More emails —DCC aftermath of full council meeting 14.12.15

Updated post
Mon, 21 Dec 2015 at 1:00 p.m.

“I have told you personally of a relationship with a DCC manager where I had to pay a 10% backhander to get a contract.” –Cr Vandervis to Mayor Cull

### ODT Online Mon, 21 Dec 2015
Contract fraud call at DCC
By Chris Morris
Dunedin city councillor Lee Vandervis’ actions will form part of a fresh fraud investigation inside the Dunedin City Council, after he claimed to have paid a backhander to secure a council contract. Council staff have confirmed his actions would be examined by the council’s internal auditors, Crowe Horwath, under the council’s new fraud prevention policy.
Read more

Otago Daily Times Published on Dec 14, 2015
Cr Lee Vandervis instructed by Mayor Dave Cull to leave meeting.
[Vandervis statement around 1.25 mark]

Received from Lee Vandervis
Sat, 19 Dec 2015 at 10:56 p.m.

Re: Town Hall Redevelopment Project and Citifleet fraud allegations

—— Forwarded Message
From: Sandy Graham
Date: Fri, 18 Dec 2015 02:37:27 +0000
To: “Council 2013-2016 (Elected Members)”
Cc: “Executive Leadership Team (ELT)”
Subject: Additional LGOIMA emails re Various matters related to allegations from Monday meeting


Please find attached an additional PDF that was included in the information provided to the ODT but got missed in my earlier email to you.



Sent: Friday, 18 December 2015 12:48 p.m.
To: Sandy Graham
Subject: Message from KM_C454e

(1) Attachment:
SC454E0591715121812470 [683890] (PDF, 169 KB)
Lee Vandervis to Bidrose 28.6.15 [thread]

Related Post and Comments:
19.12.15 DCC aftermath of full council meeting 14.12.15 (emails released)

Posted by Elizabeth Kerr


Filed under Architecture, Business, Citifleet, Construction, DCC, Democracy, Dunedin, Economics, Infrastructure, Name, New Zealand, OAG, Ombudsman, People, Police, Politics, Project management, Property, SFO

29 responses to “More emails —DCC aftermath of full council meeting 14.12.15

  1. Hype O'Thermia

    ​I wonder how long ​it will take now to respond to Cr Vandervis’s “number of related information requests”. Delays as usual, or is something being learned?
    A person could be quite embarrassed – refusal to hand over LGOIMA requested info, resulting in his having to go to the Ombudsman >> 11 month delay! I mean of course any person who had not loyally embraced the “hobble Vandervis” kaupapa that took precedence over Mayor Cull’s and indeed Greater [debt] Dunedin’s pre-election promise of greater transparency.
    But that was pre-election, a long time past, and an expensive time for Dunedin.

    “The past is a foreign country: they do things differently there” as LP Hartley noted.

    There’s another election coming up and we have a chance to do things differently then.

    • Elizabeth

      This time last year, memory slightly rusty, I think there was something like 11-13 complaints (perhaps there were more) against DCC laid with the Ombudsmen’s office. Will check on that, and also what the active total is now.

  2. Elizabeth

    Chris Morris on DCC’s new fraud investigation. Note all comments are OFF for this story. God forbid the public should have a view or corroborate Cr Vandervis’ allegation, or that of Cr Doug Hall. Two elected representatives, and Mayor Cull going for a jugular he is too short to reach – bring it on.

    ODT: Contract fraud call at DCC
    Dunedin city councillor Lee Vandervis’ actions will form part of a fresh fraud investigation inside the Dunedin City Council, after he claimed to have paid a backhander to secure a council contract.

    • Hype O'Thermia

      Comments off? How amazing.
      Avoid the risk that Cr Vandervis has gone to the length of outing himself in (yet another) attempt to clean up corruption and stop throwing ratepayers’ money around because (for DCC) there’s always more where that came from.
      Cr Vandervis has been a lonely figure among all those truth-dodgers. Sidelined wherever possible, and apparently loathed (or is that feared?) by the mayor.

