“They offered to pay money”

The Independent Commission Against Corruption (ICAC) has spent two days hearing evidence about Michael Chau – the Strathfield Council employee accused of soliciting a $10,000 bribe.

Chau, the council’s manager of community services, is accused of soliciting the payment from Tenix Solutions, one of two companies with Vehicle Monitoring Systems (VMS) tendering to install a camera surveillance system, known as PICS designed to curb illegal parking around the town square.

The alleged incident occurred during a meeting between Chau, Phillip Armstrong, the NSW development manager of Tenix Solutions and Saxon Hill, the managing director of VMS, at Gloria Jean’s Café in Strathfield on 3 September 2010.

Armstrong told the hearing that Chau had raised the possibility of Tenix making a $10,000 contribution while Saxon Hill had gone to pay for the coffees – Armstrong alleges Chau said the money was to help fund a Liberal Party candidate in a council by-election.

The hearing was told that at that time no Liberal Party candidate had been selected to stand in the by-election and that Helen McLucas, who later won the seat for the Liberals, denies “any knowledge of or association with” Chau.

Armstrong told the enquiry that he was “surprised and embarrassed” by the request for a $10,000 donation, and later reported the conversation with Chau to his superiors, who alerted Strathfield Council. Council immediately referred the matter to ICAC for further investigation.

“At the time I wasn’t sure whether it was naivety or something more sinister,” Armstrong said.

The enquiry also heard that later that day Chau emailed to Strathfield Council’s general manager David Backhouse a draft report supporting PICS and suggesting Tenix should get 35 per cent of any income generated by parking fines.

“That report had in fact been drafted by Mr Chau on 1 September 2010 – that is before the 3 September meeting,” said Jason Downing, counsel assisting the ICAC commissioner.

Chau, a qualified solicitor, migration agent and taxi driver, denied the allegation that he had solicited a $10,000 payment from Tenix, claiming the matter of a contribution had been raised by Armstrong at the September 3 meeting.

He told the inquiry that the money was intended for Scott Farlow, a former Liberal mayor of Strathfield, then acting as a media relations advisor and lobbyist for Tenix Solutions.

“He [Armstong] said ‘…yeah, Scott told me there is a problem in council’.  I say, ‘yeah, they’re having a by-election’,” Chau told the hearing. “And he say, ‘how much does it cost?’ I say ‘it’s going to cost a lot of money’.

“I said $10,000, and I said, ‘well, you can make a contribution, a donation if you like’. And he said, ‘how do I go about that? And I said you are a friend of Scott aren’t you?’ I said ‘you can give it to Scott or you can give it to me….and that was it, end of discussion.”

Under cross-examination Chau admitted that he had no knowledge of political campaigning and no connection with the Liberal Party, and had simply plucked the figure of $10,000 out of the air.

“I just, you know, thought of a figure,” he said. “I just made it up.”

Chau told the inquiry that he had not reported the incident to his line manager because no money had changed hands. He said that while he was aware of the council’s ethical conduct rules, which cover such incidents, he had never read them.

ICAC will accept further legal submissions until 11 February. A final determination on the investigation is expected in six to eight weeks.


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