This dispute in Liverpool is interesting because it it not unique. I have heard of a large number of instances when Council Officers (and particularly senior council officers) have used the Standards Board as a threat against Councillors.
In at least three authorities the leader of the council has been removed from office for things which vary, but would not normally be judged as being corrupt.
In practise the whole system which involved sacking a Labour councillor for going out of the wrong door, sacking a Lib Dem Councillor for writing to an MP and suspending an independent councillor for being rude about officers undermines democracy.
Oddly enough MPs are allowed to be rude whilst councillors are not supposed to be rude however upset they are. With the Audit Commission applying tight constraints and targets on local authorities this government has massively undermined local democracy.
In a number of local authorities you end up with a situation in which there is a tension between the permanent staff who have their own agenda and that of the politicians who are there to hold the system to account and make it respond to the local citizens.
Another problem has been the need to declare invitations to events that you refuse. It is only supposed to involve events which cost more than £25, but on that basis rather than spend the time working out how much each event it I merely declare everything. This involves a large amount of work for absolutely no benefit.
Without question if someone offers a bribe it should be reported to the police, but if I am invited to a concert and don't go, I see no merit in reporting that.