Council GM defends Holstein

Gosford Council's general manager Mr Peter Wilson has defended the council's overseas investments and also statements about them by the new Member for Gosford Cr Chris Holstein.

In a letter to Peninsula News submitted before the election, Mr Wilson said that Cr Holstein's statements that there had been no loss to Council as a result of the investments were factually correct at the time they were made in April 2009.

Cr Holstein's statements followed the collapse of Lehman Brothers in September 2008.

"Gosford Council did not realise any losses on its investments until September 2009," said Mr Wilson.

Mr Wilson was responding to a letter published in Peninsula News from former Gosford councilor Ms Debra Wales.claiming answers were still needed on the overseas investment "scandal".

He was critical of Ms Wales, stating that "Council commenced its Collateralised Debt Obligation (CDO) investments in 2002, at the time that ... Debra Wales was a councillor ... and should have been aware of these investments".

Mr Wilson said: "These investments continued until July 2007.

"At the time these investments were made, they were rated AA or above - which was comparable to or better than the four big Australian banks.

"There were numerous other organisations across NSW and Australia that invested in these securities - many other councils, universities, banks, superannuation funds, charities and not-for-profit organisations.

"The net return on investments for this investment portfolio since 2002 is $53.7 million.

"This represents a solid average return of 5.4 per cent over this period.

"Of the CDO's Gosford Council invested in, only one was a residential mortgage backed security.

"This was the Federation CDO, on which Council received a full return on its investment."

The full text of Mr Wilson's letter is printed on page 6.

Email, 16 Mar 2011 Peter Wilson, Gosford Council