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Joe Anderson’s arrest came as part of a long-running investigation into construction and development contracts in Liverpool.
The city’s mayor was questioned on suspicion of conspiracy to commit bribery and witness intimidation in the third wave of arrests linked to Merseyside Police Operation Aloft.
The investigation is the latest to be launched in response to allegations related to Liverpool City Council business activity or the city’s development scene.
From the work of the Serious Fraud Office to that of detectives in neighboring Lancashire, this is an overview of those investigations and an update on your position.
Operation Aloft
Force: Merseyside Police
Status: in progress
Mr. Anderson was one of five men arrested in connection with this Merseyside Police investigation in early December.
The 62-year-old said he was questioned for six hours and that he has cooperated, and will continue to do so, with detectives.
He has since stepped back from his role and said he will make a new statement after December 31, when the police make clear their intentions regarding the investigation.
The December 4 drama followed arrests in September this year, when four men and a woman were questioned on suspicion of conspiracy to commit bribes while police searched properties in Cressington, Knowsley Village, Downholland and Mawdesley.
ECHO understands that those arrests were in part related to a police investigation into a proposed training academy in the Kirkdale area.
Twelve months ago the investigation was first drawn to attention with the arrest of developer Elliot Lawless, linked to a billion-pound property portfolio.
Questions about two of his developments, Percy Street and Falkner Street, led to his arrest on suspicion of conspiracy to defraud, bribery and corruption.
The 32-year-old denies wrongdoing and has promised to guarantee the return of £ 345,000 seized from police records.
Liverpool Council Director of Regeneration Nick Kavanagh was questioned on suspicion of conspiracy to defraud and misconduct in a public office in connection with the same investigation.
He has not commented since his arrest, in which £ 3,750 was seized.
The Superior Court documents obtained by ECHO offered insight into the allegations at the heart of the operation.
They revealed: “The Merseyside Police Economic Crimes Unit is conducting an investigation into the sale by Liverpool City Council and its officials of land and buildings in the Liverpool city area.”
That element of the force’s investigation focuses on the purchase of 40-50 Percy Street and 53-57 Upper Parliament Street, at L8, and 68 Falkner Street, in the city center, “on what is supposedly a base unduly preferential “. .
Operation Sheridan
Force: Lancashire Police
Status: in progress
Anderson was interviewed under caution as part of this operation, an investigation into an alleged financial wrongdoing centered on Lancashire Council’s BT joint venture One Connect, the sister operation to the now-defunct Liverpool Direct BT deal.
Then-Liverpool Council CEO Ged Fitzgerald was arrested in connection with the investigation in 2017.
Fitzgerald, who resigned the following year, was questioned along with former head of the Liverpool Council’s BT joint venture, David McElhinney, and former city finance chief Phil Halsall.
All were arrested in connection with their time in positions on the Lancashire County Council.
But while the arrests, on suspicion of perverting the course of justice and intimidating witnesses, focused on activity in Lancashire, they have also led to scrutiny of jobs at Liverpool City Council.
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Fitzgerald initiated a failed judicial review into the Sheridan raids.
In his ruling, Lord Justice Gross highlighted how part of the investigation had been directed to Liverpool.
He said: “This underlying crime was in essence fraud and indeed corruption in the local government … what was said to be a case of ‘jobs for children’.”
It was said in the case that “Operation Sheridan had been expanded to include alleged criminality within Liverpool City Council and the Merseyside Pension Fund.”
Accountants Grant Thornton UK LLP have also been “unable” to issue certificates of completion for city accounts between 2015 and 2019 due to the investigation.
This week, it emerged that Operation Aloft activity meant that accounts would not be closed for the fifth year.
Grant Thornton’s Andrew Smith said: “Clearly, our report was released prior to Friday’s events [December 4]. What the report does not reflect is the work we will be doing now in response to the new information that came out on Friday.
“As mentioned in the report, our audit risk assessment identified the concerns arising from Operation Aloft, particularly around asset management, and we identified it as a significant value-for-money risk.
“We have already done additional work this year but, as the report says, and I will go into details later, we cannot conclude our work in this area. What this means is that we will not be able to certify the audit as complete until it is completed. those investigations and the facts are known.
