SFO lays corruption charges in ACC investigation

SFO lays corruption charges in ACC investigation

The Serious Fraud Office (SFO) today announced that it had laid eight charges against Malcolm David Mason and another individual (whose name is suppressed), relating to a series of corrupt property transaction involving the Accident Compensation Corporation (ACC).

Chief Executive, Adam Feeley, said that the charges, under the Crimes Act and Secret Commissions Act, were the end result of an exhaustive inquiry into numerous property development and leasing arrangements involving the ACC over a two and a half year period.

“This has been the one of the most serious investigations into allegations of bribery and corruption cases in New Zealand in many years. It is a timely reminder that despite a global reputation for being the least corrupt country in the world, there are constant and very real threats to that reputation.”

Mr Feeley said that the SFO’s investigations had extended wider than the persons and transactions that were the subject of the charges laid, but that, on the advice of the Wellington Crown Solicitor, there were insufficient grounds for any further action.

“There have been wider, and serious, issues raised by this investigation; including procurement processes in the public sector; the process for referring corruption allegations to law enforcement agencies, and the scope of New Zealand’s bribery laws.”

Mr Feeley said that the SFO had briefed a number of Government agencies regarding these issues, including the Office of the Auditor General, the State Services Commission and the Ministry of Justice. He said that the SFO expected there would be further discussions with these agencies following the completion of their investigations. 

Mr Mason and another individual were remanded without plea until 14 December 2010.

For further information

Adam Feeley
Chief Executive
Serious Fraud Office
Phone 021 333 539

Note to editors

1. Case summary

Malcolm David Mason is a 50 year old male who had worked at ACC for a period of 32 years. At the relevant time he was the ACC’s National Property Manager. In that role he had responsibility for the procurement of premises for the use of ACC, tendering for the suitable development of such premises and negotiating lease terms between ACC and the landlords of such premises.

The charges laid relate to property transactions entered into by ACC, and also the provision of ACC information by Mr Mason to a third party.

2. Bribery and corruption offences

Crimes Act 1961:

Section 99 - Interpretation
 
“bribe” means any money, valuable consideration, office, or employment, or any benefit, whether direct or indirect

“official” means any person in the service of Her Majesty in right of New Zealand (whether that service is honorary or not, and whether it is within or outside New Zealand), or any member or employee of any local authority or public body, or any person employed in the education service within the meaning of the State Sector Act 1988.

Section 105 - Corruption and bribery of official

(1) Every official is liable to imprisonment for a term not exceeding 7 years who, whether within New Zealand or elsewhere, corruptly accepts or obtains, or agrees or offers to accept or attempts to obtain, any bribe for himself or any other person in respect of any act done or omitted, or to be done or omitted, by him in his official capacity.

(2) Every one is liable to imprisonment for a term not exceeding 7 years who corruptly gives or offers or agrees to give any bribe to any person with intent to influence any official in respect of any act or omission by him in his official capacity.

Section 105A - Corrupt use of official information

Every official is liable to imprisonment for a term not exceeding 7 years who, whether within New Zealand or elsewhere, corruptly uses or discloses any information, acquired by him in his official capacity, to obtain, directly or indirectly, an advantage or a pecuniary gain for himself or any other person.

Secret Commissions Act 1910

Section 3 - Gifts to agent without consent of principal an offence

(1) Every person is guilty of an offence who corruptly gives, or agrees or offers to give, to any agent any gift or other consideration as an inducement or reward for doing or forbearing to do, or for having done or forborne to do, any act in relation to the principal's affairs or business (whether such act is within the scope of the agent's authority or the course of his employment as agent or not), or for showing or having shown favour or disfavour to any person in relation to the principal's affairs or business.

(2) Any gift or other consideration given or offered or agreed to be given to any parent, husband, wife, civil union partner, de facto partner, or child of any agent, or to his partner, clerk, or servant, or (at the agent's request or suggestion) to any other person, shall be deemed for the purposes of this section to have been given or offered or agreed to be given to the agent.

Section 4 - Acceptance of such gifts by agent an offence

(1) Every agent is guilty of an offence who corruptly accepts or obtains, or agrees or offers to accept or attempts to obtain, or solicits from any person, for himself or for any other person, any gift or other consideration as an inducement or reward for doing or forbearing to do, or for having done or forborne to do, any act in relation to the principal's affairs or business (whether such act is within the scope of the agent's authority or the course of his employment as agent or not), or for showing or having shown favour or disfavour to any person in relation to the principal's affairs or business.

(2) Every agent who diverts, obstructs, or interferes with the proper course of the affairs or business of his principal, or fails to use due diligence in the prosecution of such affairs or business, with intent to obtain for himself or for any other person any gift or other consideration from any person interested in such affairs or business, shall be deemed to have corruptly solicited a consideration within the meaning of this section.
The offences each carry a maximum penalty of two years imprisonment or a maximum fine of $1,000.

3. Bribery and Corruption

a. United Nations Convention against Corruption

New Zealand is a signatory to the UN Convention Against Corruption (UNCAC) which came into force in December 2005.

UNCAC requires member states to develop effective measures against corruption at both the domestic and international levels, including prevention; criminal sanctions and recovery of criminal assets.

Refer: http://www.unodc.org/unodc/en/treaties/CAC/index.html(external link)

b. OECD Convention on Combating Bribery

UNCAC is complemented by the OECD Anti-Bribery Convention which requires member states to criminalise bribery of public officials.

Refer: http://www.oecd.org/department/0,3355,en_2649_34859_1_1_1_1_1,00.html(external link)

New Zealand is compliant with most of the provisions of UNCAC due in part to our full compliance with the OECD Anti-Bribery Convention. However, there are parts of the Convention which need to be made part of our law.

Refer Ministry of Justice policy work on bribery and corruption:  http://www.justice.govt.nz/policy-and-consultation/crime/bribery-and-corruption(external link)

The Ministry of Justice is currently working on the necessary steps to bring New Zealand into full compliance with this important treaty. These include:

• defining "business" as including "international aid"
• creating a new criminal offence of the acceptance or solicitation of a bribe by a foreign public official
• creating a new criminal offence where a person solicits or accepts a bribe to use his or her real or supposed influence to influence an official
• increasing the penalty for committing an offence under the Secret Commissions Act 1910
• listing the Convention in the Mutual Assistance in Criminal Matters Act 1992.

Ratification and compliance with the Convention will be an important step in maintaining our international reputation as being free of corruption, supporting international efforts to combat corruption in all its forms, and strengthening our anti-bribery laws.

4. Role of SFO in bribery and corruption

The Serious Fraud Office (SFO) was originally established in 1990 under the Serious Fraud Act in response to the collapse of financial markets in New Zealand at that time.

The SFO now operates three investigative teams:

• Fraud Detection & Intelligence;
• Financial Markets & Corporate Fraud; and
• Fraud & Corruption.

The SFO has a Letter of Agreement with the NZ Police under which the SFO is the lead referral agency for matters involving bribery and corruption. Under the terms of the Agreement the two agencies jointly review matters referred to SFO to determine the most appropriate agency to investigate allegations of bribery and corruption.

The SFO’s Statement of Intent 2010-2012 sets out the SFO’s three year strategy and goals for contributing towards the Government’s Justice and Economic Development goals. It is available online at: www.sfo.gov.nz(external link)