the Deloitte report will be released publicly.” –Sue Bidrose

    ###stuff.co.nz Last updated 16:01 04/11/2014
    Council may recover alleged fraud vehicles
    By Wilma McKay – Southland Times
    Dunedin City Council says some of the 152 vehicles involved in an alleged fraud within its vehicle fleet unit may be recovered by its insurer QBE.
    [Council chief executive Sue Bidrose said] “The general expectation is that any money recovered from vehicle sales will now reimburse the insurance company and will not come to the [council]. We will work with QBE to assist them in any way we can to recover money lost.”
    Read more

  4. Phil

    I understand that one employee was from the DCC finance department. The other worked in an unrelated department but with very strong family ties and direct links to a number of vehicle sales. While the first employee may have simply had competancy issues (and I am not saying that is the case, merely a possibility), I believe it is in the public interest for DCC to name the second employee as it potentially answers some questions about who outside of DCC knew about the fraud.

  5. Elizabeth

    Another ‘related’ question.
    Who outside DCC had a fuel card ?

  6. Elizabeth

    It’s called slippage…. was it picked up via Jim Harland’s or Paul Orders’ identification and reining in of DCC credit card use? Would it show up against fuel use for fleet vehicles? How many cards were in circulation between staff?

  7. Elizabeth

    What on earth’s happened at ODT Online??? – it’s 3:15 pm and someone’s asleep at the wheel. Nothing posted at Recent Comments today.

  8. Elizabeth

    ### ODT Online Tue, 18 Nov 2014
    Citifleet: Buyers may be off hook
    By Chris Morris
    Car buyers appear unlikely to face charges as a police investigation into the alleged $1.5 million Citifleet fraud draws to a close. The Otago Daily Times understands police have all but concluded their investigation into the Dunedin City Council’s alleged vehicle fraud, and will present their findings to council staff within days.
    Read more

    It appears, just like the Delta and Carisbrook investigations, that DCC didn’t lodge a full complaint (Citifleet) with NZ Police and this has limited scope for prosecution. Until such time as a full complaint is lodged based on what the council and business records actually show there will be the complete snow job effected by Christmas.

  9. Rob Hamlin

    We do seem to be facing a complete breakdown of law and order among the white collar community within this country. What with ‘insufficient evidence’, ‘no breach of the law’ and ‘discharge without conviction’ becoming rife.

    Some simple mathematics shows us that $1,500,000 divided by 150 comes to around $10,000 per vehicle below market value for each vehicle disposed of. Full details of only one such transaction are known: that of Cr Prendergast, who was ‘outed’ by the ODT some weeks ago for reasons unknown. The vehicle in this transaction was apparently valued at some $3,000 upon disposal. Mr Prendergast said he paid about that for it. I presume that he has a receipt.

    Now in order to be on the ‘average’ per vehicle loss line for vehicle disposals over this extended period, far from charging him for it, Citifleet would have had to have paid Mr Prendergast some $7,000 just to take it away. There is no suggestion that they did anything like this.

    It is my understanding that most DCC vehicles are ‘well used’ by the time they are disposed of. It would be most interesting to discover what the market value of them was at the time of their disposal. Even if the average DCC vehicle for disposal had a value of over three times that of Mr Prendergast’s, then the sums would work out as:

    Vehicle value – Average loss to DCC = Price paid by purchaser $10,000 – $10,000 = 0

    Now when I was brought up, taking something without paying for it was known as theft. I am pretty sure that taking something that belonged to somebody else without their knowledge and then giving it to a third party would have been defined similarly – especially if the ‘donor’ had received some personal consideration in exchange for item from this third party. Had the third party been aware that the item did not belong to the donor, and/or was aware that the consideration did not align with its value (something that is hard to deny if the item is promptly onsold by the third party for a higher figure), then that third party would have been similarly defined either as a thief, or as an accessory to theft.

    If a situation arose where 150 vehicles worth $1.5 million had been disposed of without payment or for a token payment to third parties by an employee of a public organisation, I would expect this matter to be actionable against both giver and receiver under the Crimes Act. I would further expect it to be dealt with as a matter that would be separate from, and additional to, any civil action to recover the vehicles or their monetary value from those involved.

    I would also expect any individual with executive or governance responsibility to formally report/complain about such an act, to actively pursue it and to supply all available evidence to the police in a timely manner. Any such individual who failed to so do so after becoming aware of it, should be charged as accessory after the fact – however ‘honourable’ the motives for any such a failure might be.

