Icac Finds Corrupt Conduct Against Former Sydney Ferries Ceo

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4th November 2009, 01:43pm - Views: 850
ICAC Finds Corrupt Conduct Against Former Sydney Ferries CEO for Corporate Credit Card Misuse

The Independent Commission Against Corruption (ICAC) has made corrupt conduct findings against former Sydney Ferries Chief Executive Officer, Geoffrey Smith, for misusing his corporate credit card to incur personal expenditure of more than $237,000.

In its report on an Investigation into the misuse of Sydney Ferries corporate credit cards, released today, the Commission also found that Mr Smith engaged in corrupt conduct by knowingly falsely claiming in a letter to the Minister for Transport in October 2008 that Sydney Ferries' use of corporate credit cards was in full compliance with government policy so that he could hide from the Minister the fact he used his card for personal use.

The ICAC is of the opinion that consideration should be given to obtaining the advice of the Director of Public Prosecutions (DPP) with respect to the prosecution of Mr Smith for offences under the State Owned Corporations Act 1989 and for the common law offence of misconduct in public office, and of former Sydney Ferries Chief Financial Officer, Vincenzo Rossello, for giving false or misleading evidence contrary to the Independent Commission Against Corruption Act 1988.

The Commission found that between September 2006 and March 2009, Mr Smith charged a total of $237,102.23 of personal expenses to his Sydney Ferries corporate credit card. He did so knowing that he was not entitled to use the card to incur personal expenses and that its use was restricted to Sydney Ferries business expenses. Mr Smith's personal expenses included petrol, school fees and groceries.

Mr Smith also incurred other personal expenses in addition to the use of the corporate credit card. These included more than $7,000 in travel fares for Mr Smith's wife to travel with him when he attended conferences in Melbourne and Hong Kong that were paid for through a Diners Club credit card issued to Sydney Ferries. The report notes that these airfare expenses have not been repaid. "Mrs Smith's airfares were paid out of the public purse and remain outstanding, it says. In late 2008, Mr Smith directed his Executive Assistant to book and pay for a Sydney Ferries executive Christmas lunch that cost $2,410 on her Sydney Ferries corporate credit card. Although the Commission is not satisfied that Mr Smith was aware that this conduct contravened government policy prohibiting the use of State funds for such functions, the report notes that a "responsible CEO would have made himself aware of relevant policies before authorising the expenditure of public funds".

The Commission has also made four corruption prevention recommendations to Sydney Ferries, including that its annual reporting requirements in relation to credit card use be based on actual certification of compliance with the Treasurer's directions. The Commission also notes that since the allegations against Mr Smith were made, Sydney Ferries has implemented a number of other corruption prevention measures.

The Commission conducted a public inquiry, as part of this investigation, over four days between 24 and 29 June 2009. The ICAC Commissioner, the Hon Jerrold Cripps QC, presided at the inquiry at which 10 witnesses gave evidence. The report is available on the ICAC website at www.icac.nsw.gov.au .

Investigation into the misuse of Sydney Ferries corporate credit cards

ICAC FINDINGS
*The ICAC has made findings of corrupt conduct against the former Chief Executive Officer of Sydney Ferries, Geoffrey Smith.

*The Commission finds that Mr Smith engaged in corrupt conduct by using his Sydney Ferries corporate credit card between September 2006 and March 2009 to incur personal expenditure of $237,102.23 knowing that he was not entitled to use the credit card to incur personal expenses and that its use was restricted to Sydney Ferries business expenses.

*The Commission finds that Mr Smith also engaged in corrupt conduct by knowingly claiming in a letter to the Minister for Transport on 29 October 2008 that Sydney Ferries' use of credit cards was in full compliance with government policy so that he could hide from the Minister the fact that he used his corporate credit card for personal use contrary to relevant policies.

ICAC RECOMMENDATIONS
*The Commission is of the opinion that consideration should be given to obtaining the advice of the Director of Public Prosecutions (DPP) with respect to the prosecution of Mr Smith for misconduct in public office in relation to: the misuse of the corporate credit card for personal expenses; and the false claim he made in the letter to the Minister dated 29 October 2008.

*The Commission is also of the opinion that consideration should be given to obtaining the advice of the DPP with respect to the prosecution of Mr Smith for using his position as an officer of a statutory State Owned Corporation to gain advantage for himself contrary to the State Owned Corporations Act 1989 in relation to his misuse of his corporate credit card, and acting dishonestly in the exercise of his functions contrary to the Act, in relation to the false claim he made in the letter to the Minister dated 29 October 2008.

*The Commission is also of the opinion that consideration should be given to obtaining the advice of the DPP with respect to the prosecution of former Sydney Ferries Chief Financial Officer Vincenzo Rossello for an offence against the ICAC Act of giving evidence during the public inquiry that he knew to be false or misleading.

CORRUPTION PREVENTION RECOMMENDATIONS
The ICAC has made four corruption prevention recommendations to Sydney Ferries, including that:
*Sydney Ferries' annual reporting requirements in relation to credit card use be based on an actual certification of compliance with the Treasurer's Directions.

*For the purpose of internal audit responsibilities, the position of Audit Assurance Manager have an additional reporting line to Sydney Ferries' Audit Committee and/or Board.

*The Audit Assurance Manager be appointed and trained as a protected disclosures officer.

*Sydney Ferries amend its code of conduct and protected disclosures procedures so that staff can and should report suspected corrupt conduct to members of the Audit Committee.

BACKGROUND
*The Commission's investigation arose as a result of a report received from the Director General of the Department of Premier and Cabinet, based on a protected disclosure made by a Sydney Ferries Officer on 17 March 2009 to its Corporate Counsel & Company Secretary about Mr Smiths continued use of his corporate credit card to incur personal expenses.

*The Minister for Transport announced on 26 May 2009 that Mr Smiths employment had been terminated.

Media Inquiries: ICAC Manager Communications & Media
Nicole Thomas
02 8281 5799
0417 467 801

SOURCE: ICAC



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