The state's corruption watchdog has found that four individuals - Nicholas Petroulis, Despina Bakis, Debbie Dates and Richard Green - engaged in serious corrupt conduct through a dishonest scheme involving the false sale and development of $12 million worth of Aboriginal-owned land across the Lower Hunter.
The NSW Independent Commission Against Corruption released its long-awaited report Investigation into dealings involving Awabakal Local Aboriginal Land Council land (Operation Skyline) on Wednesday.
In addition to corruption findings, the commission also said consideration should be given to the prosecution of former assistant tax commissioner Mr Petroulis, solicitor Ms Bakis and former deputy chairman Mr Green who the commission said had collectively derived more than $1 million in benefits from the scheme, which operated between 2014 and 2016.
Operation Skyline commenced public hearings in March 2018 and last heard evidence in November 2019. Thirty eight witnesses appeared before the commission.
The scheme involved Mr Petroulias falsely representing that a company he controlled, Gows Heat Pty Ltd (Gows), had an option to purchase five Awabakal Local Aboriginal Land Council properties in Newcastle and Lake Macquarie that it could on-sell to another party.
To provide credibility for this representation, Ms Bakis prepared false contractual documents between Gows and the land council.
She also had an undeclared conflict of interest in that she was engaged as the solicitor for the land council, through her legal business, Knightsbridge North Lawyers, while also representing Gows.
Mr Petroulias' conduct included improperly altering land council board meeting minutes and participation in preparing the sham agreements.
Gows' purported option was "sold" to a third party, the Sunshine Property Investment Group Pty Ltd (Sunshine), for more than $1 million.
While Sunshine had been informed that the bulk of the money would go to the land council, all of the funds went to Mr Petroulias, Mr Green, and Ms Bakis.
Mr Petroulias ultimately received over $600,000, and Mr Green and Ms Bakis received financial benefits totalling $244,000 and $179,000 respectively.
This "sale" breached multiple requirements of the Aboriginal Land Rights Act 1983.
In addition, Mr Green and Ms Dates, who was the land council's chairwoman at the time, signed the contractual agreements with Sunshine on behalf of the land council despite lacking the authority to do so. Other land council board members, staff and members were not aware of this transaction.
The commission found that Mr Green, Ms Dates, Mr Petroulias and Ms Bakis "knowingly participated in a dishonest scheme" that involved Mr Green and Ms Dates acting contrary to their public official duties and involved the purported sale and/or development of properties owned by the land council as a means to wrongfully confer a benefit on Mr Green, Mr Petroulias and Ms Bakis.
Their conduct included multiple attempts to sell significant land holdings of the land council, the falsification of land council records, the improper creation of land council records, unlawful land dealings involving land council property, the purported entry by certain land council board members into unlawful agreements.
The commission described the evidence of Mr Green, Ms Dates and Ms Bakis as unimpressive and lacking credibility.
"Ms Dates was an unreliable witness. When asked why she did something, for example, her repeated statement was that she was trying to "move the land council forward", yet she was not able to explain what that actually meant or why that would result from her conduct," the report said.
While the commission found that Ms Date's had acted corruptly, it did not say criminal or disciplinary action should be considered against her.
Mr Petroulias, who at one point argued that the ICAC did not have the jurisdiction to investigate the allegations, did not give oral evidence. Instead he provided a 212-page unsworn written statement that was accompanied by 450-page annexure.
"The commission has accepted the submission of Counsel Assisting that the evidence contained in the statement should be rejected, and only acted upon by the commission when corroborated by evidence expressly accepted by the commission or when it amounts to an admission against interest," the report said.
Mr Petroulias's health was cited as a reason for the significant delay in the inquiry's completion.
The commission found that pre-existing entrenched poor governance, failures to follow the Aboriginal Land Rights Act, and a breakdown of communication made the land council vulnerable to the corrupt conduct exposed by the investigation.
The commission made 15 corruption prevention recommendations. Some recommendations are specific to the Awabakal land council, but it recommends the NSW Aboriginal Land Council and the Aboriginal Land Rights Act registrar consider if they should be applied to all Aboriginal land councils.
In relation to Awabakal, it recommends that the land council provide at least seven days notice for all board meetings.
"If the board wishes to call an extraordinary meeting at shorter notice, a two thirds majority of board members must agree to the proposed date and time for the meeting and the land council must maintain a record of how and when it contacted or attempted to contact board members."
Awabakal acting chief executive Kumarah Kelly said the land council was, where possible, implementing the ICAC recommendations.
"It (the report) is what it is and we are looking forward to moving past it," she said.
"We have been handed recommendations and we are implementing those where the Land Rights Act allows us to. But at this point everything we can do we are doing.
Ms Dates and Mr Green are not presently affiliated with the land council.
NSW Aboriginal Land Council chairman Danny Chapman said the land council was reviewing the report.
"A framework of good governance and accountability is important for any Local Aboriginal Land Council," he said.
"We will continue to support and foster a culture and system of strong governance and improvement.
"NSWALC will continue to work with the Minister for Aboriginal Affairs and the Registrar of the Aboriginal Land Rights Act in relation to recommendations, including any that may have resource implications to NSWALC or the LALC network."
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