May 192016
 

artgallerypicBy Scott Shaw.

I was the longstanding Insurance Officer at Aberdeen City Council and had held that position for nearly 17 years. My main duties were the running of a small insurance section which handled all the councils insurance claims such as pavement slips/trips, road pothole claims, council motor fleet accident claims, fire and employers liability claims etc.

Part of my duties also involved liaising with council insurers over insurance issues/covers which also involved insurance tender work at 5 yearly intervals. I am a fully qualified associate of the Institute of Risk management.

During March 2012 I had very good reason for believing that wrongful activity was occurring on a key insurance policy used to insure the high value art collections of Aberdeen Art Gallery and this activity had been longstanding.

The value of the Art Gallery collections are huge and at March 2012 was £240 Million. I blew the whistle, which is more accurately defined as making a public interest disclosure under the Public Interest Disclosure Act 1998. I was suspended immediately after doing so.

The wrongs concerned key insurance covers.

The disclosure activated the Councils Whistle Blowing Charter which fell under the responsibility of the former Head of Legal & Democratic Services and a formal investigation was conducted by the Councils internal auditors, Price Waterhouse Coopers.

I met with PWC on 25th June 2012 at PWC’s Aberdeen office where I presented further evidence regarding the wrongful conduct of the underwriting unit of the Councils insurers, Zurich Municipal.

The concern I raised was that a letter from the underwriters, in response to my request for clarification, presented information which was (to put it mildly) inconsistent with the terms of the actual active insurance policy in that it sought to reassure that theft was not limited to ‘forcible or violent entry to or exit from the premises’.

No such assurance is apparent in the pertinent section of the actual policy.

My suspension lasted an entire year which is incredible to say the least and at the end of that year I was dismissed and handed a PWC investigative report, the contents of which I considered to be inaccurate and in parts unfounded. This report was then used by the Council at Tribunal Court in Aberdeen where I firmly believe it misled a court and denied me fair judicial hearing.

The report was unfairly weighted against me and included what I consider to be inaccuracies with regard to the content of emails and time events. The most worrying aspect however, was the omission of the aforementioned letter from the underwriter, despite this having been examined by the report writer, which was key to my case.

The writer of the report was also allowed to destroy all the supporting e-mail documents he alleged to have examined in his report (thus removing an audit trail) which contravenes documentation retention surrounding fraud / whistle blowing investigations.

It has taken me literally thousands of hours and extensive use of the Freedom of Information statute to validate the disclosure and to expose the activities of PWC with regard to this matter. The covering up of wrongs is highlighted itself as being wrongful activity under the Protected Interest Disclosure Act 1998.

Based on all the evidence I have gathered and studied, it is apparent to me that, for decades, Aberdeen City Council had been diddled out of fire insurance cover on what is effectively the largest fire insurance risk north of Edinburgh.

If that was not bad enough this activity went right around the UK with Councils up and down the Country not having fire insurance cover on their high value art collections.

The FOI returns I have show that over 95% of UK Councils had inadequate fire cover.

There were other wrongs on the arrangement dating back to 2003 including wrongful activity in relation to specific covers including the important theft cover.

It took me over 2 years to produce a 160 page investigative report into the matter which validated the disclosure and on 9th November 2015 this report was presented to the Chief Executive Officer of Aberdeen City Council and the Deputy Provost who sits on the Councils Audit, Risk and Scrutiny Committee.

In late December I had managed to arrange a meeting to discuss the report and during this meeting (which included Councils Head of Legal ) the Deputy Provost suggested the Police should be notified due to the nature and historic matters concerning the insurance arrangement.

The months ticked by and after several prods and chase-ups, I received a nine line e-mail from the Council’s Legal Head and a four line letter from the Councils Chief Executive Officer declaring their satisfaction with the insurance arrangement and the Price Waterhouse Coopers report – this outcome being contrary to discussions at the meeting of 20th December 2015.

I have now taken the matter up with the head of complaints at the Chartered Institute of Public Finance Accountants (Cipfa) who are the professional body of the PWC Senior Manager (who carried out the PWC investigation/report) and also the CEO of Aberdeen City Council. For any interested reader, Cipfa publish the findings of misconduct/ethics hearings on their web page which is www.Cipfa.org

A recent Freedom of Information enquiry I sent to all 32 Scottish Councils indicates that for PIDA whistle blowing cases in local government approx 70% find no wrongs.

It is my firm belief that this figure is far too high and likely to be due to extensive nullification/turning a blind eye/cover ups of said disclosures.

I have presented my case to members of the Scottish Parliament and requested that the Scottish Parliament look at the matter. This they failed to do back in 2013 when a Public Petition was raised in the Scottish Parliament specifically concerning possible cover ups of whistle blowing disclosures. This petition can be seen on www.scottish.parliament.uk under PE01488.

