Key points

  • City of Melbourne chief executive Justin Hanney solicited $35,855 in an online fundraiser through the Australian Sports Foundation. 
  • The money was raised to compete in the Sydney to Hobart race in a yacht he co-owned with Nick Foa, former head of transport services at Victoria’s department of transport.
  • The Australian Sports Foundation said it was unable to refund the money to the people who had donated it but would instead distribute the funds to provide access to sport for disadvantaged and low socio-economic groups.

City of Melbourne chief executive Justin Hanney has returned most of the money he raised to take part in a yacht race to the Australian Sports Foundation but his donors cannot be reimbursed because the foundation says the cash is non-refundable.

Hanney solicited $35,855 in an online fundraiser through the foundation to crew and equip a yacht he co-owned with Nick Foa, former head of transport services at Victoria’s Department of Transport, to compete in the Sydney to Hobart race.

City of Melbourne chief executive Justin Hanney has been unable to refund the money he raised to compete in a yacht race.Credit:Wayne Taylor

Two anonymous donations, worth $4500 and $9000, were made to Hanney via the foundation. The Melbourne City chief executive said he did not declare the fundraising to the council as he believed his interest in sailing and the race team were unrelated to his managerial role.

When the donations were first uncovered in July by the Herald Sun, Hanney said he would return the money and update his personal interests register.

“I will return the funds raised to the Australian Sport Foundation to remove any doubt about the seriousness with which I treat issues of probity and accountability,” he said at the time.

A spokesperson for the ASF said Hanney had transferred $33,752 to the foundation from his bank account to cover the money it had distributed in support of Hanney’s yacht race, which is the amount he received after the foundation had deducted fundraising administration costs.

The Sydney to Hobart yacht race. Credit:Mark Evans

“The funds have been received by ASF but will not be refunded to donors who supported Mr Hanney’s project, as donations are non-refundable,” the spokesperson said. “ASF will instead distribute the funds to provide access to sport for disadvantaged and low socio-economic groups.”

It is not clear whether the ASF is unable to refund the money, or whether it is choosing not to return it to the donors.

Hanney is the subject of an ongoing internal investigation. Foa resigned last week following a separate internal probe into his behaviour by the government.

The ASF was established in 1986 and is chaired by former Woolworths chief executive Grant O’Brien.

It is the only organisation in Australia that provides a tax deduction for sports donations. Previous board members include former Olympians Kieren Perkins, Herb Elliott and Rob de Castella and business heavyweights Lindsay Fox and Kerry Packer.

A spokesperson for the foundation said it had a range of measures in place to seek assurance that funds were used for appropriate sporting purposes.

“These include legally binding agreements entered into with all project owners under which they confirm that ASF project funds will only be used for permitted purposes, provision of written reports at the ASF’s request and checks carried out at the ASF’s discretion up to and including the audit of records and validation of documentation such as invoices and bank statements,” the spokesperson said. “Mr Hanney’s project had complied with all requested obligations prior to its closure.”

However, the foundation is implementing stricter requirements following the fallout from Hanney’s fundraising.

Justin Hanney’s fundraising page on the Australian Sports Foundation’s website to raise funds for the yacht he co-owns with Nick Foa.

“The ASF constantly reviews its rules and processes, and in light of issues raised by this matter we will review the need to include a requirement for individuals in receipt of ASF project funding to ensure they meet any personal/professional disclosure requirements related to their employment,” the spokesperson said.

Acting Lord Mayor Nicholas Reece declined to comment on whether Hanney had refunded the money to the people who had donated it and how he could refund money to donors who were anonymous.

“City of Melbourne councillors have established a process of review and referred the matter to the CEO Employment Matters Committee to undertake that review,” he said. “The committee’s review is underway and will report to council as soon as practicable.”

The committee was expected to report on its findings by the end of August and Reece declined to comment on the time taken to conduct the review.

As chief executive, in line with the Local Government Act, Hanney is required to submit a personal interests return twice a year, disclosing a variety of potential conflicts of interest.

Hanney’s personal interests return published by the City of Melbourne has not been updated since May.

A spokesperson for the council said the register was updated in May and this month, but the most recent update would not be published until October or November.

Professor Spencer Zifcak, chair of integrity lobby group Accountability Round Table, said Hanney should have declared the gifts received through the fundraising campaign.

“Senior public servants are required to declare financial donations pursuant to strict codes of conduct,” he said.

Zifcak said it was irrelevant whether these donations were made to them in a public or private capacity.

“It is not difficult to imagine that a senior public servant may be improperly influenced in the conduct of their public duties by donations made to them for ostensibly private purposes,” Zifcak said.

“In this situation, there does not appear to be any suggestion of corruption. But if the two individuals involved breached the ethical codes governing their employment, they may have engaged in misconduct in public office. That is a serious matter.”

Hanney did not respond to requests for comment.

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