    • Hype O'Thermia

      “Council staff had followed up on Cr Vandervis’ questions but Mr Bachop had lied in his responses, which were not independently verified, Deloitte found.”
      Gee whiz, who’d have thought a person being investigated for ANY misdeed would lie in his response?
      Must be the first time Deloitte encountered this, “…..not independently verified…..” Well considering how extremely unlikely it is that such a thing would occur, why would anyone seek independent verification?

      And how unsurprising that ODT comments are off for this report?

  3. jeff dickie

    I did try to post a comment here [ODT] this morning. However I note the comment option is now not available and I’m not holding my breathe for mine to appear! What I said was, it was Vandervis’ lone voice that blew the whistle on the scandalous Citifleet fraud. It simply wouldn’t have happened without him! I know who I believe regarding allegations of further fraud and ongoing incompetence. If Cull, Bidrose and their compliant cronies had spent as much time, effort and our money addressing the systemic problems, as they have on trying to gloss over that fraud, we would have a far better performing council. It has been an exercise in damage control for gross misconduct happening on their watch.

    What should be also noted, is the appalling actions of the majority of DCC councillors who have proven themselves to be spineless pawns of Cull in his petty and vindictive treatment of Vandervis over the well proven fraud. That is, the removal of his voting rights. This undermines voters’ democratic rights and is probably illegal.

    It is interesting to note that City Property is finally going to be examined. My letter in the ODT 3 January 2015 points to a conversation I had with Cull several years prior, where I warned this DCC subsidiary, along with Citifleet, Delta, CST and others should be audited. Cull’s published defamatory response where he calls me a liar is still pending legal action for damages. Further, I hope Vandervis seeks a legal response for Cull’s recent foolish knee jerk remark calling him a “liar”! Both defamatory remarks point to an appalling lack of judgement incongruous with the office of mayor. Two large amounts for defamation against Cull have already been paid.

    • Hype O'Thermia

      “Liar!” appears to be the sole Cull response to unwelcome information.
      If he were a wiser man he would put his fingers in his ears and go “Lalalalalalalala”.
      Not dignified, but on the plus side not actionable either.

    • Diane Yeldon

      The Mayor can properly receive indemnity from prosecution for defamation ONLY when he speaking for and on behalf of the council. So if Mayor Cull (or any other mayor) were to recklessly shoot their mouth off with personal opinions which a court determined to be defamatory, then the council’s insurer would IMO be perfectly justified in refusing to pay out. Only fair. Why should ratepayers give anyone, regardless of whether they are an elected rep or not, regardless of whether they are in the top job or not, carte blanche to defame anyone (possibly a local ratepayer). It is simply not in accordance with natural justice for the rates Cr Vandervis himself pays to be used to allow another elected rep (in this case, the mayor) the apparent right to defame him (Liar! Liar!) with impunity.

      • Elizabeth

        I like your comments Diane.
        We should do a diatribe on natural justice here at What if? some time.

        Trust me, 2016 looks to need it and it’s only Week 2 (where needed).

        • Diane Yeldon

          I think that once before on this website. I gave the opinion that although permission to build a certain hotel had been declined, like Arnie in the movie, THEY WOULD BE BACK.
          So, as soon as I saw this headline in the ODT, I asked myself – Is this the same people who were behind the former application? Is the site the same piece of land as before? And, above all, why is it necessary to remain SECRET? When people keep something like this secret, it is hard not to believe that they are up to no good with respect to planning law. It is also hard not to believe that someone in Dunedin knows just what that is. And perhaps it is someone working for the DCC.
          I have become very suspicious over the years, that the more expensive a planning application, the more likely someone is up to no good! And here is talk of $90 million!

        • Elizabeth

          If it’s only NZD $90million then it will be, and it will look like, a cheap build on formula. $90m doesn’t buy great design for contextual fit and superior liveability. Last time we were told we were getting a hotel we sorely needed it turned out to be damned small room numbers-wise as the whole tower was mostly ghastly shoebox apartments for a supposed university market that didn’t exist. University rolls are dropping so what is the domestic or international market now that wouldn’t prefer the amenity and trappings of Queenstown with its positively aggressive clued-up international airport.

  4. photonz

    So Mayor Cull refuses to investigate Councillor Vandervis’s claims, and labels them false.

