Dunedin Citifleece car dealers identified

The Otago Daily Times has effectively identified the car dealers involved with Brent Bachop in fleecing Dunedin ratepayers (officially of $1.5 million but there have been claims the true amount of fraud could be $3 milliion or more) – Identify car yards – dealers.

And apart from the lawyer of one of these dealers trying to make excuses other dealers condemn what was going on and want to be distanced from the “smear” on all dealers.

Names were blacked out in the Deloitte report but the ODT has identified dealers who were investigated.

…the Otago Daily Times has confirmed transactions with Dunedin City Motors and the former dealership Anngow Motors were examined by Deloitte, and understands the former dealership Armstrong Mazda was also investigated.

Dunedin City Motors dealer principal Robert Bain has declined to comment about anything in Deloitte’s report into the fraud, as has Armstrong Motor Group general manager Muir Gold, who also declined to comment on whether Armstrong Mazda was one of the companies investigated.

Unlike other dealers they haven’t denied being investigated.

ODT reports show Anngow Motors was sold to Armstrong Mazda in 2007, and Armstrong Mazda was sold to Dunedin City Motors in 2009.

So there’s an ownership link between all three dealerships. The ODT gives transaction details.

Dealership 3: Bought four council vehicles between 2003 and 2006; council received some proceeds in three cases. Paid DCC directly for three cars, and Mr Bachop directly for the other, for which the proceeds never went to council.

Dealership 2:  Bought three council vehicles in 2008; council saw no proceeds from sales. Ownership of each transferred from DCC to Mr Bachop shortly before the sale. Allowed a council vehicle, bought from same dealer three months earlier, to be used as a trade-in for a personal vehicle bought by Mr Bachop.

Dealership 1: Bought seven DCC vehicles between 2006 and 2012; council received some proceeds from one sale. Ownership of five transferred from council to Brent Bachop shortly before dealership bought them. Dealer aware of that in three cases. Proceeds for other vehicles paid directly to Mr Bachop despite still being in council ownership.

It’s easy to deduce which dealership is probably which from the dates. And it’s easy to deduce that shady dealing was happening.

A lawyer for one dealer who bought seven vehicles from Mr Bachop between 2008 and 2012, told Deloitte it was ”not uncommon” for vehicles previously sold privately to remain registered in the name of the former owner, or be transferred shortly before a sale to the company when the vendor realised the registration had not been changed.

It should be not common for a city council fleet manager to sell cars to himself and then on sell then to a dealer. It sounds highly suspect.

Staff had no knowledge of any apparently unlawful activity by Mr Bachop, who at all times appeared to them to be a trusted employee of council, they said.

Obviously it’s a lawyer’s job to diminish the culpability of their client but it doesn’t look like “trusted employee” activities. A car dealer interviewed by the ODT has a different view.

”It would be completely abnormal for many people to buy a car and change their mind about it that quickly,” one said.

And a car dealership director recognises issues.

A former director of Anngow Motors, Geoffrey Anngow, has confirmed that Deloitte had examined the company’s transactions. Mr Anngow said he was not privy to the company’s dealings with Mr Bachop, which were always conducted by Anngow staff.

He had ”absolutely no idea” if anything untoward was going on, but if he had become aware of any of the behaviour suggested by Deloitte, he would have ”recognised that was not kosher”, he said

I think it was fairly obviously not kosher.

ODT interviewed a number of dealers, some of whom did not want to be seen to be associated with the Citifleecing, while others were keen to be named as not involved.

John Marsh, from Cooke Howlison, was keen to make it ”very clear” his company had no connection.

”We’ve had absolutely nothing to do with it.’

It was a smear on all the dealers in town until those involved were named, Mr Marsh said.

It would only be a smear if something shonkey was going on.

Others said they would want the person who owned a trade-in to sign the contract, as well as the person buying the new car.

”You need to check with the owner that the seller has authority to sell the vehicle. You have to be quite careful,” one said.

”We’re a small town. It’s shocking and there needs to be some accountability,” the dealer said, anonymously.

Accountability seems to be something the Dunedin City Council is trying to avoid. Why?