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  42 Responses to “Whistle Blowing At Aberdeen City Council”

  1. At long last………..this story hits the public domain via an on-line publication who had the guts to take it on. I salute Aberdeen Voice for do this.

    • Well done Scott…… It is very necessary for important matters such as this to be opened up and taken into the public domain. At the end of the day, the tax payer provides the money to these Councils and we are all entitled to know what happens to the funds. I sincerely hope that this article leads to the full public awareness that it deserves and that after what has been a very long and stressful time for you, this whole matter is taken seriously and receives a full investigation so that the people behind all this can be brought to account for their actions and or failings.

      Heads need to roll and people need to learn!

      The big problem is that such organizations rely on their sheer size to bully and intimidate the small people – us the public! and that gives them the opinion that they can all do what they like, ignoring rules and laws. We just have to look at what the banks did only a few years ago and we are all still suffering from that sorry episode.

      The Deputy Provost was quite correct to suggest that the police should be notified. This should have been automatically done by the Council. From what I understand, there a great many items of very substantial value held in galleries and museums up and down the Country and that many of these objects still remain in the ownership of individuals or the families and others who have entrusted the galleries or museums to fully protect everything in their possession. Likewise, all the other items held in these places are the property of the tax payer. They are not the personal possessions of the Council. With the Council and in fact every Council as you mention, not having full insurance cover, is surely a gross failing on their part to honour the professional commitment and requirements that they should provide as a minimum responsibility and what the public expect.

      On whistle blowing, there was an article in the Press & Journal only this week, dealing with the intimidation and bullying behaviour from institutions against those who stand up and through honesty, reveal wrong doings! For 70% of investigations to be basically swept aside with supposedly no wrong doing being found, is quite clearly a wrong doing in itself and needs to be fully investigated.

      More people need to stand up like you are doing Scott and have the guts and determination to reveal everything. Keep going and do not give in!!

      • You raise a number of pertinent points. The majority of local government art gallery items are not owned by Councils, they are either on loan from members of the public, owned by the citizens of the Council and thus the Council are custodians or are items in a travelling exhibition. Very, very high value items on loan from national galleries are covered under government indemnity and the Council are required to insure 1% value of these but even the 1% can be a reasonably high sum.

        My FOI request was specifically sent to all 32 Scottish Councils asking only about PIDA disclosures ie proper disclosures under the public interest act that they had records for. In 70% of such cases no wrong doing was found and I believe this this is far too high an outcome. The person on the Scottish parliament site who raised petition PE01488 and PE01605 fully understands the situation……………..Its called integrity risk. Whistle blowing cases attract a high integrity risk from within the organisation where the whistle is blown. The petitioner fully realises that to eradicate this risk from occurring ie preventing cover ups etc one has to create a system where the whistle is blown via an external whistle blowing hotline run externally and outwith the Council. He has managed to get Edinburgh City Council to change onto this system and its run very successfully for 2 years. They have recently published a report on the 2yr trial period and they are very happy with the outcome and are keeping it. ECC are the only Council in Scotland to run such a system. Prior to it they had quite a few problems I understand re disclosures going wrong and not investigated properly.

      • Thanks for expanding on the whistle blowing. Do you think that had the external process now used by Edinburgh C.C. been in operation at Aberdeen C.C., your whistle blowing disclosure would have received a different outcome and the wrong doings would have been exposed?

        As I have said in another post, it appears that with all that has happened to you, everyone at Aberdeen C.C. from the CEO down , including PWC are complicit to what was going on. In which case, this is of National importance and should now be fully uncovered, investigated and all of the wrong doings and those implicated in the decision making process must be exposed to the public. After all, these people are employed by the tax payer to look after their best interests – not to play games with the public assets and finances.
        For an investigator to destroy correspondence and exclude pertinent documents from such an important Report is beyond comprehension and his actions alone must merit a full investigation. If there was nothing to hide, then why go to the trouble of destroying correspondence and one wonders, what else has been destroyed.
        Thankfully, there has not been a disaster at any of the galleries or museums involved, but what would have happened if there had been major loss through fire or theft? What about damage by flooding or even as a result of building decay? There was a recent case of flood damage at an art gallery in Glasgow and we frequently read of open theft from galleries. Would Aberdeen C.C. or any of the other councils be duty bound to publish full details of such a disaster, or would this just be covered up too when it came to the fine detail of there being no suitable insurance cover to protect
        the items concerned.

        Surely, as far as Scotland is concerned, this is now a matter which needs to be seriously investigated and reviewed by the Scottish Government with fixed legislation being introduced? You mentioned that you had already taken your case to the Paliament and nothing happened. Does this suggest that there is yet another stone walling to protect certain parties from a deeper investigation, or is this just a case of incompetence?

        I am curious to know if the Deputy Provost will go ahead and report this entire matter to the police. Have you thought about going to the police direct?

        There appears to be a great deal of information to be revealed and carefully investigated.