    So why would a Mayor, who has refused to investigate the allegations, PREJUDGE them as false?

    That’s like a judge pre-judging court cases, not only before they’ve gone to court, but before the police have even done any investigation.

    In any other city, the local media would come down on such an appallingly dodgy stance from a public official like a ton of bricks.

    But in Dunedin we have the ODT. Are they in bed with the council, or are they just pathetically weak when it comes to exposing whitewashing, even when it is so public and so blatant?

    • Hype O'Thermia

      photonz, you and I and indeed Dunedin itself are currently living in Wonderland, sharing Alice’s astonishment at how things are done here – “I’ll be judge, I’ll be jury, I’ll try the whole cause, and condemn you to death.”

      Fury said to a
      mouse, That he
      met in the
      “Let us
      both go to
      law: I will
      YOU. –Come,
      I’ll take no
      denial; We
      must have a
      trial: For
      really this
      morning I’ve
      to do.”
      Said the
      mouse to the
      cur, “Such
      a trial,
      dear Sir,
      no jury
      or judge,
      would be
      “I’ll be
      judge, I’ll
      be jury,”
      old Fury:
      try the

      • Diane Yeldon

        The very lines I was thinking of.

        • Diane Yeldon

          Doesn’t New Zealand have ‘whistle-blower’ legislation, which gives the whistle-blower immunity from consequent prosecution? The reason for any admission of involvement on Cr Vandervis’ part is to draw attention to past corrupt practices at the DCC and, by doing so, prevent them from re-curing. That is an admirable motivation and should be applauded, not punished. Instead of being outraged and hounding Cr Vandervis, to say nothing of childishly and repeatedly shouting, ‘Liar!”: at him, surely the DCC should be investigating his claims thoroughly and providing the public with reassurances that, regardless of whether or not ‘backhanders’ were the done thing in the past, (not just in Dunedin but in other local bodies as well), they can’t possibly be happening now and will NOT happen in the future. I thought that was what the new DCC Procurement Policy was all about – to increase transparency and accountability. If so, well done, DCC. Just don’t get your knickers in a knot trying to defend or deny the existence of the past crooks when it’s common local knowledge that the old DCC was full of it. The reason IMO that Lee won’t let it go is because he is an honest man and maybe it really pissed him off at the time and he hasn’t forgotten, even thirty years later. Maybe he hated feeling forced into that position, needing to be successful in his business, as no doubt many other contractors did. To tempt someone is always evil. To be tempted is often human weakness.

        • Elizabeth

          Indeed. CE Bidrose even brought in a new Whistleblower Policy recently – a pity then that the chair of Audit and Risk Subcommittee is the go-to for DCC staff – independence Not assured.

          However, the DCC policy HAS TO reference the Protected Disclosures Act

          █ [DCC] Protected Disclosure/Whistleblower Policy (PDF, 96 KB)
          28 May 2015: The Policy sets out how you report serious wrongdoing such as corrupt, unlawful or irregular activities and what protection is provided to you in these circumstances.


    • Diane Yeldon

      ODT and Channel 39 and ALL of Allied Press are NOT in bed with the council. They don’t need to be, it’s the other way round and Allied Press- just needs to whistle. It’s more like this – with the poor old DCC playing Lauren Bacall’s part but maybe not so tough. Just responding to the whistle, immediately. And at once, Sir. And Sir.

      Or at least it was like that in the past. Let’s hope it’s changing. And the power of free speech on the internet is making a positive difference.

    • Diane Yeldon

      I believe Mayor Cull’s ruling in the meeting (14 Dec 2015) was incorrect and based on incorrect legal advice (which I am not sure came from a lawyer with a current practising certificate). Because councillors have qualified privilege which allows them to make statements and assertions DURING council meetings which if said OUTSIDE council meetings could be actionable for defamation. It is in the public interest that councillors be allowed to make such statements.

      I don’t believe Cr Vandervis’ intention in making these statements about former and possibly continuing corrupt DCC tender processes and realities was either mischievous or malicious. I believe it was in the public interest.

