A roading contractor and a council manager have been found guilty of corruption in a case exposing what the prosecution called a "culture of corruption" amongst Auckland council staff administering tens of millions of dollars in roading contracts.
Justice Fitzgerald was delivering her verdict in the High Court at Auckland today in the long-running trial of former Auckland Transport senior manager Murray Noone and roading engineer contractor Stephen Borlase.
Noone was found guilty on six charges of receiving $1.2 million in bribes from Borlase.
Borlase, in turn, was found guilty on eight charges of offering bribes to Noone and other council staff.
Borlase was found not guilty on four charges of dishonestly using a document to allegedly inflate invoices to council.
Over the course of the eight-week trial in the Serious Fraud Office case, prosecutor Brian Dickey outlined a chain of payments going from Borlase's firm Projenz to Noone, and then from council budgets to Projenz.
Mr Dickey told the court the spread of largess by Projenz to Noone and his staff was corrosive: "The extensive provision of benefits to staff at all levels of their teams resulted in a culture where corruption flourished and was normalised, with no questions asked.
"There was very little chance of disgruntled or principled employees speaking out as everyone was being 'looked after' or was compromised.
"The culture derived from the top, at which Noone was receiving very substantial payments totalling seven figures - all to do his job," Mr Dickey said.
The court heard that, prior to Noone joining the Rodney District Council - the relationship is alleged to have continued when Noone joined Auckland Transport - Projenz was barely breaking even on revenues of $1.2 million.
Meanwhile Noone was sending regular bills to Projenz - averaging $8500 a month - which were being paid into his bank accounts.
The payments came, Mr Dickey said, "despite there being no evidence he did any of the work stated on his invoices".
The basic facts of the case - the sums paid and gifts given - was broadly uncontested by the defence.
However, lawyers for the accused argued these payments were neither corrupt nor even out of the ordinary. The flowed from a legitimate business culture based on council directives for collaboration between contractors and clients.
Borlase gave evidence and, walked through numerous receipts and invoices by his lawyer Ron Mansfield, repeatedly described lunches, contributions to travel and other expenditure on council staff as "standard industry business expenses".
Simon Lance, acting for Noone, drew attention to the evidence of Projenz co-founder John Penman who said he was happy with work provided by Noone.
Mr Penman said Projenz was a "non-bureaucratic type of organisation" where verbal reports were "far more desirable than a 50-point written report".
Mr Lance said Noone had declared all income to Inland Revenue, and though he arguably should have done more to disclose his relationship with Projenz to his employers at Auckland Transport, the prosecution case had not proven that council tender processes had been tainted.
The SFO's reliance on circumstantial evidence meant not guilty verdicts must be delivered, he said.
"Suspicion plus suspicion only ever equals suspicion. Maybe this thorough investigation, which goes for a number of years, sees suspicions raised: But that is not proof beyond reasonable doubt."