“This, as you know, has been the case for the past four years due to Operation Sheridan, which of course is also ongoing.”
In August 2018, the Lancashire Police passed a dossier in connection with Operation Sheridan to the Crown Prosecution Service. The force said that the period of bail for the investigation of the men who had been arrested had been suspended as a result of sending the file.
Focus: Pinnacle Angelgate, North Point Pall Mall, and New Chinatown
Authority: Serious Fraud Office
Status: in progress
In January 2019, the Serious Fraud Office announced that it had opened a criminal investigation into an alleged fraud related to three real estate developments.
They were:
- Angelgate, Dantzic Street, Manchester – the development company is Pinnacle (Angelgate) Ltd
- North Point Pall Mall, 70-90 Pall Mall, Liverpool – the development company is North Point (Pall Mall) Ltd
- New Chinatown, Great George Street, Liverpool – the development company is Chinatown Development Company Ltd.
Pall Mall and New Chinatown were multi-million pound development projects that would have transformed the key gateways to Liverpool city center.
However, each project stalled and since then the sites have been sold to new developers.
(Image: Liverpool ECHO)
In an update to this investigation, published in July, it was stated: “The SFO case team continues to investigate this alleged fraud.
“Please understand that this is an ongoing investigation and, for legal reasons, we may not always be able to provide you with all the information you want. Investigations of this complexity can take a long time and we appreciate your patience.”
Investors in any of the three schemes were asked to complete an online questionnaire.
Focus: New Chinatown
Force: National Crime Agency
Unknown status
In the summer of 2017, the Liverpool City Council was said to have passed information to the National Crime Agency to investigate exactly what had happened to the New Chinatown development.
Deputy Mayor Cllr Ann O’Byrne revealed that the authority had contacted the National Crime Agency about the site, but said it could not comment further on what that information implied.
In response to this, a statement issued on behalf of North Point Global Group, linked to the scheme, said the company “had never engaged in any criminal activity” and had “written to the National Crime Agency accordingly.”
(Image: Colin Lane / Liverpool Echo)
In response to a Freedom of Information request on this matter, the council said it could not comment but stressed that “the issue of the referral was not any process involving Liverpool City Council, in particular any land acquisitions and that the advice to always cooperate fully with any law enforcement agency and respond to their requests. “
The NCA did not confirm or deny whether any investigation followed the report.
A council spokesperson said: “Liverpool City Council is not in a position to comment on any NCA investigation.”
Focus: fractional sales projects in Liverpool
Authority: Liverpool City Council
Status: COMPLETED
This was a project started by the city council after the fractional sales development model was linked to a number of troubled projects in the city.
The findings of the Fractional Investing Scrutiny Panel were released in the summer, two years after the panel was created.
He called for greater clarity on the relationship between developers and the local authority, and more transparency in the process of how it sells its land and buildings.
Split selling, where a construction project is financed by selling off-plan flats in advance before it is built, has become a common form of development in Liverpool.
Investors are promised “returns” in return, including interest on their investments and rental income, once the buildings are completed.
Many developments have been successfully built that way, but some high-profile schemes in cities like Liverpool have stalled.
A recent report from leading real estate agency City Residential said investors in Liverpool were becoming much more risk averse to this selling method, with the model “starting to have problems across the board.”
The report said there was “no known advice” to the public about the “high risk” involved in fractional investing, adding that it was “disturbed by the lack of coherent advice.” That was a “huge gap and a huge concern, not just in Liverpool but nationally.”
The panel made a series of recommendations, including a new approval process to ensure “transparency and scrutiny” in the sale of municipal land to developers.
Developers purchasing land in this way will only be able to use the fractional sales model “in exceptional circumstances,” he added.
It was also proposed that more financial details of the directors of the company be recorded.
More recommendations were included for greater clarity on the relationship between developers and the city council – “with the power of the city council to review appropriate work both during construction and when issuing a certificate of practical completion.”
A new code of practice was also suggested for all representatives and elected officials, particularly in relation to invitations from developers, contractors and investors to meet, sponsor, or represent the council at local, national, and international events.
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