      • Just a further couple of questions. The readers who are following this article and the ultimate exposure of a clear wrong doing, may, like me, also be questioning whether the money paid out by Aberdeen CC and other councils across the Country for the Zurich insurance policies, has in fact been a total waste of tax payers resources? You may not be able to answer this question Scott, but just how much money has been spent by Aberdeen CC on insurance policies which are totally useless over say the past 10 years? What would be the purpose of taking out insurance cover which is ineffective and at the ultimate risk of having no suitable protection for priceless works of art. Surely nobody can gain from this and the whole thing is total mismanagement and incompetence?

        This begs a final question: if this practice goes on with insurance cover for publicly managed works of art etc., should everyone now be examining the wording of their insurance policies for any valuable items owned and supposedly protected by what could be a worthless piece of paper.

      • Suzanne says – that’s probably the best set of logical, intelligent questions I’ve seen posted on AV these many years.

      • Mr Mackay raises a number of important points in his 2 additional posts and I will try and deal with these.

        1. IMO Had ACC had an external hotline in place when I blew the whistle this mess would never have happened. It would have resulted in the Police being notified correctly and very early on in the investigation and my whistle blowing disclosure fully upheald.

        2. I believe Aberdeen City Councils CEO (and current Legal Head) are complicit in this and are covering their internal auditors who are PWC. They are I think covering them to prevent any exposure of wrong which was carried out by their internal auditors and where this would expose a massive failing in the Corporate Governance of Aberdeen City Council and where criminal acts were pointed out, covered up and nullified.

        3. The Scottish Government seem to be lagging way behind the times when it comes to whistle blowing in the public sector and where serious integrity risk exists with said disclosures. The problem is that organisations like Audit Scotland, Local Govt Ombudsman etc leave Councils up to their own devises with regards to handling these matters with little oversight into the monitoring of cases . Thus the integrity risk can become huge. There is no oversight whatsoever with regards these matters apart from ensuring that procedures are in place. Procedures that can be warped, twisted, distorted from within the organisation where the whistle was blown. I have 25yrs professional experience in Risk Management which is a subject which identifies, analyses and controls risk in areas of corporate life. Integrity risk or corruption risk (if you prefer) is the number 1 risk associated with protected interest disclosures and that risk oozes from within the organisations where the disclosure was made.

        4. I reported this to the Police myself by walking into Queen Street Police station during 2015. The matter was passed on to their fraud squad who I chased 3 times over the phone. One evening I got an inspector on the phone (he never visited to obtain documented evidence) and he went away to check a few points. I got a message left on my answer phone that he had carried out some due diligence checks by ( by phoning ACC’s legal unit) and he was dropping it. He would have been told that the PWC investigative report showed “no wrongs” and thus it was a tick box exercise in time wasting.

        5. ACC pay Zurich Municipal circa £1.5M per annum in insurance premiums. This overall premium is for an insurance portfolio of covers such as employers liability cover, public liability cover, buildings insurance and motor insurance cover. All these covers were ok. This matter relates to the insurance cover of the high value art items only. The covers however are critical as they relate to ultra high value paintings valued at £32M downwards. Overall they amount to one of the highest value on shore risks north of Edinburgh which are highly susceptible to fire and theft.

        6. With regards Zurich Municipals insurance arrangements for the high value art items which IMO never at any stage met the Councils insurance tender document since 96/97. Zurich Municipal resorted IMO to lying, cheating and engaging in wilful fraudulent misrepresentation on the arrangement at ACC in addition to operating a UK wide insurance scam with regards to the essential fire cover of the entire countries art collections that were under the control of UK local government. The fire insurance scam only ended with dramatic changes to UK insurance law specifically addressing problems relating to non disclosure.

      • Thanks Suzanne. I just feel that nowadays, the public are required to contribute large sums of money towards every aspect of life and where we have to rely upon other people, whether it be the council, NHS or any other organization, Public or Private, we should be entitled to have clarity and complete honesty at all times. It is not much to expect or ask for. It seems very sad and a terrible situation that someone such as Scott Shaw, has effectively had his career ruined by being honest and revealing a failure in the system, which should never have happened in the first place.

      • Thank you Scott for answering my questions.

        Would I be right in thinking that during the period of time since you exposed these wrong doings, the CEO, the Head of Finance and also the Head of Legal, amongst others at Aberdeen CC have all departed and been replaced. It would seem that the new individuals, having declared that nothing was wrong in their eyes, are now also complicit to what has taken place. Either that, or they are all totally incompetent?

        By refusing to accept what was happening, despite all of the evidence which you have submitted, clearly shows that there must be something much deeper and more complex going on. Why would an organization such as PWC want to risk having their reputation damaged by being party to such activities? As you say, there must be a massive failing in Corporate Governance at the Council which has become totally endemic throughout the entire entity, so much so, that the risk of any public exposure, would have significant repercussions and financial implications up and down the Country. Hence the need to bury it?

