Sartor's smart pole legacy not just pretty banners.

It's not amusing to wake up and read on the front page of the Sydney Morning Herald that the Council has just lost a major court case with potential exposure to millions in damages. This story is not about Clover Moore or this Council but a legal mess inherited by the new Council (and ratepayers) from Frank Sartor's regime.

A robust meeting belatedly called yesterday with the Lord Mayor, Councillors and legal advisors explored the background to this dispute and Council's options. Plenty of questions remain unanswered for Councillors such as why didn't we even know this was in the Federal Court or that we had an uninsured and unbudgeted exposure of potentially millions. In my view Council needs to be hands off in this matter and have an external investigation. I think Piers Akerman has a good point in today's Tele. When Piers Akerman of the Tele and Kate McClymont of the SMH merge on one issue you have to pay attention.

Time to Shine ICAC

May 09, 2006
THE Independent Commission Against Corruption (ICAC) has a lacklustre reputation at best. At worst, it's just a joke.
Federal court judge Roger Gyles AO last week provided the crimebusters with an opportunity to show whether it has the guts to investigate allegations of top-level corruption or not.
In a case known as the Goldspar affair, Judge Gyles has found the light pole manufacturer is entitled to damages from Sydney City Council, with which it had a contract to supply light poles for the 2000 Olympics.
His judgment makes interesting reading, not only for its scathing assessment of the SCC, but for the involvement of the family of NSW ALP Right's Upper House operator Eddie Obeid, through his sons Paul and Moses, and the fact the then lord mayor was Frank Sartor, now Planning Minister.
Briefly, Goldspar, operated by Mona Vale engineer and designer Doug Rawson-Harris, won a tender in May 1998 to supply between 300 and 900 of his company's Smartpoles.
Judge Gyles said almost immediately, Sydney City Council shifted ground.
A key figure in the project was Adel Khreich, who, the judge said, the SCC "purported to appoint" as the representative of the person responsible for supervising the site.
The superintendents employed in the city's project department were successively Wayne Burns, followed by Shane Henn, though the judge said "it rather appears that the day to day administration was left to Khreich, who took his instructions from (Terry)Daly".
Goldspar's representative was initially Tony Barnes, who Rawson-Harris replaced as the council began to force them out.
Judge Gyles found Burns' evidence "was generally unimpressive. His claimed recollection of events was very poor, much worse than might have been expected, even if (as I find) his true role was more limited than his title of council's representative might have implied.
"My impression when he gave his evidence was that he was not genuinely giving the best of his recollection. His express denials of the evidence in question of Barnes were in marked contrast to most of his evidence and did not ring true at the time."
He also noted that Paul and Moses Obeid had tried to buy the council contract from Goldspar as early as May 15, 1998, and though the offer was rejected, their company Streetscape sought to obtain the council's pole business from then on.
Judge Gyles also referred to evidence given by Rawson-Harris of allegations he made "of collusion between Mr Obeid (by then a NSW Govt minister) and the City of Sydney to the disadvantage of Goldspar".
In that evidence, Rawson-Harris said Goldspar had designed some items for the poles and "the council came to see the last design and then a week later the OBedes (sic) supplied those parts to the council without asking us to supply."
In addition, he said "we also received a translation of an El Telegraph article (owned by Mr Obeid) which was an interview with Mr OBede (sic) and it stated that the council wanted to get rid of us in that article".
Further, he testified "Streetscapes was formed about two or three months after they (the Obeids) had the meeting with us because we didn't want to deal with them. They had offered the pole contract for the Olympics. They said, if we did a deal with them they could guarantee the pole contract for the Olympics, the flagpole contract, that is".
Judge Gyles noted "whilst much of this evidence is hearsay, it was prescient insofar as Goldspar's fate was concerned".
The objective facts, he said, were "once Streetscape came into the picture, Goldspar only received an order for seven more poles in total instead of at least another 600 and was cut out from some of the accessories in relation to the then current period in favour of Streetscape."
"It was hardly evidence of paranoia on the part of Rawson-Harris that he should feel that Streetscape had the inside running with the council and that Goldspar was being excluded accordingly," Judge Gyles said.
The judge said he was "particularly troubled" by the role of Khreich at a meeting on September 29, 1999, saying "if he knew what was coming, then he participated in a dishonest and cynical piece of play acting.
"If he did not, then he must have been shocked by the instruction he received via (the council's Steven) Newman" which effectively reduced Goldspar's order.
"Nonetheless, he (Khreich) executed the instruction, defended it and then placed two subsequent orders which were no more reasonable and proceeded to defend them, both at the time and in evidence. Giving him the benefit of the doubt, I am inclined to think that his participation in the meeting of September 29, 1999, was an endeavour to get the supply of poles from Goldspar moving but that objective was quickly and firmly countermanded by council officers."
Judge Gyles repeatedly accused Khreich of being "disingenuous" in regard to the council's actions, including one order that "was obviously issued in order to trap Goldspar into a situation of default with termination to follow".
The judge said, "that I was not impressed by Khreich's attempts in evidence to justify the various positions taken by him, particularly after September 29, 1999. ICAC, which is wondering how to begin an investigation could do no worse than read Judge Gyles' summation and interview Khreich.
If this matter goes no further, the toothless watchdog should be put down.
akermanp@dailytelegraph.com.au

