Shock as Melbourne City Council boss quits

An internal probe into former City of Melbourne chief executive Justin Hanney has found he should have declared anonymous donations raised for a yacht race.

Melbourne City Council chief executive Justin Hanney has sensationally quit. Picture: Aaron Francis

An internal probe into former City of Melbourne chief executive Justin Hanney has finished up, finding that he should have declared anonymous donations raised for a yacht race.

The council found he did not intentionally keep the money from his disclosures but has referred the matter to the Chief Municipal Inspector.

An investigation was first triggered after the Herald Sun revealed Mr Hanney had set up a website for donations to fund his participation in the Sydney to Hobart Yacht Race, including anonymous donations of $9000 and $4500.

Since then, Mr Hanney has resigned from his position although he said the internal review did not find he had behaved inappropriately.

Nick Foa, a senior bureaucrat at the Department of Transport who co-owned the boat, also resigned after an internal review.

A council spokesman said the independent review had been led by Judie Munro, AM.

“The Committee’s review has been thorough and conducted in line with the principles of procedural fairness and natural justice – and Mr Hanney has had the opportunity to review and respond to its draft report.”

The council found that the “donations should have been declared as part of City of Melbourne’s personal interests return process”.

But it did not find evidence to suggest he had “intentionally or recklessly” lodged incorrect returns.

The council will refer the incident to the Chief Municipal Inspector and ask Local Government Victoria for stronger guidelines regarding personal interests for chief executives to address these issues.

The council is also reviewing it’s rules for gifts and declarations.

Lord Mayor Sally Capp said:

“We’’re focused on delivering for the community and welcoming huge crowds to the city this spring.

“This is an opportunity for us to strengthen and improve our existing policies – and ensure the rules are clear for all employees.”

This week it was revealed Hanney will leave his role sooner than originally planned.

When announcing his resignation, Mr Hanney said he had intended to stay on until the end of the year to assist with the handover of his role to a new person.

But a council spokesman said this plan had changed and he would leave the role on Wednesday.

“At the time of his resignation, Justin generously offered to work until the end of the year to allow for an orderly transition of leadership,” he said.

“After working through transition arrangements this week, (the) council has decided to move forward and appoint Alison Leighton as Acting CEO effective from today – so the organisation has stability to continue its momentum, deliver for the community and lead Melbourne’s revitalisation.

“A number of significant projects require consistent leadership and decision-making over the coming months to set the organisation up to deliver for Melburnians in 2023, and it was determined that the transition should begin this week.”

“The Lord Mayor and Councillors thank Justin Hanney for his significant contribution as CEO since 2019 and wish him all the best for the future.”

Last week, Mr Hanney announced his resignation after nearly four years in the job.

Mr Hanney, a former senior executive in the state government, has been praised for steering the council through the pandemic.

His exit comes amid scrutiny over an undisclosed donation he received earlier this year.

Mr Hanney announced his resignation – orginally slated for December – to staff in an email sent out after 4.30pm on Wednesday.

Lord Mayor of Melbourne Sally Capp praised Mr Hanney as a ‘champion of the municipality’. Picture: Tim Carrafa

In July, the Herald Sun revealed that Mr Hanney had created a crowd-funding page to cover costs for a yacht owned by himself and former state Transport Department executive Nick Foa to sail in the Sydney to Hobart race.

The council’s CEO employment matters committee has been reviewing a donation Mr Hanney received through the Australian Sports Foundation charity.

In a statement, the council said it had not identified any decisions that were influenced by the donation, but recommended a need for greater clarity, and improvements to council’s personal interest declaration process.

Mr Hanney said the committee’s report was yet to be finalised, but there was no suggestion of inappropriate decision making.

“As I have previously acknowledged, I should have nominated the Australian Sports Foundation donation as part of my personal interest declaration process, and this was an oversight,” he said.

Mr Hanney, who will remain CEO until late December to allow for an orderly transition, thanked Lord Mayor Sally Capp and councillors for the opportunity to “lead this great organisation”.

“There are many things that I am proud of, but in particular I acknowledge our collective response to the pandemic, and giving Melburnians confidence through one of the greatest challenges we will see in our lifetime,” he said.

Ms Capp said Mr Hanney was a dedicated champion of the municipality who had worked tirelessly to improve the lives of residents and business owners.

“Justin has transformed the culture at the City of Melbourne, strengthening its focus on performance and achievement, and this will be one of his legacies,” she said.

“Melbourne is a marvellous city, which is bouncing back following some of its toughest times, and Justin’s outstanding leadership has contributed to this.”

Victorian Chamber of Commerce and Industry chief executive Paul Guerra said Mr Hanney’s leadership and contribution had been significant through the pandemic.

“He has driven initiatives like business grants, and established the business concierge, which enabled business to access support quickly, and had a meaningful and direct impact on business survival,” he said.

“He has been active with the business community to get things done, and he will be missed.”

Salvation Army Project 614 director Major Brendan Nottle said Mr Hanney had been personally committed to ending homelessness in the city.

“Whenever I call with an issue – big or small – Justin always finds a solution,” he said.

“Justin’s personal integrity is beyond reproach. His departure is a huge loss for the city.”

Mr Hanney was appointed in January 2019, and recently was given a four-year extension to his contract.

His previous roles have included lead deputy secretary Economic Development, Employment and Innovation at the Department of Jobs, Precincts and Regions.