An investigation into the ex-politician and Victorian Planning Authority (VPA) board member Theo Theophanous has found he improperly influenced officers involved in an infrastructure project and breached conflict of interest standards by lobbying on behalf of a consortium he was engaged by.
Theophanous was found to have used his position to seek payments from the Australian Education City (AEC) consortium and lobby on behalf of the group to get its proposed education precinct, known as the East Werribee project, underway.
The Independent Broad-based Anti-corruption Commission (IBAC) launched Operation Clara in 2020 and handed over its special report to the Victorian parliament this week.
The report outlined the multitude of problems with permitting lobbyists to undertake director roles on public entity boards, as well as systemic corruption vulnerabilities and regulatory weaknesses covering lobbying activities in Victoria.
Several recommendations from IBAC’s report are expected to set the wheels in motion for change. This includes that the Victorian Public Sector Commission expressly prohibit public entity board directors from engaging in lobbying activities with updates to the code of conduct for directors of Victorian public entities.
The report has also recommended amendments to the guidelines for appointment and remuneration to stop the appointment of lobbyists to a public entity board with functions relating to any matter on which the lobbyist has represented the interests of third parties.
Acting commissioner Stephen Farrow said the investigation exposed how the state’s lobbying regulations needed to be overhauled with major reforms. Failure to do so would continue to place political decision-making at risk of improper influence, he added.
“Lobbyists’ main role is to influence government decisions in favour of private interests. A director on a public entity board should be impartial and should make recommendations that advance the public interest,” Farrow said.
“Victoria’s current conflict of interest provisions do not go far enough when we have a situation where a lobbyist’s clients may be directly affected by the decisions of the board on which the lobbyist serves.”
Not once did Theophanous declare his conflict of interest at any VPA board meeting nor register AEC as a client on the lobbyists register.
IBAC found that the disgraced former government minister sought to advance his private lobbying business by indicating to clients he had access to staff and information within the VPA that would assist with their matters. This included approaching AEC or associated entities for direct payments for his advocacy to the VPA in their favour.
Investigators also uncovered evidence Theophanous obtained other benefits from the AEC and a special adviser to the AEC, namely donations (including in-kind support) to his daughter Kat Theophanous’s 2018 campaign for the Victorian electorate of Northcote. No evidence of his daughter’s knowledge of the improper conduct was found.
Farrow noted that previous calls for the government to reform its donations and lobbying regulation regime last October had previously been agreed to in principle by the state government.
“The Operation Clara report highlights the pressing need for those reforms to ensure Victorian donations and lobbying regulations are in step with other states and territories,” he said.
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