‘Fundamental' conflicts of interest found in Housing Executive audit

Housing Executive headquarters in Belfast
Michael McHugh, Press Association

A FORMER senior member of the Housing Executive was involved in "fundamental" conflicts of interest over land deals, the audit office said.

Colm McCaughley was director of the public housing body's housing and regeneration division and had a close family member with links to private developers Big Picture Developments.

Mr McCaughley challenged the Housing Executive's objection to a planning application by the developer.

His division attempted to alter a response to an Assembly question and wrote an inaccurate letter to planners in a bid to rescind the Executive's position.

Barry Gilligan, a director of Big Picture Developments Limited and former Policing Board member, told auditors that no improper contacts were made by him with any NIHE official, including Mr McCaughley.

An audit office report said: "In our view, these conflicts were so fundamental that Mr McCaughley should not have been involved in any land transactions with these companies."

Mr McCaughley told auditors that, in his view, this report does not present potential conflicts of interest within common sense and appropriate boundaries.

In another case he had direct correspondence with the same family member, who was assisting another developer in legal matters surrounding an apartment complex.

Mr McCaughley retired from the Executive in November 2011 after he was suspended following an investigation into a property deal at Belfast's Nelson Street.

Big Picture Developments submitted a planning application in March 2008 for a development of offices and apartments but no social housing.

In September 2008, NIHE objected to the proposed private use because part of the site was zoned for social housing.

On February 12 2009 Mr McCaughley emailed NIHE's Belfast Area office arguing that NIHE's objection was unreasonable.

The audit office report said: "Colm McCaughley had a clear conflict of interest in the Nelson Street case."

He had declared a family member on a Housing Executive register of interests.

At the time of the Nelson Street case the relative was was a director of a property company, based in Dublin, which invested in Northern Ireland through Big Picture Developments Limited.

Later he became a director at Big Picture Developments.

The Audit Office report said: "It appears Colm McCaughley was aware of the conflict, as reflected in comments in emails to other NIHE staff, 'I had best stand aside from the review' and 'I am struggling to stay away from this'.

"Colm McCaughley told us that he was fully aware that his advice to NIHE staff could be seen as a potential conflict of interest but he had limited options.

"In our view this was not a potential conflict but a real one and we have seen no evidence that he sought advice to clarify his position."

His division emailed DoE Planning Service about a technical matter in an inaccurate and premature fashion which may have helped the developer but did not assist the Housing Executive's social housing programme, the report said.

That led to an internal audit and referral of the matter to police.

Mr McCaughley was suspended on September 30, 2010 having been on sick leave since March 23, 2010.

The NIHE chairman wrote to the PSNI chief constable outlining his serious concerns with the "actions and behaviour of certain senior NIHE staff" and their connection with Big Picture Developments Limited.

The PSNI conducted a criminal investigation and a file was submitted to the PPS in July 2011 for its consideration but the test for prosecution was not met due to lack of evidence. 

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