      How on earth could it have possibly been malicious or mischievous when, in the process of what seems to me clearly to be whistleblowing, he (in at least some sense) accused HIMSELF? As a whistleblower, IMO he receives immunity from any prosecution or penalty for his own involvement because it is perhaps only because of his own involvement that he has evidence that the alleged bribery was taking place.

      Actually ‘bribery’ is not the correct word here. Because the concept of ‘bribery’ implies that the one seeking the council contract makes the improper approach to the council manager. The situation is quite different when the council manager is the one taking the initiative in this dirty dealing and demanding a ‘sweetener’. Now I don’t know the exact term for this but I’m sure there is one. Will consult the Oracle (ie Google it).

      I am EXTREMELY PISSED OFF that the ODT (as usual) is misrepresenting the situation in such a way as to blacken Cr Vandervis’ name. I am quite sure Cr Vandervis would NEVER have initiated any dishonest deal. I know him to be a scrupulously honest person and believe that his political motivation has always been to put an end to the … er, um, … not so scrupulously legal dealings of the Dunedin City Council. Even as an outsider (although one with a background in local government matters), I had not been living in Dunedin for more than a year before it became apparent to me that a CHASM existed between what the law prescribed for the conduct of local government procedures and processes and what actually took place in Dunedin.

      Without a doubt, this situation was seriously aggravated by the fact of a media monopoly here, perhaps resulting in my observation that reporting of council meetings did not seem at all to always be accurate representations of the meetings which I myself attended. I was particularly bemused by the ODT’s repeated claim that Cr Vandervis had called Council staff ‘dogs’. This example of misleading reporting is so illuminating (and a matter of archived record) that I hope any other readers or commenters on this website already in the know about this saga will explain it to others as yet unfamiliar with it.

      {Link -Eds}

      • Elizabeth

        That ‘dogged’ situation Diane refers to was during a snowfall whereby citizens’ stranded cars were being ticketed by DCC parking officers. Cr Vandervis having been out and about in his 4WD helping members of the public that day – had asked for the dogs to be called off. Plainly, that DCC use discretion and take into account people’s plight on a Snow Day. It turned nasty when persons who shall remain nameless developed convenient if not overblown sensitivities, in my opinion, to misrepresent the situation for their own agenda.

        That is my understanding and it is documented elsewhere at this website as well as at ODT.

        “Failure to respond by return with the decision to call the DCC dogs off our hapless motorists WILL RESULT IN AN ENTIRELY PREVENTABLE PUBLIC ESCALATION.”
        –Lee Vandervis in an email to Athol Stephens, Tony Avery, Sue Bidrose, Kevin Thompson, Sandy Graham (Cc mayor and councillors), 16.8.11

        Go to

      • Diane Yeldon

        I think the correct term (which includes ‘bribery’), is ‘graft’. I think that this term may have a legal definition. And I think that the person who is initiating and committing the wrongdoing is always, in this case, the council official.

        • Elizabeth

          [Google] Graft
          A colloquial term referring to the unlawful acquisition of public money through questionable and improper transactions with public officials.
          Graft is the personal gain or advantage earned by an individual at the expense of others as a result of the exploitation of the singular status of, or an influential relationship with, another who has a position of public trust or confidence. The advantage or gain is accrued without any exchange of legitimate compensatory services.
          Behavior that leads to graft includes Bribery and dishonest dealings in the performance of public or official acts. Graft usually implies the existence of theft, corruption, Fraud, and the lack of integrity that is expected in any transaction involving a public official. Link

          [Opinion] ….Forms of corruption vary, but include bribery, cronyism, embezzlement, extortion, graft, institutional corruption nepotism, patronage. Now the measure should surely also include revolving door employment, post employment separation and Corporate and political spin presented via the mainstream media as news or ‘fact’….
          [Jacquelyne Taylor, blog comment Link]

          [New Zealand] Organised Crime and Anti-corruption Legislation Bill
          Nov 6, 2015 —This is an omnibus bill aimed at strengthening the law to combat organised crime and corruption. The bill proposes amendments to 12 different Acts to improve New Zealand’s ability to collaborate with international efforts to disrupt organised crime and ensure law enforcement agencies can quickly and effectively respond to new challenges. Introduction: 25/6/14