Contract with Obeid link puts council in hot water

By Kate McClymontMay 4, 2006
SYDNEY City Council faces a multimillion-dollar damages claim after losing a court battle in which allegations were raised that it gave the inside running on a contract to a company run by the sons of Eddie Obeid, the ALP powerbroker and former minister.
In March 2000 the council terminated a contract it had with Goldspar for the supply of Smartpoles - multi-function street poles that can be seen throughout Sydney's CBD. Streetscape, the company run by Mr Obeid's sons, Paul and Moses, was awarded the contract.
The then lord mayor, Frank Sartor - now a state Labor minister - was reported in the Herald at the time as saying orders had been placed with Goldspar for 300 poles but these had not been delivered.
But in a written judgement handed down yesterday, Federal Court Justice Roger Gyles said he was satisfied "Goldspar was ready, willing and able to carry out the contract as at March 2000" and there was "powerful evidence of subjective bad faith on the part of the relevant council officers". The council's behaviour was "extraordinary" and "menacing".
The judge said evidence given by Goldspar's owner, Doug Rawson-Harris, suggested "collusion between Mr Obeid (by then a minister in the NSW Government) and the City of Sydney to the disadvantage of Goldspar".
Mr Rawson-Harris's evidence was that in 1998 Mr Obeid's sons offered to buy Goldspar's contract with the council or do a joint deal. "If we did a deal with them they could guarantee the [flag]pole contract for the Olympics," Mr Rawson-Harris told the court.
Mr Rawson-Harris said he had been given an article from Mr Obeid's newspaper, El Telegraph, in which Mr Obeid was reported saying the council wanted to get rid of Goldspar.
"While much of this evidence is hearsay," noted Justice Gyles, "it was prescient insofar as Goldspar's fate was concerned."
Justice Gyles noted Mr Rawson-Harris was not being paranoid in his suspicion that "Streetscape had the inside running with the council and that Goldspar was being excluded accordingly."
Once Streetscape came into the picture, Goldspar received an order for only seven more poles instead of at least another 600, Justice Gyles said.
He criticised the council's project manager on the Smartpoles, Adel Khreich. "A person of his experience and knowledge could hardly have failed to suspect what was afoot," Justice Gyles said.
Mr Sartor, now the state Minister for Planning, is honeymooning overseas and was not available for comment yesterday.
Mr Obeid has previously denied in Parliament he knew anything about commercial discussions between his sons and Goldspar.

A contract to supply the city with flagpoles has left many questions unanswered, write Kate McClymont and Anne Davies. May 6, 2006

THE City of Sydney can be justly proud of its flagpoles. The sleek multifunctional aluminium poles which carry colourful banners, lighting and even closed circuit television cameras are being sold around the world.
But the Smartpole has had troubled history, which now could cost the City of Sydney millions. More here.