NSW Maritime - allegations of corrupt conduct involving NSW Maritime officers (Operation Vargas)

Year: 2010 Status: Completed

The ICAC conducted an investigation into the conduct of Tonette Kelly, Manager Legal Branch/Acting General Counsel, and other officers of the Maritime Authority of NSW (NSW Maritime), including the alleged misuse of the resources of NSW Maritime for the benefit of Ms Kelly.

In its report on this investigation, which was made public on 1 September 2010, the ICAC made findings of corrupt conduct against Ms Kelly, Bonita (Bonnie) Dacombe and Nicholai Dacombe.

The ICAC has stated its opinion that the advice of the Director of Public Prosecutions be sought with respect to the prosecution of Ms Kelly for various offences and Mr Dacombe for giving false evidence to the Commission. The Commission has also made seven corruption prevention recommendations to NSW Maritime to help minimise or prevent similar conduct occurring in the future.

Findings of corrupt conduct

The ICAC has found that Tonette Kelly engaged in corrupt conduct in relation to: the extent of her secondary employment and use of NSW Maritime resources; her personal use of an online search facility paid for by NSW Maritime, the authority she gave for the payment of invoices for searches she made, and the preparation of two documents relating to that use; arranging for NSW Maritime to pay professional indemnity insurance on her behalf; and in the preparation of a reference for Nicholai Dacombe.

The Commission found that Bonita (Bonnie) Dacombe acted corruptly by engaging in secondary employment without approval. Nicholai Dacombe acted corruptly by providing false information to the Legal Profession Admission Board in his application for registration as a student-at-law.

Recommendations for prosecutions

The Commission must seek the advice of the Director of Public Prosecutions (DPP) on whether any prosecution should be commenced. The DPP determines whether any criminal charges can be laid, and conducts all prosecutions. The Commission provides information on this website in relation to the status of prosecution recommendations and outcomes as advised by the DPP. The progress of matters is generally within the hands of the DPP. Accordingly, the Commission does not directly notify persons affected of advice received from the DPP or the progress of their matters generally.

The Commission is of the opinion that consideration should be given to obtaining the advice of the DPP with respect to the prosecution of Ms Kelly for various offences including the common law offence of misconduct in public office in relation to several matters, and an offence of making a false instrument under section 300(1) of the Crimes Act 1900 (NSW). Certain matters, including the false statements of gross fee income for the purposes of public indemnity insurance and the preparation of a false or misleading reference for Nicholai Dacombe, have been referred to the Legal Services Commissioner.

The Commission is also of the opinion that consideration should be given to obtaining the advice of the DPP with respect to prosecuting Mr Dacombe for an offence of giving false evidence under section 87(1) of the Independent Commission Against Corruption Act 1988 in relation to conveyancing work done for Ms Kelly.

Tonette Kelly

Outcome of prosecution of two offences of giving false evidence at a public inquiry contrary to section 87(1) of the ICAC Act: pleaded not guilty; found guilty on 1 May 2013 on both counts following a hearing in the Local Court; sentenced to 12 months imprisonment to be served by home detention. An appeal against the convictions and sentence was lodged in the District Court. The appeal against the convictions was dismissed on 9 December 2013. On 24 February 2014, Ms Kelly withdrew her appeal against the severity of her sentence.

Nicholai Dacombe

Outcomes of prosecution for one offence of giving false evidence to the ICAC contrary to section 87(1) of the ICAC Act: pleaded guilty, convicted and sentenced on 7 February 2012 to imprisonment for a fixed term of four months. On appeal, the sentence of four months was suspended pursuant to section 12 of the Crimes (Sentencing Procedure) Act 1999.

Recommendations for disciplinary action

The ICAC is of the opinion that consideration should be given to the taking of action against Ms Kelly with a view to her dismissal. The Commission also states that Ms Kelly should be referred to the Legal Services Commissioner in relation to the preparation of a false reference for Mr Dacombe, and also for false statements of gross fee income for professional indemnity insurance.