        From what you have said, it appears that the Scottish Government and I assume therefore, the local MP and the local Government Ombudsman are doing nothing? You also mentioned that you went personally to the Police and they are not taking the matter up. Do you think the Deputy Provost may now report everything, given that was his wish?

        What about Audit Scotland. Would they not be duty bound to now investigate every aspect of this? Now that it has been shown without doubt from the evidence which you have collected, there is something very wrong, surely they must take this seriously and demand answers.

        As for Zurich, it would appear that for many years they have been collecting hundreds of thousands of pounds for potentially worthless policies, not just from Aberdeen CC but from all of the other Councils and organizations who have taken out similar insurance cover through them.

        I really hope that you can take this forward and are not bullied into submission, as frequently happens with the big guy, small guy scenario !

      • I will attempt to answer the points you raise in your recent post,

        The disclosure was made in March 2012 and the then acting CEO and Monitoring Officer have since departed. The Current CEO and Monitoring Officer have been made fully aware of matters via an extensive professional 160 page report including extensive appendix sections. They are IMO complicit via their stubborn refusal to accept proven facts.

        I believe the much deeper malaise which exists within ACC is a constant oozing lack of integrity in the face of empirically proven fact and where it is now understood that they engaged the services of a cohort (PWC) who were IMO quite happy to prostitute themselves for money. Integrity didn’t get a look in I believe. And you are right………….it seems the corporate governance of Aberdeen City Council is riddled with incompetence and intentional oversight. A perfect example of this is my suspension letter of 30th March 2012 where it is apparent that the finance director/line manager personally approached the organisation highlighted as committing wrongs in an attempt to coerce that organisation into bring charges against me. I quote this out of my suspension letter:

        “Serious concerns have been raised by Zurich Municipal as to the inappropriateness of your handling of certain areas of the Council’s insurance portfolio; this has potential to cause serious reputational damage to the Council ”

        You couldn’t make this up, you really couldn’t. As soon as I blew the whistle on the wrongs IMO a numpty finance director and line manger immediately run to the wrong doer via telephone contact to get the wrong doer to come forward with charges that they then write in a suspension letter. And that is after they were both fully aware of the serious nature of the wrongs being committed against the Council ! It is the corporate governance of Alice in Wonderland.

        Audit Scotland are currently carrying out a tick box investigation which will IMO not address and tackle the serious failings with regards to this case. They should be addressing and looking what I believe were the serious breaches in ACC’s corporate governance and particularly where PWC were involved. Of course the Police should be called and I have already made this obvious to Audit Scotland that they need to do this.

        And as for Zurich Municipal you are absolutely right. Hundreds of thousands of pounds around the UK and over decades have been raked in for an insurance arrangement that was completely useless IMO. It was I believe intentionally useless due to the documentation scam that was running on Councils for decades which IMO cheated these organisations out of fire essential fire cover.

        I won’t be bullied into any submission. It is they who are frightened to meet with me and not the other way round.

  2. Great article

  3. All power to you Scott.

    I understand exactly how frustrating and stressful this must have been. Don’t let the bad guys grind you down and the very best of luck.

    Well done AV!

    • Thanks very much Bruce…………….the main stress that comes with most whistle blowing saga’s is after the whistle is blown. The organisation into which the whistle was blown either takes a right move or a wrong one. If they take a wrong one and then try to cover up what has been exposed the journey becomes very stressful. All power to AV for getting involved.

  4. It sounds like another cover up going on here. Big organisations trying to silence individuals. I would have thought that you should have been fully protected as a whistle blower?
    If this is the case, how did you find out about the councils not having fire cover?

    • Thanks for your comments John. Protection for UK whistle blowers is spurious. It is meant to be provided by a piece of legislation called the Public Interest Disclosure Act 1998 and via the tribunal courts. Fair judicial process however can only occur if the organisation into which the whistle was blown are being honest and open regarding the findings of any investigation that has taken place into the wrongs. If they wilfully cover up wrongs then they are misleading a court. This happened in my case and PWC are the cause of that.

      Regarding your question concerning the fire cover. This involved a documentation scam that Zurich Municipal were using against their entire UK customer base. The annual renewal document or disclosure document to be more precise induced customers into non disclosure of high value art items under Part A of the policy where they were supposed to be insured for fire, lightening, earthquake and aircraft cover. Councils only disclosure these items where they were asked ie under Part K of the disclosure document. If you look at the exclusions under Part K that AV have posted you will see fire cover is excluded. Thus Councils had no fire cover for decades in this arrangement. I have verified this via FOI to all Councils who used the arrangement. The legal scam came to an end via important changes to non disclosure insurance legislation which are to be introduced. When the scam was up ie Zurich Municipal would have to pay fire claims regardless of the non disclosure having occurred they then redesigned their All Risks policy and included fire cover but without telling their Uk customers what they were doing. How could they tell them ? They also charged no increased premium for doing this as the scam would also have been apparent to their UK customer base. The scam worked a treat for over 20yrs and for that duration Aberdeen City Council and many other Councils throughout the UK had no fire cover for ultra high value fire susceptible works of art which would burn in minutes.

