Former CERA employees defend actions

CERA employees referred to the SFO say any fault in their actions is down to poor advice from their bosses.

Two former Canterbury Earthquake Recovery Authority employees referred to the Serious Fraud Office say any fault in their actions rest more with the poor advice given them by their bosses.

Gerard Gallagher and Simon Nikoloff along with Murray Cleverley were investigated by Solicitor-General Michael Heron QC, with the findings released on Tuesday.

Heron found Gallagher and Nikoloff had committed serious misconduct in relation to claims they set up a private company to take part in a property deal they also had a hand in from the other side of the table as CERA government staffers.

Heron said the parties dealing with the pair over the property in Christchurch's Manchester Street believed they were dealing with CERA employees.

The State Services Commission subsequently referred the pair to the SFO for investigation.

However, Gallagher and Nikoloff say their government bosses knew about their businesses and had failed the pair by not advising them about potential conflicts of interest.

"We maintain that the CERA legal team, leadership and CERA's external legal team were aware of what we were doing with our outside business interests," the pair said in a statement.

"We trusted (relied on) the people around us to provide the necessary advice."

"They chose not to advise us there was a potential conflict. We acknowledge we should have declared what we were doing in writing."

They also said Heron's report found they had integrity and that allegations of criminality were unfounded.

The State Services Commission says the third man, Cleverly, was not involved in the other two men's business operations but should have shown better care and judgement.