Another said there was no doubt Mr Bachop had done wrong, but it was ”a shame” all the blame was landing at Mr Bachop’s door when the necessary involvement of others was ”being swept under the carpet”.

Sadly mayor Dave Cull seems to give sweeping a higher priority than representing the interests of ratepayers.

Another hoped the Ministry of Business, Innovation and Employment, which regulates motor vehicle traders, and the Inland Revenue Department, would also investigate.

There appears to be serious misconduct by some dealers so I hope some MBIE action could be taken against them.

Dealers shouldn’t be fiddling their tax but the Deloitte report says that Bachop was sometimes paid in cash. This could be of interest to Inland Revenue.

Inland Revenue should also be interested in multiple cars sold to private individuals and family groups, who would appear to have been effectively dealing.

The one councillor tried to get Bachop investigated in 2011 and is still trying to get some accountability, Lee Vandervis, has been said by Cull to have “zero credibility”.

Dunedin City Councillor Lee Vandervis said he tried to blow the whistle on the scam years ago.

“Most of the issues in the Deloitte report had been known about for many years. Certainly as far back as 2011 and nothing was done about it.”

Councillor Jinty MacTavish, said to be close to Cull, posted on Facebook:

I’m glad this report has been released this year. I want to head into 2015 with this behind us, getting on with the job of continually improving our processes and doing our darndest to deliver good outcomes for our great wee city.

MacTavish and Cull should be doing their darndest to represent the interests of ratepayers, not trying to sweep this away with the closing year.

Releasing the Deloitte report right before Christmas is a classic sign of trying to bury bad news hoping people will have forgotten about it after the holidays.

The police report on it is due to be released early next year. That will only be as effective as the information supplied by the Council and whether the Council makes any complaints.

But Cull seems to have made up his own mind already. Radio NZ: Council under fire after fraud report

Dunedin Mayor Dave Cull said the only employee involved in the fraud was Mr Bachop.

“Deloitte have concluded that there was no other staff member that benefited financially from the fraud,” he said.

“There were control failures and responsibilities but it was clear there was only one perpetrator in the council.”

That sounds like wilful sweeping under the carpet. I don’t know if anyone else in council was involved, but this doesn’t give me any confidence that it has been investigated properly.

Dunedin’s Mayor Cull misrepresents fraud report

In response to the damning Deloitte report detailing a possible $1.5 million fraud (for as far back as was decided to investigate) Mayor Cull has made some very questionable statements.

On Radio NZ (Council under fire after fraud report) Cull says:

“Deloitte have concluded that there was no other staff member that benefited financially from the fraud.

“There were control failures and responsibilities but it was clear there was only one perpetrator in the council.”

That’s not what the Deloitte report concludes at all. Under Were other Council staff involved?

DCCDeloitte3

Cull is wrong on a number of counts.

  • Finding no evidence is quite different to “concluded that there was no other staff member that benefited financially”.
  • Obtaining vehicles at a discount to wholesale market value is a financial advantage.
  • Deloitte said that the police “may be interested” in staff members who paid for vehicles that the Council received no proceeds or was paid materially less than market value.

Some of the staff members at least will have known they were getting a bargain at the expense of the ratepayers. And paying Bachop rather than the council, especially in cash, was imprudent at best.

And there is major redaction of details.

In addition under Limitations the Deloitte reports says:

2.14 There is an inherent risk there are other material frauds at Council not identified in this investigation.

For Cull to put all the blame on one dead person and claim the report concluded no one else in Council benefited, when the report went as far as saying the police may be interested in staff members involved, gives me no confidence at all that the Mayor of Dunedin takes this seriously enough.

He seems more intent on sweeping embarrassments under the carpet.

His serious misrepresentation of the Deloitte report gives the impression he could be seriously misrepresenting the interests of the city’s ratepayers.

Dunedin Citifleece report confirms gobsmacking laxity

The Deloitte report on the vehicle 9and other) fraud at Dunedin City Council confirms a gobsmacking laxity in the council financial systems and staffing oversight.

$1.5 million of taxpayers money stolen. Perhaps significantly more – they say it’s too hard to check the full extent.

Questions have been asked for years about questionable practices, and they were fobbed off. The council was beyond reproach.

