A former housing bureaucrat who "enriched himself without regard to the public purse" by cutting deals with contractors has been referred to the police by WA's corruption watchdog.
A Corruption and Crime Commission (CCC) report released on Thursday said former Department of Communities senior project manager Mark Ainslie received about $200,000 in alleged kickbacks from two contractors between 2014 and 2020.
It made a finding of serious misconduct against Mr Ainslie, saying he corruptly took advantage of his position in his relationships with contractors at the WA Government department responsible for state housing in regional areas and Aboriginal communities.
The report revealed "a web of deceit, manipulation, and breaches of Mr Ainslie's duty to Housing in the course of a number of different contract tendering and contract management processes."
The contractors — Peter Haxby of HRD Construction Management and Nicholas Rumenos of Griffin Civil – have also been referred to WA Police.
Paul Whyte was faking invoices at same time
Some of the payments to Mr Ainslie were taking place at the same time another WA housing bureaucrat, Paul Whyte, was siphoning money via fake invoices to his personal accounts.
Whyte, a senior executive at the Department of Communities, was jailed for 12 years in November for his actions in what the CCC called "Australia's biggest corruption by a public servant".
"The events outlined in this report occurred when controls at Housing were lax," Thursday's CCC report said.
"It was a time when the depredations of the Assistant Director General of the Department of Communities, previously employed in other Housing authorities, went unchecked."
State housing has been managed by many different departments in recent years but is now handled by the Department of Communities.
'Corrupt bargain' with mate
As the report details, loose controls in the management of housing projects meant that Mr Ainslie had a lot of discretion in awarding contracts for building and maintaining social housing projects.
It said this allowed him to strike an allegedly "corrupt bargain" with his former colleague Peter Haxby, where Mr Ainslie would help to get Mr Haxby approved as a housing contractor.
Mr Ainslie — who had authority to approve contracts worth less than $50,000 without a competitive tender — would allegedly receive 10 per cent of any contract Mr Haxby won from the department.
Mr Haxby submitted a false resume, which hid the relationship between the two men, when applying to the department for his company HRD Construction to be a contractor.
"Despite his friendship and financial relationship with Mr Haxby, Mr Ainslie ... actively concealed any relationship and repeatedly failed to declare a conflict when awarding work to Mr Haxby," the report found.
Between August 12, 2014 and January 28, 2020, Mr Haxby's company, HRD Construction, invoiced the department for more than $1.1 million.
During that time Mr Haxby paid Mr Ainslie $123,500.
The CCC found that the contracts were inflated to incorporate the 10 per cent payment to Mr Ainslie.
"In evidence Mr Haxby said that whilst he didn't knowingly add 10 per cent to the cost of the invoices that he presented for payment, he was acutely aware that he needed to make some money from the arrangement and accommodate money to be paid to Mr Ainslie," the report said.
Ainslie, Haxby lied to CCC
The arrangement was only discovered after a housing official noticed a suspicious transaction and referred it to someone more senior, which led to the CCC investigation.
Mr Haxby's contracts with the department were axed and he later agreed to repay $10,500.
The report said Mr Ainslie resigned when disciplinary proceedings were started and now works for Griffin Civil.
"Housing is to be commended for the steps that have been taken to identify and reduce corruption," it said.
Even while being investigated by the CCC, the report said, the men had agreed to lie about their arrangement.
The report said that Mr Ainslie was in a difficult financial position when he began work for the WA Government in October 2013.
His business had gone into liquidation and he and his wife were struggling to meet their personal debts of more than $137,000 and a home loan of about $372,000.
"In short, Mr Ainslie was highly motivated to find sources of extra money. He was also highly unlikely to be loaning money to others," the report said.
Griffin Civil invoices a 'ploy to disguise bribe'
The report said it was likely that Mr Ainslie first met Mr Rumenos at a Carnarvon land development project in 2016.
Griffin Civil's invoices submitted to the department between then and 2019 totalled just over $4 million, with most of this work awarded through Mr Ainslie.
The CCC investigation found Griffin Civil paid Mr Ainslie $75,000, which included $65,000 into his bank account and another $10,000 into Mr Haxby's bank account.
"Mr Ainslie and Mr Rumenos needed to explain why Griffin Civil would pay a public sector employee a total of $75,000 in circumstances where that employee was responsible for awarding contracts of significant value," the report said.
Both Mr Ainslie and Mr Rumenos told the CCC these payments were for work done by Mr Ainslie and provided invoices allegedly submitted by Mr Ainslie.
But the report said the invoices were "suspect", "incorrectly dated" and "for projects that never got off the ground".
"The commission concludes the invoices were a ploy to disguise the payment of a bribe," it said.
CCC head tired of 'procurement corruption'
Corruption and Crime Commissioner John McKechnie told ABC Perth on Thursday he was getting very tired of "uncovering yet another procurement corruption".
"This occurred after we had reported on [North Metropolitan Health Service], when people went to jail or were fined and so forth," he said.
"It occurred after Paul Whyte had been publicly charged as well. It occurred after various things.
"We have several more reports that we can't presently publish because of court proceedings although we're looking to see if we can change that."
But Mr McKechnie said the Department of Communities had made some changes which looked "promising".
"This was a time where there seemed to be very, very few checks and there should have been," he said.
"Hopefully things have changed now under new management and we'll wait and see."
