ICAC finds Strathfield Council manager corrupt

Thursday 12 May 2011

The Independent Commission Against Corruption (ICAC) has found that Strathfield Municipal Council Community Services Manager, Michael Chau, engaged in corrupt conduct by soliciting $10,000 from the Business Development Manager of a company which was negotiating a business proposal with the Council.

In its report on the Investigation into the solicitation of a corrupt payment by a Strathfield Municipal Council officer, released today, the Commission recommends that consideration should be given to obtaining the advice of the Director of Public Prosecutions (DPP) with respect to prosecuting Mr Chau for an offence of soliciting a corrupt payment.

The ICAC also recommends that consideration be given to the taking of action against Mr Chau as a public official with a view to dismissing, dispensing with or otherwise terminating his services.

The report says that in August 2010, Tenix Solutions' NSW Business Development Manager, Phillip Armstrong, and Vehicle Monitoring Services (VMS) Pty Ltd's Managing Director, Saxon Hill, gave a presentation to the Council's General Manager, David Backhouse, Mr Chau and other Council officers. The companies hoped that the Council would agree to install their Parking Infringement Camera System (PICS) in areas around Strathfield where the Council had experienced parking infringement problems.

Mr Chau later met with Mr Armstrong and Mr Hill on 27 August and 3 September, without Mr Backhouse's knowledge, and he falsely represented that he had been authorised by the Council to act on its behalf to promote the Council's adoption of the PICS technology. During the same period, Mr Chau made various statements to Mr Armstrong intended to make him believe that he (Mr Chau) was acting in a way that was favourable to Mr Armstrong, Tenix and VMS in relation to the Council's consideration of their business proposal.

Mr Armstrong alleged that at the meeting on 3 September, Mr Chau asked him for a $10,000 payment to cover the costs of an unnamed Liberal Party of Australia candidate standing at an upcoming Council by-election.

The Commission found that Mr Chau's purported favour to Mr Armstrong about the business proposal was intended to form the basis upon which Mr Chau could solicit a payment from him. The Commission is satisfied that Mr Armstrong was a truthful witness and that Mr Chau sought the payment for his own benefit; as at 3 September 2010 Mr Chau had no affiliation with the Liberal Party and no Liberal Party candidate had yet been selected to stand.

Around that time, Mr Chau had also argued for leniency in a document he provided to a professional disciplinary tribunal on that basis that he had debts of approximately $10,000 made up of credit card debt and legal expenses. In the Commission's view, this evidence also supports a conclusion that Mr Chau sought a payment in this amount from Mr Armstrong for his personal use.

The Commission held a public inquiry, as part of the investigation, over two days commencing on 1 February 2011. Assistant Commissioner Theresa Hamilton presided at the public inquiry, at which six witnesses gave evidence.

Fact sheet

Investigation report