Council repairs scandal men jailed for 13 years

An “unholy alliance” of council officials and contractors has been jailed for a total of 13 years – as a sheriff branded the men “kindred corrupt spirits”.

Charles Owenson and James Costello. Picture: Julie Bull
Charles Owenson and James Costello. Picture: Julie Bull

Charles Owenson, James Costello, Kevin Balmer and Brendan Cantwell were angrily condemned for their part in a long-running fraud scheme.

Former council officials Owenson and Costello took bribes from Balmer and Cantwell in exchange for repair contracts for publicly-owned buildings.

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Sentencing the four men to prison, Sheriff Michael O’Grady said their conduct was “the kind of deceit which eats away at public confidence in public administration in the most damaging way”.

Brendan Cantwell. Picture: Julie Bull

He told them: “For a period of almost five years you acted together in this unholy alliance, in effect stealing from and manipulating the public purse, almost at will.”

He jailed Owenson for four years and four months, while his former property care

services colleague Costello was ordered to serve three years and nine months.

Balmer and Cantwell, ex-directors of Action Building Contracts (ABC) Ltd, were handed sentences of two years and ten months and two years and three months respectively.

They were also banned from being company directors for the next five years – putting an end to Cantwell’s role at a city-based scaffolding firm.

A leading detective in the long-running case today welcomed the sentences, saying they were a culmination of more than two years of

painstaking detective work to bring the men to justice.

The four men concocted a fraud scheme in which work orders were falsely inflated by almost £70,000 to fund the bribes they paid officials.

On one occasion, Balmer added almost £1000 to a council invoice for materials and labour given to Costello for free, when the cost was put on a bill for works carried out at Duddingston and North Leith churchyards.

Cash would be handed over in envelopes and Owenson and Costello bought expensive cars – including an Audi and a Mercedes – in a futile attempt to conceal their ill-gotten gains.

The pair, who both worked in the now-defunct property care team, were also treated to around £30,000 of hospitality, including visits to lapdancing clubs and football matches.

Sheriff O’Grady told them: “This was a fully formed, considered and careful arrangement. It may not have been a work of criminal genius but it was far from spontaneous and makeshift.”

He said their breach of trust was all the greater given the strain on council finances while it tried to maintain vital services.

He told the court: “Every penny piece Owenson and Costello spent on their lifestyles and every bribe added to every contract by Balmer and Cantwell was a penny piece which might have been available to an old people’s home or a nursery or a community centre. And well you would know that.”

Earlier this week, Sheriff O’Grady listened to a lengthy defence mitigation, when Owenson’s defence solicitor advocate, Maurice Smyth, argued that his client had naively seen the £28,387 of cash bribes he took as a “thank you”.

Mr Smyth told the court: “He did not fully understand from the beginning that this was bribe money. That was not his view – he thought it was genuine appreciation.”

Sentencing 62-year-old Owenson, of Drum Brae Neuk, Sheriff O’Grady told him that his attitude was “nothing short of remarkable”.

He said: “You have displayed not a hint of regret or contrition and appear to consider that the financial benefit you received is a trifling matter and that the whole thing could have been prevented if your line managers had done their job properly.”

Costello, 44, of Crosswood Crescent, Balerno, pocketed £14,100 of cash bribes having earlier admitted offences under the 1889 Public Bodies Corrupt Practices Act and proceeds of crime charges alongside


At the height of its success, ABC Ltd was turning over more than £4 million a year and employed more than 70 staff.

From 2006 to 2010, 93 per cent of all contracts secured by the firm were for work carried out for the city council. Owenson allocated work orders to ABC Ltd valued at more than £870,000, while Costello handed out £620,000 of orders to the firm. Between 2005 and 2011, Owenson and Costello handled more than 1000 contracts worth almost £1.5m.

Balmer, from Tantallon Gardens, and Cantwell, of Bankton Gardens, both Livingston, admitted forming the fraudulent scheme. Balmer, 52, also pleaded guilty to obtaining £22,600 by fraud.

Proceedings under the Proceeds of Crime Act are expected to progress later this year, to deal with the £141,541 and £135,071 of dividends which Balmer and Cantwell respectively received between December 2006 and November 2010. Sheriff O’Grady told Balmer and Cantwell: “Public officials cannot be corrupted unless there is someone willing to corrupt them. If you were not in a position of trust yourselves, you were fully aware that Owenson and Costello were.”

The court previously heard that Balmer’s new employers were considering holding his job until he can return to work.

Until the ban was placed on him yesterday, Cantwell, 44, was a director of Action Scaffolding Contracts Ltd, which has an outstanding historic contract with the council for a property in Earl Grey Street. City chiefs have pledged to take legal action to bring the arrangement to an end.

Most of the group remained expressionless as they were led away from the dock by the prison officers, but Owenson turned briefly to smile at a friend in the public gallery.

Detective Inspector Arron Clinkscales, of Police Scotland’s organised crime unit, said the men were “less than co-operative” during the investigation.

He revealed that 24 detectives worked on the case on a full-time basis over two years.

He said: “They maintained their right to silence, so it was up to the police to prove the case. It was document driven – there wasn’t as much paperwork as we’d like.

“They made that much money that they had to get rid of it. It was obvious they were living beyond their means, and living an affluent lifestyle which they would never be able to afford. They were fully aware of their actions, and greed obviously prevailed.”


November 2010: Several council staff are investigated over alleged irregularities involving repair contracts within the council’s property conservation department, which was responsible for the statutory notice system on tenement buildings. One employee is suspended.

March 2011: Council pledges to carry out an independent investigation as five more staff are suspended.

June 2011: It is revealed that the property care department – which dealt with public contracts on schools, libraries, community centres, toilets and other public buildings – has been placed under investigation.

September 2011: Four more staff are suspended as police ramp up their own investigation.

October 2011: It is alleged that Colinton Mains Community Centre received massive bills for works never carried out. It was claimed that it was overcharged to the tune of £300,000.

December 2011: Four council workers are sacked in relation to the scandal. Independent surveyors are drafted in to investigate.

March 2012: Five people are sacked from the property care department.

June 2012: Fifteen people are charged by police in relation to fraud, corruption and money laundering offences.

January 2014: Eleven defendants appear in private at Edinburgh Sheriff Court in relation to the property care investigation.

May 2015: Owenson, Costello, Balmer and Cantwell plead guilty to corruption charges at Edinburgh Sheriff Court. Former council officers Martin Rennie and John Markham, and contractor Gordon McKenzie are cleared after their not guilty pleas to corruption charges were accepted. Another contractor, Gordon Campbell, had not guilty pleas to two charges accepted by the Crown the previous week.


CITY council chief executive Sue Bruce said: “We expect the highest standards from our staff, and where allegations are made concerning mismanagement or fraud we will investigate and take the strongest possible action.

“The management arrangements for this service have been reviewed and substantial changes have been implemented.

“It is important that the public have the utmost faith in the services we provide. The overwhelming majority of our staff are committed to making a positive difference to the lives of people in Edinburgh and don’t associate with this type of behaviour.”