It is hard to get a resource consent from the council. They have a well known reputation for stifling business development, and proposals to rezone land struggle against intransigent bureaucrats. Talk of fiefdoms and agendas within the council are common.

But when it came to systems and oversight within the council was unforgivably lax.

The blame is all being aimed at one person, the ‘Citifleet Team Leader” (perhaps that should be Citifleece) Brent Bachop, who died suddenly just days after being confronted. No suspicious circumstances regarding his death, many suspicious circumstances regarding his dealings within the DCC.

DCCDeloiite1Well over a hundred vehicles still on the Council asset register had been sold over the previous ten years. Too a variety of people who knew they were getting a bargain, and many of home paid cash or check directly to Bachop or paid into his own bank account.

This fraud didn’t happen without a willing market, at the very least.

DCCDeloitte2A number of gobsmacking control failings allowed Bachop to get away with this. And that’s just the vehicles. Able to sell over a hundred vehicles (the ‘high risk’ number was 152) without anyone else noticing anything wrong with the asset register. Over a ten year period.

And that wasn’t all.

Use of an unrestricted fuel card to purchase personal items including soft drinks, packets of chips, milk, chocolate biscuits,  bread and petrol for personal use – $102,908.

He bought a trail bike for $7,333.33 with council money that never appeared on the asset register and was never registered as owned by the council.

Cash withdrawals for topping up car park pay stations – $104,800 unaccounted for.

An un-named person was given a parking ticket in 2007 using a Council vehicle. Reported and no known follow up. Staff regularly observed person in Council vehicles during Council work hours. Person had use of Council car for the six months up until discovery of the fraud in May, and petrol and $3020 of repairs were paid by council in that period.

The openness of some of the abuses are as gobsmacking as the lack of systems, oversight or checking the many ‘red flags’.

As a Dunedin ratepayer throughout this period I’m appalled.

A number of changes have taken place and we have been assured that nothing like this will happen again. But no one has yet been held to account.

A dead man looks like being responsible in a big way. But he was allowed to get away with it by many others.

DCC: Deloitte Report Released

Redacted report: www.dunedin.govt.nz/deloittereport

Radio NZ:

ODT: $1.5m fraud: ‘Red flags were ignored’

ODT: Fraud: Weak council culture cited

ODT: Bachop at ‘centre of’ other issues

ODT editorial: DCC fraud: a salutary lesson

ODT Councillors waffle: Findings disappoint most councillors

What if? Dunedin: Vandervis: Deloitte and Police Citifleet investigations

Received from (councillor) Lee Vandervis
Fri, 19 Dec 2014 at 11:54 a.m.

Deloitte and Police Citifleet Investigations – information I believe should be public in the public interest.

What if? Dunedin: DCC: Deloitte report released on Citifleet #whitewash

I knew Brent personally and was shattered when he [died]. Whilst I am disappointed he was clearly guilty I cannot believe he was the only person involved. His death seems to be the opportunity for Council to draw a line under this matter and move on. One wonders what would have happened had Brent been held to account in a court of law. It is hard to believe that a few Council employees and purchasers of these vehicles would not have gone down with him. From what I am reading the whole fraud was committed by Brent and basically no-one else knew a thing about it. Even the most naïve of us knows that cannot be true. It is clear that if you were in the know and wanted a cheap car, Brent was the man to talk to. In conclusion, spare a thought for Brent’s family, his wife, his children, his parents. For them this nightmare goes on, they have lost Brent and yet the pain, grief and search for answers to why continues.

Radio NZ: Council under fire after fraud report

Dunedin Mayor Dave Cull said the only employee involved in the fraud was Mr Bachop.

“Deloitte have concluded that there was no other staff member that benefited financially from the fraud,” he said.

“There were control failures and responsibilities but it was clear there was only one perpetrator in the council.”

Deloiittes didn’t establish that at all.

Deloitte also found severe failings at the city council over the 11-year period, saying a number of aspects of the council’s culture allowed long-term fraud.

It said the processes for accounting for and monitoring fixed assets were severely deficient and there was little oversight of Mr Bachop.

Mr Cull admitted there were serious failings.

