Police advised the city council's chief executive not to share sensitive information with Mayor Joe Anderson, a tribunal heard.
The information has been revealed in a judgement handed down by Judge Rachel Mellor, who presided over Nick Kavanagh's unfair dismissal case against the council. Nick Kavanagh was the director of regeneration at the city council for nearly a decade.
Mr Kavanagh was arrested at the Cunard Building by Merseyside Police as part of the force's Operation Aloft in December 2019. He was subsequently suspended from his job and was eventually dismissed in March 2021 following a council disciplinary hearing.