  5. How do you know the theft cover was fraudulently misrepresented??

    • If you look at the Zurich Municipal document dated 2003 that AV have posted you will see the best example you are ever going to see of fraudulent misrepresentation of a commercial insurance policy. The ZM underwriting division produced this at a tender time when questions were being asked concerning covers stipulated in the Councils insurance tender document. ZM drafted and sent this letter to fraudulently deceive me into believing the contents of it were true. 3 of the covers in the letter are direct contradictions to the exclusions within the policy itself ans you can see this clearly. There is no definition of theft cover in the Part K policy (it is defined in Part L which is also posted). The ZM underwriting unit were endeavouring to make me believe the policy operated on a full theft cover basis ie unforced entry/exit thefts would be covered. They did this again in March 2012. After I was suspended on 30th March 2012 I found out via the Insurance Officer at Highland Council that they had a walk in theft turned down by ZM on the same arrangement and they received a letter stating that the theft peril operated on the restricted basis ie restricted to break in/out and/or force against a person. My extensive FOI research indicates that many claims around the UK have been turned down for unforced walk in/out theft. One Council……….Tamworth Borough Council received e-mail confirmation from ZM’s underwriting unit itself that the theft cover is restricted and thus the is 100% categorical. ZM used fraudulent misrepresentation at Aberdeen City Council over an extensive number of years on this important cover in order to deceive ACC into believing the policy met the tender requirements. They did this knowingly, willingly and intentionally.

      • And the theft cover was part of your disclosure? Didn’t the PWC investigation look into this as it was one of the concerns you raised via your whistle blowing disclosure?

      • Stuart raises a key fundamental point in relation to the matter.

        The issue over the theft cover was the main thrust of my whistle blowing disclosure and which was highlighted to both my line manager and the finance director. It was specifically discussed (and understood) during a private meeting with both at 2.00pm on Wednesday 28th March 2012 in the ground floor meeting room of Aberdeen City Councils AECC offices. This followed a long e-mail sent to the finance director on 26th March 2012 highlighting the problem and where an extensive explanation of the long standing problem with the theft cover was provided and where I state:

        “Zurich have basically been committing longstanding policy wording fraud on the Council”

        That e-mail was part of my disclosure and was examined by the Councils Monitoring Officer (Head of Legal). In my letter to her I again explain the problem with regards misrepresentation of key covers and state:

        “My reporting under whistle blowing rules follows my repeated attempts to bring the matter to line managers attention and also to the attentions of finance director. Repetitive attempts to raise this very important issue regarding the Councils insurances has fallen on deaf ears and therefore I have no alternative but to now raise these matters with yourself via the internal whistle blowing rules”

        The IMO fraudulent misrepresentation with regards the theft cover was the key area of concern in my whistle blowing disclosure. What I believe amounts to proof of the criminal nature behind the ZM underwriters activities was discovered via a lengthy discussion in person with Highland Councils insurance officer and when I met this person during May 2012. This important evidence was presented to the PWC investigative officer during a meeting with him on 25th June 2012 at PWC’s Aberdeen offices and where he took extensive notes and said he would investigate the matter. He also stated that there would be further meetings with regards the matter. At this stage I believe it should have been a Police investigation with the PWC person making a quick telephone call to the Highland Council insurance officer prior to passing the matter over to the Police.

        The PWC investigator did neither. No further meetings took place with me and I learnt much latter that he neither had made contact with Highland Councils insurance officer who had the evidence waiting on his desk. when I learnt of this I notified the Councils Monitoring Officer via e-mail of these facts and that a central issue of the investigation had not been carried out. She ignored it even though she had the PWC report in her possession at the time and where it was clearly obvious the matter had not been dealt with. When I eventually received the PWC report it was apparent that the PWC investigator had IMO wilfully fabricated an e-mail specifically relating to the theft cover and where he was trying to provide protection to the ZM underwriter who was engaging in what seems like criminal fraudulent misrepresentation against the Council. His report is IMO full of e-mail fabrications, altering of time events and omissions of key documents such as the 2003 Zurich document that AV have posted and where historic fraudulent misrepresentation is apparent.

        By engaging in these activities I believe the PWC investigator therefore ignored investigating (and reporting top the Police) the criminal activity and indeed attempted to cover it up via his fabrications within his report. It has been possible to expose this key e-mail fabrication within his report only after having to expend a horrendous amount of time and by using 6 separate corroborative pieces of evidence to expose it has having been an intentional fabrication. All these are in my 160 page report which was presented to Ms Angela Scott, CEO of Aberdeen City Council on 9th November 2015 yet in a recent letter to me dated 7th March 2016 she expresses her satisfaction with the PWC investigation and report.