    If it turned out that the activity was not in breach of any law, then I would expect legislation to be brought in immediately to close this clearly dangerous loophole, and for that legislation to be retrospective to deal with any known and blatant use of said loophole. After all, if the law can be amended retrospectively to stop the miserable ratepayers of Kaipara from ‘getting away with it’, then that logic seems equally applicable to this type of presumably pinstriped individual.

    • Elizabeth

      Indeed Turners Auctions provided the valuations to was it Mr Bachop or was it Mr Harland or both, I’m not sure… But after that the vehicles flowed off the council register (if they were ever on it) and Turners never received cars to auction. Somewhere in the middle of all this, as the new blood in, Paul Orders tried to rectify things without following up ready to hand information that fraud was happening right under his nose.

      Further, we hear there could be 17 distinct lines of fraud across town hall divisions. More on this in coming days. It seems too many, but truth or dare. Games are played to resist eternal vigilance.

      Not sure anyone could make 17 lines of fraud (if soundly and solidly present) go away, and given the fair share already of three potential cover-ups (Carisbrook, Delta and Citifleet*).

      *The Deloitte report on Citifleet for public release isn’t too far away. Luckily, a few of us enjoy sanitised reports, and have heaps of spare time on our hands to witness such, prior to and after Christmas.

  10. Phil

    And naturally the person who was offered 25 cars by a family member never once thought that something might be a bit dodgy. After all, everyone has access within their family to 25 dirt cheap cars exclusively offered to them for sale.

  11. Moral Compass??? Anybody found one? Not in the Town Hall obviously. Steady as she goes is the instructions from the bridge. Destination, to dock in the ‘best little city’ in the world. That is where a moral compass becomes an essential, and neither the captain nor crew seem to know where it is.

  12. Whippet

    Interesting that the ODT have named former Cr Prendergast as one of the vehicle buyers, but today reveal without naming, that they have spoken to someone involved in buying and on-selling 25 cars from Citifleet.
    Question is. Who is the ODT protecting by not naming this person involved with the purchase of 25 vehicles. When they were prepared to publish the name of former Cr Prendergast, who only bought 1 vehicle??

  13. Elizabeth

    We know that name and venture to mention their facility and reputation for knee-capping.

  14. Russell Garbutt

    Corrupt is the first and last word I think of when someone talks about the Tartan Mafia and all of their close connections. They do seem rather removed from any sort of accountability don’t they? But their time will come. The words are starting to come together.

  15. Rob Hamlin

    Another elite athlete/prominent person discharge without conviction today. http://www.odt.co.nz/news/queenstown-lakes/323774/skier-escapes-drink-driving-conviction. The plague continues. It seems to be getting completely out of hand. In this case the drunken individual got off because a conviction would ‘destroy his dream of competing in the Olympics’. Basically if you have a dream or opportunity then you’re OK, if you have no dream or opportunity – then down you go – or so it seems.

    Perhaps if their dream meant that much to them, then perhaps they shouldn’t have got pissed before getting behind the wheel – I can manage not to, so why can’t they?

    • This gets on my wick every time another instance of it comes up in sentencing, “if you have no dream or opportunity – then down you go.” If you’re already a lowly common person without great prospects (and privilege) in life, hey, another handicap is no big deal. Cursed be the meek, we’re in the post-christian era now.
      Baby, bathwater, it’s a pity the good messages were chucked out along with superstition.

  16. Phil

    Still on the list are the remainder of the senior staff who have been identified by Deloitte as being involved in serious and ongoing conflict of interest business dealings. Awarding uncontested contracts to family members with no internal checking, identifying a need for specialist equipment or services within their DCC department, buying the equipment/services privately, and then hiring it back to their own department. Most of the managers identified to date are long term managers with 20 years in the role. It seems that the younger staff elevated to management roles have a higher professional integrity level than their elder colleagues. I suspect a few more early retirements are on the horizon.

  17. Elizabeth

    17 lines of fraud, not possible. I’m told. But I don’t think I dreamt that.
    No-one would dream up a number like that.

    As Jim Sullivan would say, ‘sounds historical’.

    Of course, I’m reminded that managing conflicts of interest isn’t necessarily the same thing as fraud, that there are different tests for these committee/ staff/ councillor/ dogsbody/ contracting matters.

    Eheu.
    I could write a prose poem to the entitled at DCC.

  18. Elizabeth

    DCC is close to releasing the Deloitte Report on the Citifleet investigation. Another ‘stadium review’ with all the garnish removed for peasants to swallow.

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