Crooked council chiefs bribed with lap dances, football and nights out
…and building firm bosses added cost of trips to bills
CORRUPT council officials were taken to football matches and lap dancing bars as valuable contracts were secured through bribery.
A construction company treated former City of Edinburgh Council employees Charles Owenson and James Costello to corporate seats at Hibs and Hearts games, meals and visits to bars.
The officials also drove expensive cars including an Audi TT Quattro and a Mercedes ML320 – and contractors inflated invoices for local authority work to cover the costs of the bribes they were paying council officials.
Fiscal Keith O’Mahony told Edinburgh Sheriff Court yesterday: ‘ In essence, the council was being charged for the cost of bribing its own officials.’
Invoices were found from ABC Ltd that were falsely inflated to the value of more than £67,000.
The prosecutor said the firm’s hospitality was ‘ extensive’ and added: ‘ Drinks and lap dances were purchased for Owenson and Costello.’
Owenson, 62, of Corstorphine, and Costello, 44, of Balerno, both Edinburgh, earlier admitted offences under the 1889 Public Bodies Corrupt Practices Act and proceeds of crime charges. Both have been sacked.
Kevin Balmer, 52, and Brendan Cantwell, 44, both of Livingston, West Lothian – two former directors of ABC, which went into liquidation in 2010 – admitted a corruption offence. Balmer also admitted fraud.
Mr O’Mahony said: ‘ This case concerns the corruption of City of Edinburgh Council officials by contractors who have given the officials bribes – cash and hospitality – in exchange for maintenance and repair contracts.
‘It also concerns a fraudulent scheme whereby contractors have falsely inflated the invoices following completion of work to cover the costs of bribes.’
First offenders Owenson and Costello both worked as property care services officers in a department that looked after schools,
‘Fraudulent scheme’
care homes, community centres and cemeteries.
They were responsible f or logging property repairs and taking on contractors.
ABC was an approved contractor and carried out the ‘ vast majority’ of the work at the time of the offences.
Mr O’Mahony said that, at the height of its success, ABC turned over more than £4million a year and had more than 70 staff.
Police were informed that council bosses had received ‘a whistle- blower letter’ alleging that Owenson was showing favouritism when giving work to contractors. In 2011, officers raided ABC’s offices in Edinburgh and seized documents.
The fiscal said: ‘The paperwork included records of payment sought by ABC from Edinburgh city council. These records itemised the costs of materials and l abour. However, t hey also included an additional figure ranging from £20 to £2,000 and the initials of either Owenson or Costello next to that amount.’
A total of 175 suspicious work orders were identified. Owenson was linked to 102, with his initials or name against sums totalling £28,387. Costello was related to 73 work orders, with his initials against cash amounting to £14,134.
Owenson and Costello were regular visitors to ABC’s offices, which had one main client – the city council.
More than 90 per cent of invoices between 2006 and 2010 were for work carried out on behalf of the local authority.
In 2009, Balmer told a staff member he was ‘fed up’ with Owenson and Costello and stopped paying them. But bribes resumed because ABC was losing business.
The fiscal said: ‘One witness states that Costello bragged about the money being spent by ABC and on one occasion claimed a night out he had attended must have cost ABC £5,000.’
Between 2006 and 2010, Balmer received £141,541 in dividends and Cantwell £135,071.
The Crown has raised proceedings to claw back crime profits.
Sheriff Michael O’Grady, QC, called for background reports.