Nepotism, wasted money and potential corruption: Liverpool Council on the brink

Liverpool Council is on the brink of suspension following an explosive report that accuses it of potential corruption, wasting public money and a “frequent and repetitive pattern” of hiring family and associates of senior staff to lucrative jobs without proper processes.

As well as painting a picture of a council riddled with nepotism, a scathing Office of Local Government report alleged that councillors and Liberal Mayor Ned Mannoun had inappropriately lobbied staff on development and compliance matters.

The Minister for Local Government, Ron Hoenig, moved to suspend the council and announced a public inquiry due to serious concerns about potential corruption, appointments of highly paid staff without a competitive process and interference by elected representatives in planning matters.

“There were a number of other matters it uncovered as part of the investigation which were not part of the terms of reference … but relates specifically to questions of maladministration and corruption, of which will be examined by the public inquiry,” Hoenig said.

Liverpool Mayor Ned Mannoun speaks on Thursday after Minister Ron Hoenig announced a public inquiry into the council.Credit: Dion Georgopoulos

In some cases, staff who complained about poor decision-making were labelled “troublesome” and forced out with payouts and requests to sign non-disclosure agreements, the interim report found.

Major projects related to the Aerotropolis precinct and large housing developments at Austral, Leppington and Bringelly were being jeopardised by the council’s dysfunction, the report said.

Staff members reported a “‘toxic culture’ within the council, where bullying, intimidation and sexual harassment occurred without such matters being appropriately addressed in a timely manner”.

A defiant Mayor Ned Mannoun said he welcomed the prospect of a public inquiry into the council, claiming the “purely political” report had been handed down by a “Labor minister in a Labor government”, foreshadowing a potential legal challenge to the looming suspension.

Mannoun denied he was interfering in development applications, claiming instead he was representing the community on planning matters.

“Us asking questions about why things are taking so long or are people being treated badly is not an issue,” he said. “It happens every single day, every councillor, every mayor does it.”

He said the report appeared to be “a shopping list of unfounded allegations by unknown people who may hold a grudge against me and the council”.

The report raised serious concerns about the recruitment process for senior positions and their remuneration packages that one witness described as being “unorthodox and problematic”.

Friends, relatives and political associates of senior council staff appear to have been given the inside running on a number of senior positions, according to the report.

It found concerns about inappropriate recruitment in at least four of the council’s six internal divisions as well as in relation to the role of chief executive, senior adviser roles, and senior jobs in planning, government relations and communications.

One of those recruited was Betty Boustani, who was Mannoun’s solicitor before he was re-elected to council in 2021.

Betty Boustani is a senior adviser who works out of Mayor Ned Mannoun’s office.Credit: Mason Parkes website

Boustani is currently a senior adviser to Mannoun and works out of his office despite the council’s legal affairs already being handled by a general counsel.

Boustani’s $250,000-a-year salary “was set by a directive from the CEO Mr [John] Ajaka, without market testing, merit-based recruitment processes, or consideration of other candidates for the role”, investigators found.

In the curriculum vitae she provided to the council, Boustani claimed that she had ceased her partnership in Liverpool law firm Mason Parkes in 2022. However, Boustani continued with two external legal jobs, the report said.

On the Law Society’s register of solicitors, Boustani is listed as the principal of her own firm, BBCA Legal, and features prominently in the “Meet the team” section of the Mason Parkes website. The report said that “discreet enquiries with Mason Parkes confirmed her continuing role with that law practice”.

Of concern to investigators was the chief executive’s decision to allow Boustani “to engage in secondary employment for up to three hours per week”, which they suggested might be in breach of legislation prohibiting staff from private work outside the council.

Mannoun said he stopped engaging Boustani in 2017, and she had been just one of several personal solicitors he had at any given point. Outside of alerting the council that she was looking for work, he denied having any role in her hiring, saying it was a matter for Ajaka.

The council’s current acting chief executive, Jason Breton, was also involved in a company named Bretons, which operated in the local government sector while he worked at the council, the report said.

Concerns were also raised in the report about the direct appointment of former Liberal MP Shayne Mallard in an advisory role, due to his political affiliations and pre-existing links with Ajaka. Mallard was later appointed to the permanent role of city futures director through a competitive employment process.