  6. It would seem that a group that is in a position to council or advise the public in various matters would take it upon themselves to have all the information that is available.
    This would also include finding ways to use the city or towns finances in ways that best serve the public.
    I would say that this in no way has been done in this case.
    Perhaps it is time that this council look at the position they hold and represent that position.

    • Local government is structured around various committee’s run by democratically elected councillors and Officers who are the paid employee’s of the Council. Any whistle blowing concern raised has to pass to a Monitoring Officer (paid Officer) for approval. IMO In my case this Monitoring Officer skewed the disclosure somewhat to keep the mention of wrongs out of the disclosure and thus out of any report which would eventually go back into committee. IMO The whistle blowing investigative officer (PWC) failed to carry out an investigation into wrongs even when these were discussed with him on 25th June 2012. Thus when his resultant report was produced and returned to the Monitoring Officer there were no wrongs mentioned as part of the disclosure and no wrongs found. That sanitised report then gets presented to committee and misleads them.

      This is how big town hall works. They can then pull the shutters down on the whole thing and go into denial. And why a wrong can still exist on the arrangement 4 yrs after it was clearly identified.

      • Scott, could it therefore be assumed that they ( the Council and PWC) all knew that the wrongs had taken place and therefore did not bother to investigate the matter, hence the fact that the Monitoring Officer failed on purpose, to keep the mention of wrongs out of the initial report? and that evidence was subsequently destroyed or not included in the final PWC Report. Could it be, that these wrongs are just the tip of a much larger iceberg, in which numerous other wrongs have not been disclosed or have been systematically covered up? Therefore, this would surely mean that everyone from the CEO, the Legal Officer and Compliance Officer and every other senior official in the Council who is in a position of control and / or trust, is complicit to what has and presumably still is taking place. Not to mention PWC who were appointed to “investigate” the matter.

        Do you happen to know how much PWC were paid for conducting this investigation?

      • The primary reason for the Monitoring Officer from keeping wrongs out of the disclosure and report that she presented to Council Committee on 18th April 2012 was to block any wrongs from exposed to democratically elected councillors. It also meant that they kept out of being recorded via Council minutes. You are correct in your assumption that they knew wrongs had been pointed out and as long as they did not investigate them then how could they be proven. They, however did not calculate or even remotely see the possibility of a whistle blower being able to prove the wrongs and account for the wrongs via his/her own investigation and independently provided documentation.

        The destruction of e-mail documentation at PWC’s Glasgow office was an attempt to destroy an audit trail which would prove the highly corrupted nature of the PWC investigation and report. The PWC investigator was sat in his Glasgow office with a pile of e-mails fabricating a story line and was then allowed to destroy the lot which contravenes Audit Scotland guidelines on fraud/whistle blowing investigations.

        Aberdeen City Councils current CEO and Legal Head are entirely complicit in this matter. Totally so. Both of them are specified designated statutory officers who are compelled via statute to account for wrongs as and when these are apparent and have been pointed out to them. They choose not to do this and therefore are displaying extremely low integrity and ethical standards and where they continue to do this. They chose to bring further reputational damage on their organisation and where criminal fraudulent insurance misrepresentation is still in place.

        PWC were paid exactly £3,750 – exclusive of VAT which would have been charged on the total invoice costs, which is reclaimable from HMRC. I quote directly from a FOI request I made to the Council re the cost of the PWC. Nearly £4,000 for an IMO corrupted report which I believe ignored white collar criminal activity and perverted due legal process in a public court of law.

      • Sorry………..there’s a typo. The Monitoring Officer first presented the report to Council Committee on 18th April 2013.

      • Scott, This is quite incredible. Who oversees the conduct of the Monitoring Officer?

        To supress this or any evidence of a wrong doing from the elected councillors who effectively represent the public is very wrong. Have you thought of approaching the councillors directly yourself?

        For anyone to destroy documentation which is part of evidence, must surely be a criminal act and at the very least, totally unprofessional. PWC must have received written instructions from someone to go ahead with the destroying of the emails and documentation. However, it is almost impossible to destroy the embedded electronic evidence from a computer system and if a full investigation was opened up, it should be possible to retrieve the evidence.

        From what you have said and evidenced, the CEO and Legal Head are certainly appear to be devoid of professional integrity, having failed to deal with your complaints or any of this properly. Should the Legal Head not be reported to the Law Society so that they can instigate an investigation? Likewise for the previous Legal Head. Who or which organization is responsible for the conduct of the CEO ?

        There are many questions yet to be answered! As I said the other day, is this just the tip of a very large iceberg? Finally, rather than end up with a complete disaster lurching out of control, would it not be in the Council`s interests to admit they were wrong, had failed in the due diligence of the insurance policies and apologise to you for what they have done to you and to the public for the costly failure in protecting their property. The truth can never hurt!