Mr Dacombe is no longer employed by NSW Maritime so the issue of disciplinary action or dismissal by the agency does not arise. However, the Commission is of the opinion that consideration should be given to the taking of disciplinary action against Mr Dacombe by the Legal Profession Admission Board in relation to the false and misleading statements contained in his application to be a student-at-law.

The Commission is of the opinion that consideration should be given to the taking of disciplinary action against Bonita (Bonnie) Dacombe in relation to her failure to obtain approval for secondary employment.

Outcomes

Tonette Kelly

Ms Kelly was dismissed from NSW Maritime. The Office of the Legal Services Commissioner conducted an investigation into the matters referred to it by the Commission. The Legal Services Commissioner then commenced proceedings seeking to remove Ms Kelly's name from the roll of local lawyers. On 3 July 2014, by consent, the NSW Civil and Administrative Tribunal made orders that Ms Kelly is guilty of professional misconduct and that her name be removed from the roll call of local lawyers. On 27 November 2014, the tribunal published its reasons and the orders came into force on that date.

Bonita Dacombe

Disciplinary action was commenced against Ms Dacombe by NSW Maritime. Her resignation was accepted by NSW Maritime.

Nicholai Dacombe

The Legal Profession Admission Board resolved to hold an oral hearing in relation to the allegations referred to it by the Commission. No further action has been taken as Mr Dacombe is excluded from the Board's courses for other reasons.

Recommendations for corruption prevention

The ICAC has made the following seven corruption prevention recommendations to NSW Maritime to minimise or prevent similar conduct occurring in the future:

Recommendation 1

That all employees of NSW Maritime in a supervisory role undertake training (and refresher training) in the operation of policies on:

  • secondary employment, including guidance on the identification and management of possible conflicts of interest that can occur within secondary employment

  • use of public resources, including how to identify and manage possible conflicts of interest that can occur when using public resources for personal purposes

  • recruitment processes, including their obligations under the personnel policies of NSW Maritime and applicable circulars, and ministerial memoranda issued by the Department of Premier and Cabinet. Particular attention is to be given to the requirements of merit selection, disclosure of conflicts of interest, and impartial decision-making during recruitment of staff.

Recommendation 2

That all employees of NSW Maritime in a supervisory role ensure their staff understand their responsibilities in relation to the policies referred to in the previous recommendation.

Recommendation 3

That NSW Maritime include in its audit program an audit (by way of sampling) of segregation of duties to ensure there is no end-to-end control of financial approval processes. 

Recommendation 4

That NSW Maritime ensures that its Finance Branch is alert to the possibility of fraud and corruption, and takes steps to identify and report irregularities to the relevant general manager. 

Recommendation 5

That supervisors monitor staff and be held accountable for the consistent adherence by staff to the policies relating to secondary employment, personal use of resources, recruitment, and performance management.

Recommendation 6

That NSW Maritime includes each of the policies referred to in the previous recommendations in the audit program.

Recommendation 7

That NSW Maritime ensures that managers and supervisors understand their responsibilities in relation to performance management, and requires managers and supervisors to hold annual, formal and documented performance discussions with their staff.

Implementation Plans

The implementation plan posted below has been provided by NSW Maritime in response to the ICAC's corruption prevention recommendations. Its appearance here is for information only and does not constitute the approval or endorsement of the plan by the Commission.

NSW Maritime - Implementation plan

Progress Report

The progress report posted below has been provided by NSW Maritime in response to the ICAC's corruption prevention recommendations. Its appearance here is for information only and does not constitute the approval or endorsement of the plan by the Commission. 

NSW Maritime - Progress Report

Final progress report

The progress report posted below has been provided by NSW Maritime in response to the ICAC's corruption prevention recommendations. Its appearance here is for information only and does not constitute the approval or endorsement of the report by the Commission.

NSW Maritime - Final progress report

Media Releases Witness

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Download the Witness List (PDF)

Transcripts

View all transcripts associated with this investigation. The Commission makes every effort to post the daily transcripts of its public inquiries on its website by 8:00 pm each day when possible. If the Commission sits later than 4:00 pm, the daily transcripts, particularly the afternoon session, may not be available until the next working day.

 

Exhibits Public notices