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On Monday, June 28, following an investigation by the Public Services Ombudsman, the Adjudication Panel for Wales suspended former Caerphilly Council leader Dave Poole for a total of five months for four breaches of the Members’ Code of Conduct. With the full report now published, more details have been revealed.

Councillor Dave Poole became leader of Caerphilly County Borough Council in May 2017 following that year’s local elections.

He was previously the authority’s deputy leader and succeeded the late Keith Reynolds, who passed away the month before.

A councillor representing the Pengam ward since 2004, Cllr Poole’s promotion to the top job meant he was responsible for representing the council on the Cardiff Capital Region (CCR) City Deal – an economic development partnership of ten local authorities including Caerphilly.

In September 2017, the CCR cabinet agreed to buy the former LG Semiconductor site at Newport’s Imperial Park from the Welsh Government for £38.5m of public money, and lease the site back to Cardiff-based tech firm IQE. The aim of the deal was to create the world’s first compound semiconductor ‘cluster’, attracting other firms developing the technology and creating thousands of jobs.

Cllr Poole was a member of the CCR cabinet when the decision to invest the £38.5m was made.

The shareholding

On October 8, 2018, Cllr Poole attended a cabinet meeting of the CCR where he received confidential information about the level of profitability and productivity of IQE, following the use of public money to buy the site.

Contained in the confidential report for the CCR was an assessment that productivity was “significantly exceeding plan” and that a tipping point would be reached where the company would be profitable.

Also within the report was the opinion of investment consultants which stated: “Whilst IQE’s share price has dipped in recent months, we have been provided with evidence from analysts and the company’s chairman to suggest that the share price should increase strongly again.”

Two weeks later on October 22, 2018, Cllr Poole bought shares in IQE to the value of £2,034.55. He admitted to the Public Services Ombudsman that he bought the shares with a view to making a profit. Dividends paid to Cllr Poole to the value of £111.57 were reinvested in IQE and a further investment of £111.33 was made in May 2019.

The conflict of interest

According to the Adjudication Panel, Cllr Poole tried to change his council register of interests in January 2019 but was advised by Caerphilly County Borough Council’s Monitoring Officer and head of legal, Robert Tranter, that it was not needed because of the level of shareholding and that it was a business based outside of the county borough.

A meeting of the CCR cabinet was held on February 18, 2019, and Cllr Poole failed to declare an interest about his shareholding in IQE – despite the subject of the public grant being on the agenda.

However, at a subsequent meeting on April 29, 2019, Cllr Poole did declare an interest and left the room while discussion went ahead.

The deputy Monitoring Officer of Caerphilly then prompted Cllr Poole to update his register of interests which he did.

Another meeting of the CCR cabinet took place on June 10, 2019, and again Cllr Poole declared an interest. This interest was then discussed with the Wales Audit Office and the council’s Monitoring Officer on August 29, 2019.

The Wales Audit Office wrote to the council with concerns and on September 16, Cllr Poole referred himself to the Ombudsman for investigation and on September 20 it was announced he was resigning as council leader.

He sold his shares in IQE on September 9 for £1,244 – a loss of around £900 on his investment.

Caerphilly Observer has asked Caerphilly County Borough Council whether Mr Tranter has been spoken to or disciplined over the advice he gave and what steps have been put in place to prevent incorrect advice from being given.

A council spokeswoman said: “The council’s constitution and Member Code of Conduct clearly sets out, that it is the responsibility of the elected member to consider and thereafter disclose any personal interests. It is for Members to determine and balance any advice given by the Monitoring Officer or indeed any other statutory officer, against the specific details of the personal interest/s.

“A Member refresher training session has recently been carried out, and will continue at regular intervals, to remind Members of their responsibilities regarding declarations of interests.

“Following the publication of the report, the Chief Executive, Christina Harrhy, is considering the detail and will take appropriate action, if deemed necessary.”

The investigation’s findings

The Adjudication Panel, in its report, said it was “struck by the proximity of the dates of the meeting and the share purchase, October 8 and 22, 2018 respectively”.

It added: “IQE’s share price was likely to have seen an increase following an earlier than predicted achievement of profitability. The Respondent could have purchased shares at any point before October 22 to show a ‘vote of confidence’ in IQE, but only chose to do so once in receipt of that prediction.”

It also said it was noteworthy that Cllr Poole considered the purchase “unwise” because he was conflicted over future decisions regarding IQE “rather than because he ought not to have benefited from the contents of the confidential information that was seen”.

Cllr Poole was found to be in four breaches of the code of conduct: Bringing an office or authority into disrepute; using a position to secure an advantage; failure to disclose a personal interest; and not withdrawing from a meeting where there is a prejudicial interest.

The panel stated Cllr Poole was “an experienced council member and, as leader, had an influential position and was expected to have set the standards of conduct for the council. He had used confidential, price sensitive information to attempt to secure a personal advantage on the purchase of the IQE shares.”

Cllr Poole was suspended for five months and two months for the breaches which will run concurrently – so a total of five months.

He will not be able to claim his councillor’s allowance for the period – around £5,986 (the annual salary for a councillor is £14,368).

“No real insight into wrongdoing or acceptance of guilt“

Over the last 22 months or so, Cllr Poole has routinely been approached for comment over his resignation and the investigation and has not spoken to the press on the matter.

Cllr Poole was interviewed as part of the Ombudsman’s investigation and was sent a copy of the report on February 24 this year. He was asked to reply to the allegations by March 17, but he did not.

However, on May 4, Cllr Poole did contact the panel and apologised for the earlier failure and set out his position in the case against him.

He claimed that information about IQE’s £38.5m grant was already in the public domain – something the panel accepted – although information about its potential future share price was not.

The Adjudication Panel said Cllr Poole had, through the interview process, shown “no real insight into his wrongdoing and/or acceptance of guilt” and that in the “latter stages of the process leading to this decision, he had failed to engage with the Adjudication Panel”.

In an email to Labour group colleagues in October 2019, a month after his resignation as leader, Cllr Poole said they should consider his decision to step down as leader “a temporary one.”

But a source within the Labour Party told the Local Democracy Reporting Service at the time that the view expressed in an email was “not the view of the group”.