Ex-CEO faces fraud probe over $460K Chatham Islands housing scandal
The Serious Fraud Office (SFO) is reviewing a report on former Chatham Islands Council chief executive Paul Eagle's handling of a housing upgrade project. The Auditor General's findings revealed unacceptable spending and procedural failures, prompting the council to refer the matter for potential criminal investigation.
Eagle has since apologised, admitting he lacked a formal induction when he took the role and exercised poor judgement in managing the project.
The project, intended to modernise Eagle's own accommodation, was initially budgeted at $200,000. However, final costs soared to $460,001.65, with an extra $37,739.19 spent on rent. The Auditor General's report highlighted that Eagle had sole control over the project, raising concerns about conflicts of interest and personal benefit.
The investigation found that Eagle edited or created quotes and contracts himself, bypassing standard procurement policies. He also failed to seek approval from the council, mayor, or deputy mayor, despite the clear financial implications. His decisions were deemed neither conservative nor transparent, further damaging trust in the council's financial governance. The report has now been passed to the SFO, which will decide whether to launch a formal enquiry or criminal investigation. Interim chief executive Bob Penter declined to comment, while Eagle has been contacted for further response.
The findings have exposed serious weaknesses in the council's oversight, including procurement, conflict-of-interest rules, and financial reporting. The SFO's assessment will determine if further legal action is warranted. Meanwhile, the council faces pressure to address the integrity concerns raised by the report.
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