Former Willoughby Council inspector found corrupt

Wednesday 22 June 2011

The Independent Commission Against Corruption (ICAC) has found that former Willoughby City Council building inspector and development officer, Edward Karkowski, engaged in corrupt conduct by exploiting his official functions to favour various business owners in the Chatswood area in return for cash, gifts, free meals, and free massages and sexual services.

In its report on the Investigation into the corrupt conduct of a Willoughby City Council officer, released today, the Commission found that Mr Karkowski engaged in corrupt conduct on numerous occasions and in various ways.

These included failing to report to the Council that the Oriana Bath House was illegally operating as a brothel, because he was receiving free sexual services there, and advising applicants to submit false construction cost estimates in development applications, so that fees payable to the Council would be reduced, in return for free hospitality. Mr Karkowski also dishonestly submitted claims for overtime and accepted payment for those claims.

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 prosecuting Mr Karkowski for various criminal offences. The Council dismissed Mr Karkowski as a result of the Commission's investigation, so it is not necessary to make any recommendation in relation to disciplinary action.

During the investigation, the Commission found that there were several factors that allowed Mr Karkowski to engage in corrupt conduct. Council and Mr Karkowski's superiors placed a great deal of trust in him; he was allowed to exercise wide discretionary powers in relation to the assessment and approval of applications with little or no effective supervision. The Commission found that other factors included lack of information to Council staff to enable them to accurately estimate the cost of construction work, and the practice at the Council for staff to accept gifts, benefits and hospitality.

The ICAC has therefore made seven corruption prevention recommendations including that the Council improves the supervision and monitoring of staff in the Environmental Services Division with powers and responsibilities under the Environmental Planning and Assessment Act 1979 to help reduce opportunities for corrupt conduct to occur.

Specific measures to achieve this should include establishing systems to reduce end-to-end control of regulatory approvals by a single council officer, and reviewing the current organisational structure to ensure managers are able to effectively supervise the work of staff reporting to them and are involved in the reviewing and auditing of work completed by staff.

Other recommendations include: that the NSW Department of Planning and Infrastructure prepares and makes public guidelines that specify which activities and work associated with a development are to be used by planning authorities when calculating the estimated costs of works; and that the Council implements changes to its Code of Conduct that establish, as a minimum, a prohibition on Council staff and officials who exercise regulatory functions from accepting any gift, benefit or hospitality irrespective of its value.

The Commission held a public inquiry, as part of the investigation, over four days commencing on 7 March 2011. Commissioner the Hon David Ipp AO QC presided at the public inquiry, at which 11 witnesses gave evidence.

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

Fact sheet

Investigation report