Simon Nikoloff, far left, and Gerard Gallagher, second left, leave court with their lawyers James Rapley KC and Kathryn Dalziel, in September 2020. Photo: RNZ / Nate McKinnon
Two former public servants have been found guilty of attempting to profit from their work helping with the rebuild of Christchurch following the earthquakes.
Gerard Gallagher has been found guilty on three charges of corrupt use of official information, and Simon Nikoloff has been found guilty on one charge of corrupt use of official information, and not guilty on one charge.
The case was heard in the High Court in Christchurch.
Both men will be sentenced on 28 June.
The men were employed as investment facilitators with the Canterbury Earthquake Recovery Authority (CERA).
The Serious Fraud Office (SFO) said the pair were tasked with attracting investors to the central city, including through connecting landowners with potential purchasers and addressing any barriers to development, and later when CERA became Ōtākaro their roles included finding buyers for unused Crown land.
"The defendants were employed to help a damaged city recover and rebuild," said SFO director Karen Chang. "Instead, they abused the power they had been entrusted with and put considerable effort into furthering their own commercial interests."
Karen Chan Photo: Supplied / Serious Fraud Office
Gallagher and Nikoloff used information obtained in their official capacities to try and set up business deals which would benefit them personally. The SFO said that although ultimately unsuccessful, Nikoloff and Gallagher had an unfair advantage because of their inside knowledge.
The charges laid by the SFO related to obtaining a commercial advantage from having access to this information.
Nikoloff and Gallagher were both found guilty over a deal related to the Youth Hostel Association (YHA) building, while Gallagher was also found guilty on charges related to a piece of land known as Stonehurst.
"Nikoloff and Gallagher knew how much owners were willing to sell for, what investors were willing to pay and what was planned for the city," Chang said.
"Rather than use this information to get the best outcome for Christchurch, they attempted to set up private business deals in an effort to profit by hundreds of thousands of dollars.
"Seeking to profit personally from information obtained in a public role is corrupt, regardless of whether they were successful."
She said it was a complex case, which highlighted the importance of organisations having robust internal controls, especially around conflicts of interest when administering public funds.
The SFO said this reminder of the need for these controls was particularly relevant as New Zealand faced another post-disaster rebuild following Cyclone Gabrielle and the flooding.
"The SFO will continue to investigate and prosecute cases which have the potential to undermine trust in our public service and threaten the success of projects which are intended to benefit New Zealand, including in times of disaster recovery."