          New organised crime and anti-corruption regime
          Tuesday, 10 November 2015, 4:27 pm
          Press Release: Chapman Tripp
          The Organised Crime and Anti-corruption Legislation Bill has been split into 15 amendment Acts and passed. They will bring New Zealand into line with international conventions.
          Most of the Acts are already in effect. The exceptions are the Anti-Money Laundering and Countering Financing of Terrorism Amendment Act, which does not come into force until July 2017, and minor changes relating to criminal law.
          We outline the key changes since introduction of the Bill.
          Read more

          Ministry of Justice: Strengthening New Zealand’s resistance to organised crime
          An all-of-government response

          August 2011. This document identifies a number of areas where we will focus our attention over the next three years and sets out a coordinated all-of-government work programme to ensure we stay on top of organised crime.

          █ Download: Strengthening New Zealand’s resistance to organised crime (PDF, 451 KB)

        • Diane Yeldon

          Thank you for the info about ‘graft’, Elizabeth. It is with some degree of shock that I realised on reading this that while such corruption might entail dishonesty on the part of a single council manager acting alone, it might also involve a number of council employees conspiring together. Which in the case of a big organisation, like the DCC, would indeed constitute ‘organised crime’. Except that ‘disorganised crime’ may be the best that the DCC can manage.

        • Elizabeth

          Noted, particularly your last sentence Diane ~!!!

          In tracking Site Stats this morning, this old post was highlighted, topical….

          8.9.11 HELP, if the elected Council was bright
          The Dunedin City Council faces a financial meltdown of unprecedented proportion; a squalid bankruptcy of governance the cause. No-one knows the true dollar scale of the problem and many of the accounts are closed to public scrutiny. Cont/

          In 2016, the consolidated council debt is still in the region of $600 million.

  5. Rob Hamlin

    The tone of this article indicates that Lee might well be in trouble here.

    Most especially the comment:

    “Council staff have confirmed his actions would be examined by the council’s internal auditors, Crowe Horwath, under the council’s new fraud prevention policy. ”

    Indicates that he will be the centre of any investigation. One can assume that he will also be the centre of any subsequent action. The outcomes of which will be bachopesquely predictable in my opinion.

    The comment later in the article is pertinent:

    “Council staff had followed up on Cr Vandervis’ questions but Mr Bachop had lied in his responses, which were not independently verified, Deloitte found.”

    In cases where this culture has become established, paperwork and what people say simply cannot be relied upon as evidence. Ergo, there may well be no written evidence of the sort that the Council is requiring from Lee before taking action. I have never seen either an invoice or a GST receipt for a bribe, and I never expect to. In a closed community, wise people just don’t talk about what they may have seen, or been involved in. Some may remember the emergence via media ‘scoop’ of the mysterious DCTL residential mortgages a few years back. It was never explained just why such large numbers of DCC staff chose to bank with DCTL, an agent of their employer, when plentiful retail alternatives were available to them as a member of the general public. Nobody who had one said nuffin.

    Evidence can only be acquired by careful legwork and reconciling (or failing to reconcile) paperwork and verbal assertions with reality. Typically this requires staff at all levels, not only to be removed from responsibility for the investigation, but removed from the scene altogether while the investigation occurs via a third party.

    So, for example, if a company president buys a set of tyres out the organisation, that’s fine. There may be a mass purchase discount available that makes such a move perfectly OK. However, there should be documentation:

    1 – Purchase of tyres by organisation (Invoice/receipt)
    2 – Purchase of tyres by president (Invoice/receipt) (1 and 2 must match)
    3 – and most critically
    Matching (timing and amount) movements of money within the organisations and president’s own banking ledgers, confirmed by the banks involved. No cash should have been involved.

    And preferably
    4 – Tracing and checking of vehicle and tyres.

    Extracting items 3 and 4 is where you actually find out. But if one imagines that this is just for one transaction, the effort involved comes into focus. You cannot conduct a forensic audit on an entire organisation. You have to pick your targets and transactions. Negotiable consumables like fuels and tyres are virtually impossible to trace as entities, and are thus a favourite for fraudsters. Durables, especially with a specific identity, and money itself are favoured for investigators.