“Deloitte’s review has identified control failures – lamentable ones, appalling ones – and anything that was detected, anything any of those control failures that were identified are either being dealt with or have been dealt with now.”

Dunedin City Councillor Lee Vandervis said he tried to blow the whistle on the scam years ago.

“Most of the issues in the Deloitte report had been known about for many years. Certainly as far back as 2011 and nothing was done about it.”

Dunedin Mayoral Profile – Pete George

A profile done by the Otago Daily Times.

What do you know about the 2013 mayoral candidates? Council reporter Debbie Porteous puts the questions to Pete George.

Software consultant Pete George says he will give every person in Dunedin a much better opportunity to be effectively heard in council, with substantially improved communications and methods of engagement, online and via public meetings.

Why are you standing?

Because I believe I can be a better mayor than what we have got. The DCC survey that just came out showed satisfaction with mayor and council was down eight [points] to 33%. The public are saying something and I decided I’d put myself up to offer them an alternative.

What is your vision for the city?

My key vision goes back to my main policy plank – to be a much better engaged city, between the council and the people of the city.

What are the major issues facing Dunedin?

Everyone’s talking about economic development, I’m certainly strong on that, but one thing I’m also talking about that’s different from everyone else is increasing transparency, increasing communication, increasing engagement with the public. The council has to deliver information far better than it does. They’ve made some moves towards it, but there’s a lot of things that aren’t being put out there yet. There’s a lot of things the mayor and councillors are doing that aren’t published, they are doing it on their own, without it being in the public domain.

Like what?

The cat committee, the warrant of fitness rental housing. On both of those, I’ve talked to councillors who knew nothing about them. Another good example from last year was the fracking political statement. The first I heard about it was in the ODT, and it is still not on the website. Whether you are for or against it, it’s very, very poor transparency.

There’s plenty of examples. The more I look, the more I see. Information needs to get out to the public far more quickly and transparently. From the people’s side, the people’s panel, which I’ve been a part of since it was set up, is a good step, but it’s very council-centric, with the council asking people what it wants to know about its questions. What we should have is a people’s panel where the people actually can control the questions and put them to the council, so people can communicate back to the council far better. The idea is to use social media extensively, but also public meetings.

For example, the [University of Otago] Centre for Theology and Social Issues has been having some really good public discussions. Those things should feed back to the council. Where it’s justified, there should be polling of the public on issues, too. The problem we have now is things are often driven by small-interest groups that speak the loudest, that put the most submissions in, that know how to use the system. The council portrays that as public opinion, but it’s actually minority opinion that might not represent what the wider public opinion is.

How would you get more people to become part of council processes?

Council should put everything on its website. There’s a lot of things they don’t put on their website. There’s things I look for that I can’t find and would expect to be able to. I don’t think a lot of money would need to be spent. It’s just a chance of attitude and change in the way they deliver information. It’s very easy to put everything online – businesses are doing it all over the place. There’s a lot of tools readily available.

Unless you give people the opportunity to engage more, you won’t know how it will work. There is no use saying: ‘They’re apathetic; we won’t bother trying’. They need to have a means of feeling like they are being listened to. If the information is available and they choose not to do anything, no excuses. A lot of the information will be boring, and not all of it will blow up into a big issue.

The sooner you get all the balanced information out there, the more effective it can be. The longer it takes to get that information out there, the longer it takes to effect what has already been put in motion.

So, as quick as possible and with modern social media, and working with other media.

What are the other issues for the council?

On economic development, council should be vigilant for opportunities and be quick off the mark, as I was recently when I proposed a consortium approach to getting as much of the IRD IT upgrade business for Dunedin as possible. The Economic Development Unit say they are now working on this.

Council blocking of initiatives also needs to be addressed, like the Caversham-Chain Hills rail tunnel trail that has been interfered with for eight years. If opened, this would be great for commuters and recreational cyclists, and it could be huge for tourism, effectively extending the [Otago] Central Rail Trail to Aramoana and Portobello.

An issue coming out is the Greater Dunedin versus the rest thing. What we are potentially faced with a group that don’t like to call themselves a party, but they look and act like a party. We could get situation where we have one group with the mayor and potentially eight councillors on council.

