Deputy lord mayor Declan Clausen is one of three Newcastle-based directors of a superannuation fund found to have misled and deceived members about its exposure to coal, gambling and Russia investments.
Cr Clausen was paid $98,707 plus $10,364 in superannuation last year to sit on the board of Active Super, which the Federal Court found had misrepresented its "green" credentials to members and potential members.
Cr Clausen is chair of the non-profit fund's audit and compliance committee and sits on its investment and risk committees.
The chair of the Hunter Medical Research Institute, Kyle Loades, earned $159,000 last year to chair the Active Super board, while Newcastle-based Professionals Australia trade union director Gordon Brock was paid almost $110,000 in remuneration and super as an Active Super board member.
The Newcastle Herald does not suggest Cr Clausen, Mr Loades or Mr Brock have engaged in any wrongdoing.
Active Super, formerly Local Government Super, was formed in 1997 to provide superannuation services to local government employees in NSW.
The fund holds $14 billion in assets and has about 89,000 members.
Its nine-member board includes two state Labor MPs, Member for Penrith Karen McKeown and government whip Nathan Hagarty.
Justice David O'Callaghan wrote in a judgement published last week that Active Super's website, reports and disclosure documents had committed to excluding investments in gambling, coal mining, Russia and oil tar sands.
Justice O'Callaghan found Active Super's use of words like "no way", "out", "not invest" and "eliminate" conveyed the unequivocal meaning that it did not invest in such entities, yet it held interests in gambling firms such as SkyCity, Pointsbet and Aristocrat Leisure, Russian oil and gas giant Gazprom and coal company Whitehaven.
Between 2021 and 2023 the fund held direct or indirect investments in eight gambling firms, nine Russian entities, three coal companies and five oil tar sands producers.
The court did not make specific findings against Active Super's directors.
The fund's Sustainable and Responsible Investment Policy, published on its website and referred to in the Federal Court judgement, says, in part: "The Board, via its nominated subcommittees, has ultimate oversight of responsible investment activities."
The Australian Securities and Investments Commission brought the case against Active Super after vowing to stamp out "greenwashing", which it describes as "the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical".
The corporate watchdog has also brought successful greenwashing cases against Mercer Super and Vanguard Investments in the past year.
The court is yet to rule on penalties and costs in the Active Super case.
Cr Clausen said he could not comment while the case was in progress.
The Herald approached Mr Loades and Mr Brock for comment.
An Active Super spokesperson said the fund had "cooperated with ASIC's investigation and welcomes increased scrutiny on ESG [environmental, social and governance] disclosure standards as being good for members, the super industry and the community".
"While a judgement has been delivered, the court proceeding is still on foot," the spokesperson said.
"We take these matters very seriously and are currently considering the judgement and our next steps."