    The process is not a pleasant one. Those involved as targets exceedingly wish you to go away and will do almost anything to make you do so. They certainly will not cooperate, especially with private records and the extreme and immediate employment sanctions available in the USA for instance are probably not available here. But the moment when you actually establish that the specific planes/boats/cars that exist on paper do not exist in reality, or vise-versa is an immensely satisfying one. However it takes time, and support. You have no chance of getting anywhere if the staff at any level are still ‘in the loop’, able to access the records/witnesses, and to deny such access to others. This especially applies if the staff involved are senior.

    A good example of fraud that can only be detected by this method is depreciation fraud. Here’s how it works:

    A company president buys 10 Toyopet delivery trucks for $100,000 ($1,000,000) each for an overseas market, these are delivered there, paid for, and used for five years with straight line depreciation at 20% per year. At the end of that time they are zero valued, and are sold out to a single named buyer for a ‘profit’ of $20,000 a unit ($100,000).

    Except that’s not what happened. The initial dealer estimate may be real, but all the rest, except the actual money movements, is fake. Here’s what really happened.

    The CEO submitted the fake invoice, had the million bucks transferred into a shell company bank account in said country that he controls. He then issued the fake receipt, and bought a villa there with this money. After five years he then sells the villa and buys back the paper Toyopets from the company in the home country, maybe using the same shell company and an imposing suite of fake overseas paperwork, which goes off to rot in the basement. The Toyopets now come off the home company’s books. All the records in the home country company check out, and will continue to do so, but the CEO now has $900,000+ in a bank account which is ‘his’.

    This fraud can only be identified by going out and matching paper work with reality, and that eventually means actually sighting the Toyopets themselves. Do they exist? How many miles have they done? What’s their individual specification/condition/actual history? Even the dealer (if one is involved) may lie and confirm the invoice if they are doing a lot of business (relatively) that is in the gift of this CEO, and they or their minions are still in the loop. Ditto any local employees involved.

    Can’t see this type of investigation happening here. Thus, can’t see Lee being joined by anybody else in the dock.

  6. Gurglars

    Quite a brilliant example Rob, well and simply set out and explained.

    Now one can see how Brent Bachop went about the physical act of stealing and converting 152+ cars.

    With the assistance of the paper shufflers.

    None of whom have been outed, although some but not all have disappeared, not quite as permanently as was Bachop, but gone from the public and DCC consciousness, gone so they could not be interviewed and thus able to bring the whole pack of cards tumbling down.

    The only level of investigation that possibly delves into such masses of deceit is a Royal Commission led by an independent judge with wide ranging powers to subpeona and interrogate all witnesses.

  7. Hype O'Thermia

    Remember the DCC’s “Hey you police guys, don’t bother investigating this stuff, no worries”.
    Regarding Lee Vandervis, what will the message be? “Thumbscrews welcome, spare no effort to find him guilty of everything from pickpocketing to involvement in the Great Train Robbery and you can be assured of our ongoing appreciation, nudge-nudge.”

  8. Diane Yeldon

    Seriously, as an ex-Waihekean, where anyone who got offside with the cops suddenly found they had turned into a ‘grower for supply’ and got charged for it – totally regardless of whether they had any interest in good old Mary Jane or not, I am worried about Cr Vandervis falling prey to such an old tried and true way of nobbling an annoyance as planting pot on a person’s property. Is there any defence against crooked cops planting pot on your property? Even if you have a blood test which proved you were not a user, that still doesn’t clear you of false charges of growing for supply. I happen to know Lee DOES NOT USE POT. He won’t even allow my WWOOFers on to his property if they want to bring tobacco because he can’t stand the smoke anywhere near him.

    {WWOOF(er) World Wide Opportunities on Organic Farms or Willing Workers on Organic Farms -Eds}

    • Hype O'Thermia

      Why do you assume crooked cops would be the most likely to plant pot on Lee’s property?
      While they have been amenable to “don’t worry about this’n’that” which is probably quite welcome – saves their time – they are not the ones who have to date exhibited OTT ill-will to the councillor.

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