Shayne Mallard’s pre-existing political links raised concerns.Credit: James Alcock

“Document review and the oral evidence of witnesses have highlighted a significant number of positions, at all levels and in various directorates within the council, in which it is apparent that current and previous incumbents have been employed based on factors other than merit,” the report found.

“Such factors include the employment of undeclared family members, close associates, and politically affiliated persons.

“Staff interviewed also reported that such actions and decision-making has led to poor outcomes for council staff and the organisation, which includes the wasting of public money.”

Payouts to staff under deeds of release – not including redundancy payments – totalled more than $700,000 since April 2021, and the positions in question were subsequently filled with new staff.

The council’s corporate support director, Farooq Portelli, allegedly instructed the direct appointment of two immediate family members to positions in the council.

Farooq Portelli is a former chief executive whose relationship with Ned Mannoun soured.Credit: Robert McGrath

Portelli is a former chief executive of the council who was dismissed from his $340,000-a-year role in 2014 after relations between himself and Mannoun became “unworkable”.

Another director, Lina Kakish, also allegedly instructed that staff select a close family member who had participated in a competitive employment process, the report said.

A senior manager, Noelle Warwar, was allegedly directly involved in the selection of a close family member for a permanent position within the council.

A family member of another director, Tina Bono, was employed in Bono’s Community and Lifestyles directorate and received a $40,000 redundancy payment earlier this year.

No one in the report has been found guilty of any wrongdoing and the Herald does not suggest they have, only that they are named in the report.

“Information available to the investigators … suggested that it had not been a consistent practice for selection committee members to disclose or declare any conflicts of interest regarding recruitment that may involve a family member or ‘close associate’.”

In some cases, documents and emails had been removed from the council’s system, staff told the Office of Local Government investigators.

There was a pattern of hiring people who had links to senior council staff or who were politically affiliated with the Liberal-led council. In some cases, new roles were allegedly created to accommodate them, the report said.

Staff told investigators that the mayor made representations to the planning department on behalf of large property developers and individual owners.

“The investigators obtained multiple examples of email correspondence between the mayor and assessment staff containing such inquiries,” the report found.

Concerns about the mayor’s intervention in compliance matters were also raised by staff. This included the mayor asking that the council drop its legal action against the owners of two properties where illegal earthworks had commenced.

“The investigators obtained a number of public social media posts in which the owners of the same properties made multiple positive comments about Mayor Mannoun,” the report stated.

Ajaka, a former president of the NSW Legislative Council, was hired by Mannoun for the $537,000 per year chief executive job in December 2022. His appointment was controversial due to Mannoun’s propensity for hiring Liberal-aligned senior staff.

But equally controversial was the mayor’s decision to sack Ajaka in June. This followed a heated discussion on April 16 about the budget and staffing.

At a meeting with the mayor, the deputy mayor and the head of corporate services, Ajaka allegedly told Mannoun to “shut the f--- up”.

However, the report reveals that the council’s own investigation into Ajaka’s behaviour concluded that his comment, while unprofessional, was trivial and should have been managed so that the matter did not escalate.

This final report was not provided to the council before the meeting on 29 May, at which the mayor used his casting vote to terminate Ajaka’s employment.

“Mr Ajaka was denied procedural fairness as the decision to terminate his employment was not informed by the conduct reviewer’s findings,” the report found.

However, Ajaka did not escape criticism with the report critical of his procurement policies and decisions on remuneration packages that were contrary to staff recommendations.

Some councillors and local Labor MPs welcomed the public inquiry, which will be led by Commissioner Ross Glover, who has previously led an investigation into Wingecarribee Shire Council in the Southern Highlands.

“This interim report confirms what Liverpool residents have known for some time: that dysfunction at Liverpool City Council is widespread across the organisation and impacting its capacity to perform its basic functions for residents and ratepayers,” said Charishma Kaliyanda, a councillor and state member for Liverpool.

Mannoun returned to the council in 2021 following a previous stint as mayor from 2012–16. In July 2016, ICAC raided Mannoun’s office and home following allegations made under parliamentary privilege by Shooters and Fishers Party MP Robert Borsak.

Borsak told parliament there had been a “dramatic increase” in Liberal-aligned staff being employed outside usual council protocols since Mannoun became mayor in 2012.

“It is widely acknowledged amongst developers that if you want to get your high-rise development approved, it helps to give a unit to Ned’s father,” Borsak also told parliament.

A year later, ICAC told Mannoun it had found no evidence to support Borsak’s allegations.

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