Two councillors censured for failing to declare financial interest in SLMG

Two councillors have been censured by the Standards Commission for failing to declare their tiny financial interest in the Shetland Livestock Marketing Group when they pushed for it to receive a council grant.

Farmer Jim Budge and crofter Addie Doull avoided being suspended for what their lawyer Chris McDowell described as a technical breach of the councillors’ code of conduct. Instead, following a hearing in Lerwick today, they received the lightest punishment that the commission can mete out.

Mr Budge and Mr Doull face a substantial bill for the legal representation they have received from Mr McDowell during the 16 months since the complaint was lodged against them by former council employee Michael Peterson.

The two councillors hit out at the anonymous people behind his complaint, which Mr Budge described as one of the saddest aspects of the affair. “There’s somebody out there who is not prepared to put their head above the parapet,” he told reporters afterwards.

Neither councillor would speculate as to their identity but SLMG and other elements of the agricultural community have been engaged in a feud in recent years, reaching a climax last year after a new slaughterhouse was proposed next to a housing estate in Scalloway.

When the commission’s judgment on Mr Budge and Mr Dowle was delivered the chairman of the three-strong hearing panel, Okain McLennan, said their failure was a serious matter that undermined public confidence and trust. However the panel was satisfied their actions had not been wilful and deliberate but down to “neglect and an error of judgment”.

He said the two men had accepted responsibility for the breach and apologised. They had acted in good faith when taking part in the debate in January last year but should have withdrawn from the meeting during the discussion, which was what councillor Bill Manson did because he was a director of SLMG at the time.

The council did not escape criticism by the commission. It called for the local authority to take a more disciplined approach in its dealings with organisations which it mistakenly regarded as “a form of public service vehicle” doing economic development work on its behalf. This led to assumptions that there could be no conflict of interest.

The chief investigating officer Stuart Allan concluded: “A more disciplined approach needs to be taken, not least because … in the absence of transparency about the discharge of different roles by councillors, members of the public will inevitably be sceptical about their motivation.”

The outcome of the investigation is expected to result in clearer advice on conflicts of interest being issued to all councillors, not least to the many who have crofting interests.

Mr Budge and Mr Doull were reported to the Standards Commission in March last year following their behaviour in a meeting of the council’s development committee in January. It discussed a request for a £25,000 grant to the struggling SLMG to allow it to pay for a business review and development plan.

SLMG is a co-op involved in running Laxfirth slaughterhouse, organising livestock sales and trying to market Shetland meat.

They both declared a non-financial interest but took part and voted in the debate. Mr Budge proposed the grant which in the end was halved to £12,500.

Part of Mr Peterson’s complaint alleged that both members had failed to declare a financial interest at the meeting even though they could gain personally if the group ever made a profit. He called their behaviour “brazen” – a description which was rejected by the commission.

It also emerged that not only had neither man gained from their years of involvement with the group and its predecessors, it had cost them money. Mr Budge had only used the SLMG slaughterhouse to kill two lambs and Mr Doull had never used it.

Mr Budge explained that his financial involvement in SLMG stemmed from the fund-raising done about 20 years ago to help set up the new Shetland Marts. The sale of shares raised £60,000 which later gave him a 0.51 per cent stake in SLMG while Mr Doull’s stake was 0.17 per cent.

Both councillors sought advice from the council’s monitoring officer Jan Riise some time before the debate with regard to their former roles as office-bearers of SLMG. But crucially they did not realise their actual membership of the group created an issue as well.

Investigating officer David Sillars said the problem might have been averted had they done so.

Mr Budge had not considered himself still to be a member because his subscription had lapsed. Both men thought they did not have a personal interest in SLMG because it was their firms that were involved with the group.

Mr McDowell said his clients’ breach had been entirely inadvertent. “They had not sought to be dishonest in any way,” he said. Rather, their failure was in not properly assessing “the remote prospect” that they might benefit from council help to SLMG.

The process from the complaint in March last year to the judgment has taken 16 months despite the relative simplicity of the issue and the fact that the investigation interviews were completed back in August. When it came to today’s hearing neither side called any witnesses and it took less than an hour to hear the case before the panel adjourned to consider their verdict.

Mr Peterson was not satisfied with the choice of punishment. He said: “Censure? Pah, you shake your head.”

During the investigation the issue of SLMG’s history of debt and the prospects of an abattoir being a financial success were discussed. When Mr Riise was interviewed he had said anyone who thinks an abattoir in Shetland could be viable would be viewed as “a stand-up comedian”.

Mr Peterson took exception to the jibe. He said afterwards: “The real comedians are councillors who believe that codes of conduct do not apply to them.”

Mr Doull said he did not think he was doing anything wrong at the time, believing that with his share in SLMG being less than 1 per cent it did not have to be declared. He had wanted to support SLMG in the debate, particularly when other councillors were representing those in the industry who were opposed to SLMG.

Mr Budge said if he had not taken part in the debate there would have been no representation that day from the South Mainland which is the most productive agricultural area. “I felt I would be failing in my duty to those who elected me to office,” he told the press afterwards.

Both men agreed that such complaints, now common to Shetland Islands Council, had become an occupational hazard of being a councillor but Mr Doull said the affair, far from putting him off, had made him more determined.

Mr Budge said he was glad the ordeal was over, having weighed on his mind for such a long time. Now they could get on with what they should be doing.

There was little public interest in the hearing at the Shetland Hotel with just two councillors – Iris Hawkins and Allison Duncan – listening in along with Mr Riise, Mr Peterson, the media and one other member of the public.