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Three more in CERA conflict probe

NZ Newswire logoNZ Newswire 11/04/2017

Three more names have been put forward for investigation by two former Canterbury Earthquake Recovery Authority employees referred to the Serious Fraud Office.

Gerard Gallagher and Simon Nikoloff, along with Murray Cleverley were investigated by Solicitor-General Michael Heron, QC.

Mr Heron found Mr Gallagher and Mr Nikoloff had committed serious misconduct in relation to claims they set up a private company to take part in a property deal they also had a hand in from the other side of the table as CERA government staffers.

Mr Heron said after the release of his findings on Tuesday that the parties dealing with the pair over a property in Christchurch's Manchester Street believed they were dealing with CERA employees.

On Wednesday morning, Andrew Kibblewhite, the head of the Department of Prime Minister and Cabinet, told parliament's finance and expenditure select committee that three more names had been brought to their attention following allegations made against Mr Gallagher and Mr Nikoloff.

"There have basically been some suggestions that have been put up by the individuals who have proven to have acted inappropriately," Mr Kibblewhite said outside the committee.

"We are looking at specific allegations that have been raised. If they lay down tracks that we need to follow further, that's absolutely what we'll do."

He expects the investigation to be done in just weeks.

Christchurch Regeneration Minister Gerry Brownlee said he was not aware of the specific allegations made by Mr Gallagher and Mr Nikoloff against the three other men.

"I think Mr Heron would have outlined them a little more strongly in his report had there been greater concern on his part. He's right to highlight it and we're right to investigate it," he said.

Mr Brownlee doesn't believe there needs to be a wider investigation.

But Labour and NZ First MPs quizzing Mr Kibblewhite in the committee room questioned whether a wider investigation of a possible failure of conflict of interest policies could uncover more allegations of wrongdoing.

Labour MP Megan Woods suggested there was a "sloppy culture" within CERA regarding conflict rules, but Mr Kibblewhite rejected those assertions.

He said there was a policy that all employees had to register conflicts of interests and update that register but that Mr Gallagher and Mr Nikoloff didn't comply.

They claim any fault in their action rests with poor advice given by their bosses, who did not advise them of possible conflicts of interest.

"We trusted (relied on) the people around us to provide the necessary advice," they have said.

"They chose not to advise us there was a potential conflict. We acknowledge we should have declared what we were doing in writing."

The State Services Commission said Mr Cleverly was not involved in the other two men's business operations but should have shown better care and judgement.

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