      • You have hit on some very pertinent points and I will address these.

        There is no oversight of the Monitoring Officer (Head of Legal) with regards whistle blowing disclosures which are passed to this person once they are made. This is the number 1 primary integrity risk regarding such disclosures in Scottish Local Government today IMO. A Head of Legal is the worst possible person who could be solely put in charge of said disclosures and with no opinions or input from any other person with regards said disclosures IMO.

        The Head of Legal thus acts as a filterer of bad news from ever reaching Councillors. If the disclosure can be handled and dealt with easily then the system will function as it should and Cllr’s would be made aware of the full nature of the disclosure. However, if the disclosure is awkward with the possibility of large fall out risk occurring via the exposing of wrongs associated with an important provider of Council services then the integrity of the whole system falls apart totally. My case is a perfect example and illustrates this clearly.

        With regards to electronic data storage, you are quite correct. In the case of ACC it is kept off site via an external hard drive provider and instruction would probably have already been given by now to wipe all trace of e-mail data off the records. However, I do not need the full e-mail records of the last two weeks in March 2012 to prove what I believe is extensive e-mail fabrications within the PWC report. The e-mails that do exist (and which I have) prove the fabrications. The destruction of said e-mails breached both Audit Scotland guidelines into fraud/whistle blowing investigations and also data retention requirements for outsourced work as laid down by the Standards for Scottish Solicitors Professional Practice Rules 2011.

        I believe the current CEO of ACC, Ms Angela Scott and her current legal head are devoid of professional integrity with regards this matter. Ms Angela Scott has continually refused to meet me to discuss (after asking her in writing 3 times for a meeting) and they continue to be entirely obstinate in their refusal to accept facts. A disaster lurching out of control is what they seem to desire and where they still have an insurance arrangement with fraudulent misrepresentation in place. The truth hurts if it proves the entire corporate governance of ACC surrounding this matter has failed and failed dismally.

  7. It must have been very stressful and frustrating for an individual to go through this particularly there are cover ups and wrongdoing in this case! Best of luck!

  8. Hi,

    The investigation you say was carried out by PWC. Why did they not uncover the issues you have discussed? thanks

    • Thanks for your post David. The point you raise has been dealt with in my reply to an early post sent by Stuart. After reading please come back with any further questions you may have with respects PWC and the activities they engaged in. Regards.

  9. Shocking to see big professional firms behaving like that! Was the PWC whistle blowing investigative report presented to the tribunal court by the Council?

    • Good question. The PWC investigative report was IMO a highly corrupted account of fact and where the PWC report IMO engaged in extensive e-mail fabrications and altering of time events and where he was apparently allowed to destroy all e-mail documentation within PWC’s Glasgow offices prior to forwarding an undated and unsigned corrupted account of fact back to the Council. The Councils Monitoring Officer knew that he had not dealt with the central issue relating to my disclosure as she was informed by me via e-mail and she had a copy of the PWC report in her possession. She however as the Councils head of legal used this IMO corrupted report and presented it to the tribunal court as a true account of fact and thus was responsible (along with her PWC cohorts) I believe of wilfully misleading a court and denying due legal process to take place. She is a current committee member of the Law Society of Scotland for god’s sake. Recently retired out of ACC with a nice fat augmented superannuated pension I understand.

      • You ,as a member of professional body/associate, acted ethically but IMO the Council and PWC misled a public court and cheated you out of a fair tribunal hearing that you lost your job. That is absolutely disgraceful. I do hope your case gains wider exposure and is being heard from the Audit Scotland. Shame that it has ruined your career!! Very best of luck, Scott.

  10. You have mentioned problems over the theft cover related to Art Donations. Does that mean as a potential donor of Art to the Council that any high value Art is not covered unless there are obvious break-in signs? For example – where is my Picasso that I lent – I want it back to sell it. Err we don’t know and since there are no signs of a break-in it’s not actually insured therefore the value is effectively lost? Bad luck! Can councils having this policy therefore really be trusted with major (or minor) items of Art having any value at all? If it’s also inadequately for by fire then that is truly dreadful and represents a possible major cultural loss.

    regards,

    Colin Harrison

    • Very valid post Mr Harrison and you are bang on the money. There is no insurance in place for walk in/walk out thefts or thefts by other means without force. This could include thefts where a thief hides in an art gallery during opening hours and then raids the place during closing hours and escapes via a fire exit. The possibilities of committing theft without force is endless and is a primary risk for all uk art galleries open to the public. Aberdeen art gallery staff themselves say this risk is a major concern.