And, if the voters want that, that’s fine, but they should be aware of what they are voting for, and what the possibilities are there. And what I’ve noticed more and more, is there is a strong green leaning in that group. There are several things the mayor is working on that are basically green policies, for example the warrant of fitness for homes and the living wage.

What are your politics then?

I’m a member of the United Future party. I ran unsuccessfully at the last general election.

How will that influence you on council?

I joined them and they asked me to stand because of the work I was doing in 2011 on promoting local representation and they saw that and said: ‘That fits with us; will you stand?’, so that’s why I joined them.

Since then, I have been able to meet a lot of people in politics. I’ve got good connections in different parties, I think that will very valuable to council’s lobbying.

Are people voting for you, voting for United Future’s policies then?

No, that’s got nothing to do with it.

I hope we can get what we can get working here with public engagement and push that through to the party, to all parties.

What would be your strengths as a leader?

As mayor I will be a stronger voice for Dunedin, and provide a stronger voice in council for the people of Dunedin. Stronger voice. People’s choice. I will be an impartial mayor without council baggage and without favour for any special interest or activist groups. I’ve also got very well developed financial skills, as well as people and problem-solving skills through my work.

How much will spend on your campaign?

Several thousand dollars. My campaign spending has been smart, innovative and frugal, an approach I will taken into council.

How are you funding it?

My wife and I are funding it.

What community involvement have you had?

I’ve been involved in trying to find ways to get the ratepayers’ association back in action. There is something in place that is on hold until after the election. I’ve been involved in anti-violence and anti-child abuse campaigning in Dunedin and nationally.

How many council and committee meetings have you sat in on in past few years?

None. I’ve been following it in the media. The timing of that is not suitable for someone who works during the day. There has to be more engagement at different times, evenings.

Who are your supporters?

People that want to see more public voice, who want to see council held to account more. I have support from several councillors, but it’s more ordinary-people support and online support. I’m getting thousands of views a day on some of the things I’m doing at the moment.

‘Living wage’ and Dunedin City Council

I have been having a debate on the so called ‘living wage’ in the Dunedin mayoralty campaign after the incumbent mayor announced at a forum that he was advising the DCC CEO to implement a ‘living wage’ – although he said he didn’t know how much it was set at!

I have particular concerns about this being done without consulting the elected council, interested parties like the Chamber of Commerce or the public.

I requested information from the council and they have responded – detailed here: DCC acting CEO responds on ‘living wage’

I have also posted my thoughts on it, and I’ll repeat that here.

My thoughts on a ‘living wage’ at DCC

The council’s primary responsibility is to it’s ratepayers and all the people of the city. Many people have concerns about increasing costs and rates, including me.

DCC should also be a responsible employer and pay it’s employees a fair wage for the work done.

I think a one size fits all ‘living wage’  is the wrong approach. The DCC as employer should have flexibility.

If a minimum wage is set too high it can make it much harder for people, especially young people and lower skilled people, to get their first job.

Often I hear people talking of  ‘the good old days’ when we had virtually full employment and it was easy to leave school and walk straight into a job.

I started my first career job in 1973, as a trainee telephone technician with NZPO. I started on $1.00 an hour, $2080 a year. If I completed training I would have doubled that to about $4000.

There was a normal expectation to start low and work your way up.

Expecting everyone to start work on a comfortable living wage raises expectations beyond what real life delivers, and can raise costs above what employers can afford – which means they will employ less people, or no people.

I think the biggest emphasis needs to be on having more jobs, so more people can get off a benefit and earn their own income.

Then we can look at improving skills, increasing experience and improving wage rates.

Just throwing a blanket of money at problems doesn’t solve them – it often has unintended consequences and can create bigger problems – job losses and inflation being major concerns.

I’d love for everyone to live comfortably, happily, safely and healthily. I’ll do what I can to get closer to that ideal. But it’s not something that can be simply fixed by rating and taxing more and artificially forcing up wage rates.

And paramount in a DCC context is that any application of based emotionally charged ideology should be accompanied by wide and robust consultation and discussion.

It is not a decision for the mayor to promote on his own.