'No reasonable suspicion of corrupt conduct' found over acquisition of boat and bicycle hire businesses on the lake

The ACT Integrity Commission has drawn a line under corrupt conduct claims circulating about the City to Lake Project for almost five years.

A previous report has already been completed into the land acquisition of blocks adjacent to Glebe Park in Canberra City. The second tranche of the investigation was into the acquisition and leasing activities of boat and bicycle hire businesses along the Lake Burley Griffin foreshore.

A corruption complaint had been made by former Canberra Liberals MLA Vicki Dunne in 2019 after a committee inquiry report recommended an investigation be held into the now-defunct Land Development Agency’s (LDA) land purchases for the project.

The Auditor-General has also criticised the 2015 Glebe Park land deal.

This new report dealt with acquiring three hire businesses and leases in Acton – Mr Spokes Bike Hire, Dobel Boat Hire and Lake Burley Griffin Boat Hire (also referred to as the West Basin acquisitions or properties).

The Integrity Commission found “no reasonable suspicion of corrupt conduct” by any ACT public servants over these acquisitions either.

One issue the Auditor-General originally had when investigating the acquisitions was an absence of relevant and potentially significant documents.

The Integrity Commission found that while the Auditor-General had “rightly” been critical of this, a lack of documentation doesn’t necessarily mean corrupt conduct has occurred.

“In some circumstances, a failure to create or maintain appropriate records might well qualify as corrupt conduct for the purposes of the [law],” the report noted.

“In the present case, the evidence … when considered as a whole, provides an adequate basis for explaining the impugned transactions for present purposes and does not raise a reasonable suspicion of corruption.”

Questions had been raised about public servants’ understanding of the Lands Acquisition Act, under which compulsory acquisition can occur.

This was because the land on which the businesses sat was primarily going to go to a private developer, not to be utilised for a public purpose within the meaning of the Act.

However, the ACT Government had been advised the acquisition of the West Basin leases would “most likely” represent a public purpose.

All the acquisitions proceeded through commercial agreement, but the possibility of compulsory acquisition had been floated with some of the business owners.

A government brief from 2014 stated this “sends a clear signal there would exist a point in time beyond which a more prescriptive (and less generous) process could be pursued.”

The LDA made preparations for a compulsory acquisition process in parallel with commercial negotiations, as the government wanted the land secured within a specific timeframe.

The Integrity Commission found while the responsible officials didn’t have an “adequate” or “appropriate” level of understanding about certain aspects of the law, there was no suggestion the decision of officials to undergo negotiations for the businesses outside of this was “improper”.

“There is no basis for concluding the problems that arose in negotiating the West Basin acquisitions would have likely been avoided had the decision been otherwise,” the report noted.

“No probity issues reasonably arise from the fact that the negotiations for the purchase of the West Basin properties did not utilise or reflect the process provided by the Acquisition Act.”

The owners of Mr Spokes Bike Hire settled for $1.1 million in compensation, Dobel Boat Hire received $1 million for its lease, and Lake Burley Griffin Boat Hire received just over $600,000.

After months of negotiations, compensation was agreed to, which the Integrity Commissioner noted “significantly exceeded” market values advised by valuers, which was a “commercial” decision.

“On its face, [this comment] appears to reflect the definition of ‘value for money’ in the Procurement Act as being ‘the best available procurement outcome’,” the report noted.

“It was undoubtedly a serious failure of the probity of the process that there appears to be no documentation of the reasoning behind the amounts ultimately offered to the West Basin owners.

“[But] the sequence of events and the history and context of the transactions provide strong objective support for the conclusion that value for money was indeed achieved.”

There had also been questions raised over more than $2.6 million in payments to consultants without competitive quotes to a firm that had ties to the former City to Lake project director.

No reasonable corrupt conduct had been found there either.

Further Integrity Commission investigation into the matter has been discontinued.