      IMO Zurich Municipal know full well that their policy does not cover for these events but rather than being truthful about this shortcoming they chose to commit white collar crime via fraudulently misrepresenting the cover. After the IMO corrupted PWC document came into existence, Aberdeen City Council got a second opinion and after viewing e-mail statements forwarded by the ZM underwriter he wrote:

      “It is apparent from the examination of documents made available that the Insurance Company has categorically stated that Theft losses are insured whether there is evidence of forcible entry or exit from the premises. In addition as the policy wording does not stipulate that theft is only covered in such circumstances (ie of forcible entry or exit) it is impossible to follow anything other than the Insurers written confirmation on this point.

      Therefore it is clear that he believes and Aberdeen City Council believe (from what ZM are saying) that theft cover is Full ie would cover walk in thefts. This point is important as for fraudulent misrepresentation to exist it is important that one can prove that the misrepresentation has been believed.

      His comment that the policy does not stipulate the theft cover is incorrect as it is clearly stipulated in the place where it should be ie under the contracts definition of theft cover and AV have posted this clearly as part of the article. Zurich Municipals theft cover is clearly defined in the only place where it needs to be ie under theft cover.

      The point you make about the UK wide public sector scam involving the historic hole in fire cover for Council art galleries is absolutely correct. No insurance means no money. This scam has fortunately been brought to a close via pending UK wide insurance legislation. At the present moment in time it is highly unlikely that any UK local government organisation are aware of this. It was a complex documentation scam (IMO) which I have touched upon via my reply to John who posted earlier. It however should be fully exposed and to organisations who continue to rely on Zurich Municipal for insurance and Risk Management services. This insurer has been proven to be the largest single risk that these organisations had IMO.

  11. Thanks for reply – Whistleblowing seems a very risky occupation if your notes are anything to go by – is there any possibility that some sort of independent investigation will go forward highlighting the issues you describe?

    Colin

    • Audit Scotland are carrying out a month long investigation into this as we write. It is due to be finalised by the end of May. Audit Scotland are the external auditors of all Scottish local government organisations.

      I guarantee that this investigation will not look nor document anything with regards the seriousness of what has taken place. It will not document the longstanding situation that existed with regards fire cover and nor tackle the (IMO) fraudulent misrepresentation that still exists with regards theft cover. It should also tackle and deal with the very serious failings in Corporate Governance which took place within Aberdeen City Council where (IMO) their own internal auditors (PWC) intentionally ignored investigating and purposefully covered up my disclosure.

      • An additional comment with regards the current Audit Scotland investigation.

        I first made contact with this organisation in during 2013 when I e-mailed them details of the problem. I again made successive attempts to involve them during 2014 where their involvement may have prevented (IMO) a court being misled via the PWC report. During the later part of 2015 and when I was virtually kicking the door down of the Auditor General of Scotland they started to show an interest and have agreed to carry out an investigation.

        This investigation needs to document the long standing failings in fire with respects to ACC’s art collections and where I have presented a spread sheet and supporting evidence to show the failings were UK wide. This needs documented and circulated to all 32 Scottish local govt organisations and also circulated to their English/Welsh counterparts.

        They then need to tackle and document the (IMO) cover up PWC investigation/report into my disclosure at ACC and make sure this is reported to the Accounts Commission as a serious breach in ACC’s Corporate Governance.

        They then need to notify the Police with regards the (IMO) wilful fraudulent insurance misrepresentation which is on going and relative to the theft cover. I will assist the Police and matters needs to be brought to the attention of the relative Southern force for consideration of pressing charges under the Fraud Act 2006 which is the applicable piece of legislation for fraud charges in England.

  12. Very interesting article. Shows what takes to be a “whistleblower”
    Very brave of you Scott to take on the big boys and it looks like you almost there.
    Simon

  13. Awful conduct from Aberdeen Council, let’s hope this get’s the wider exposure it deserves and justice is served.

  14. Agree with the comments noted above by Colin, Andrew & others. I have worked in a number of large companies over my career and “whistle blowing” is taken very seriously in these organisations. It takes real courage to highlight errors or wrong doings especially when your livelihood may be at stake.

    Scott, I can fully understand your frustration and anger at the way you have been treated in this matter and I hope that you can meet your objectives in “flushing out” the wrong doings. It seems to me that you have moved some way to doing so through this Aberdeen voice page. Good luck going forward…

  15. I am a former client of ACC taken into care at birth did not have a childhood Aberdeen City Council has a very bad history going back to the old days of the County Council and Regional Council. Since they wrongfully judged my late mother may I say! they appear to be above the law all the time and could not careless who they abuse. For sure they never cared for me and many other children in its care, however many have asked what care did we ever receive.! Survivors of abuse will not forgive. Nor will I.

  16. How can we be sure that the museum collections have been the subject of a formal inventory and that items have not disappeared . In addition the recent decanting of the art collection to a ‘safe place’ during the ongoing works at the Gallery must have considerably increased the risk of fire , theft or damage .
    Did the council take out a ‘special’ policy to reflect this , I wonder ?

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