Investigation into councillors slammed as ‘failed costly vendetta’

Thursday, 7 December 2023

Lawyer Linda Clark faced accusations of a conflict of interest as she investigated five councillors for alleged breaches of the council’s Code of Conduct.

Clark, a partner at Dentons Kensington Swan and a former journalist, was brought in by the council to investigate a complaint by Deputy Mayor Laurie Foon about five Wellington City councillors – Diane Calvert, Ray Chung, Iona Pannett, Tony Randle and Nicola Young.

The investigation has not been popular, with other councillors asking Mayor Tory Whanau to call off the inquiry in the interests of uniting the council.

The complaint was about leaked information regarding a $32 million deal to buy the land under Reading Cinemas in the inner city in order to fund redevelopment of the derelict building.

Clark’s draft report made it clear the leaker would not be found. Now a copy of the final report from Clark has been leaked.

The report showed councillors repeatedly raised their discomfort with the process, claiming there was a lack of rigour, good faith and natural justice.

“This inquiry and its process has destroyed public trust and confidence in this council and, in particular, the Mayor,” wrote Calvert, Chung, Randle and Young in a letter to Clark. The four councillors acted in concert throughout the review, for the most part refusing to co-operate.

The review was a “failed costly vendetta against a third of councillors”, the group said on Wednesday afternoon.

“Two months, tens of thousands of dollars of ratepayers’ money, a predictable result, and a weaponised process that’s just not credible. For what?” they questioned. The four would not comment on the details of the report, which contained confidential information about the Reading deal.

Pannett also declined to comment. She acted separately from the group, but was similarly opposed to the review and its findings.

“As it is written currently, it is wrong on the facts and wrong on the interpretation of the law,” she wrote in response to the draft review.

In her correspondence with Clark, Pannett wrote that both the mayor and deputy mayor had told her she was not the focus of the review and was simply “collateral damage” as they tried to remedy the behaviour of her colleagues on council.

It was Foon who laid the complaint against her five colleagues. Her reasoning was quoted in Clark’s review, where she said the Code of Conduct was “black and white” and the five councillors had deliberately breached it.

“If we are not respected as a Council because we cannot contain information, I do not see how we can go forward in good faith with possible partners to make good opportunities or deals for the city that will progress it in the best interests of the ratepayer.”

The four councillors raised a potential conflict of interest as part of their response to the draft inquiry, noting that Clark knew Whanau in a personal capacity.

“I acknowledge that prior to my appointment I have met the Mayor in both a business and personal setting,” Clark wrote. But as Whanau was not the subject of the complaint or involved in the review, she considered that a conflict of interest did not exist.

Jordan Williams from the Taxpayers’ Union was also leaked a copy of Clark’s final report, which he said “smacked of an ingrained, secretive, toxic culture” at the council and was full of factual errors.

“There are things in the report that are simply wrong,” he said – the timeline of when information entered the public domain and the application of the Local Government Official Information and Meetings Act (LGOIMA) were among the mistakes.

Clark and her firm, Dentons Kensington Swan, had been put in an “impossible position” through the review, Williams said. The council was a large client of the firm and had asked them to do a clearly political piece of work.

As lawyers, their only ethical duties were to the client, making it impossible for the review to be independent, he said. The personal relationship between Whanau and Clark only made it more alarming. Whanau has said she has a professional relationship with Clark and has been to dinner at her house.

“It’s very difficult if a client holds you out as independent,” Williams said.

In the end Clark found nine breaches of the Code of Conduct by the councillors – none relating to the leak, but instead focusing on comments made to the media.

Randle and Young had undermined public confidence in the council by making negative comments about the deal; Calvert, Chung, and Young had implicitly criticised council employees; Calvert, Chung, Pannett and Young had disclosed confidential information.

The complaint itself had been “a symptom of a breakdown in trust and confidence between councillors”, Clark noted.

She recommended that the mayor note the report rather than taking the breaches further, “to give everyone the opportunity, in the interests of the city, to reflect and reset”.

Clark also recommended a refresher course in the LGOIMA for councillors and a public-excluded workshop where councillors could air their grievances about the complaint.

The timeline of events

The Reading Cinemas meeting took place on the afternoon of October 4, with the council voting to exclude the public.

The first story with leaked information identified that the meeting had been about Reading Cinemas. It was published by the NZ Herald, at 3.24pm on October 4.

One hour later The Post published a story with further leaked details, confirming the plan was to purchase the land under the Reading Cinemas building in order to offset the owners’ seismic strengthening costs and fund the redevelopment of the building.

The Post’s story was then updated with comments from councillors Ray Chung and Tony Randle, along with a statement from Mayor Tory Whanau saying leaks were “getting really boring” and she believed the city needed a “bold approach” to rejuvenation.

Clark concluded that comments from all councillors except Randle had disclosed “previously unknown information” and were breaches of confidentiality.

On October 5 or later, each of the councillors disclosed confidential information which Clark found had not already entered the public domain.

According to the report, the confidential information was: Pannett saying the deal involved giving money to Reading Cinemas, Calvert confirming the deal had been titled “City Activation project” on the agenda, Young describing it as a “property deal”, and Chung mentioning due diligence.

All of those elements were in the public domain on October 4, when The Post published its first story.