Sydney Harbour Foreshore Authority (SHFA) – alleged corrupt conduct concerning property leases and improper influence of SHFA officer (Operation Vesta)

Year: 2011 Status: Completed

The ICAC investigated an allegation that Sydney Harbour Foreshore Authority (SHFA) officer Andrew Kelly acted in conflict with his official duties when dealing with Charif Kazal, and members of the Kazal family, in relation to properties which were owned by the SHFA at 91, 99, 100 and 135 George Street, The Rocks, and leased by Kazal family businesses at a time when Mr Kelly was, or anticipated being, involved with Mr Kazal and members of the Kazal family in private business.

The Commission investigated an allegation that Mr Kazal sought to improperly influence the exercise of Mr Kelly’s official functions by holding out the prospect of Mr Kelly being involved with him and members of the Kazal family in private business.

In its report on the investigation, made public on 16 December 2011, the Commission made corrupt conduct findings against Mr Kelly and Mr Kazal. The Commission is of the opinion that the advice of the Director of Public Prosecutions should be sought with respect to the prosecution of Mr Kelly and Mr Kazal for specified offences. The ICAC has made four corruption prevention recommendations to help the SHFA improve the robustness of the decision-making process to make it difficult to inappropriately influence the process.


Findings of corrupt conduct

The Commission has found that Andrew Kelly engaged in corrupt conduct by deliberately failing to disclose a conflict of interest and continuing to deal with matters affecting Kazal tenancies.

Charif Kazal engaged in corrupt conduct by holding out the prospect of employment in the United Arab Emirates (UAE) to Mr Kelly and paying him $11,170 for his flight and accommodation expenses arising from a trip to the UAE in May 2007, with the intention that these would tend to influence Mr Kelly to exercise his official Sydney Harbour Foreshore Authority functions in a manner favourable to Kazal business interests.

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 ICAC is of the opinion that the advice of the DPP should be sought with respect to the prosecution of Andrew Kelly for the common law offence of misconduct in public office in relation to his failure to disclose his conflict of interest. The DPPs' advice not to proceed against Mr Kelly has been accepted by the Commission.

The ICAC is of the opinion that the advice of the DPP should be sought with respect to the prosecution of Charif Kazal for an offence under the Independent Commission Against Corruption Act 1988 of giving false evidence to the Commission that he never intended to settle Mr Kelly's accommodation account for the May 2007 trip. The DPPs' advice not to proceed against Mr Kazal has been accepted by the Commission.

Recommendations for disciplinary action

Andrew Kelly is no longer a public official. It is therefore not necessary to make any recommendation in relation to the taking of disciplinary or dismissal action.

Recommendations for corruption prevention

The Commission has made four corruption prevention recommendations to the Sydney Harbour Foreshore Authority as follows:

Recommendation 1

That responsibility, authority and accountability for heritage protection be located within a single, independent role with a commensurate level of seniority within the Sydney Harbour Foreshore Authority (SHFA).

Recommendation 2

  • That heritage considerations relevant to any decision on SHFA properties should record the factors considered and the reasons for decisions, and full transparency be given to both the matters considered and the reasons for the decisions.
  • That the SHFA includes heritage considerations as a standard component in all board papers and executive memoranda dealing with property and leasing matters. 

Recommendation 3

That the SHFA establishes a formal process that tenants are required to follow when applying for compensation on works they have carried out on SHFA properties (including a report prepared by suitably qualified professionals that documents the work undertaken, why it was necessary, and an itemised list of expenditure).

Recommendation 4

That where a recommendation to the general manager and board of the SHFA would provide a significant client benefit, a comprehensive written business case is to be provided to the general manager and board by the responsible director.

Implementation Plans

The implementation plan posted below has been provided by the Sydney Harbour Foreshore Authority (SHFA) 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.

Implementation plan

 

Final progress report

The progress report posted below has been provided by the Sydney Harbour Foreshore Authority (SHFA) 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.

Progress report


Media Releases Witness

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. 

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.

 

Filename File Size KB Date pp. Time
25-7-2011_Operation_Vesta_transcript_pp._00001-_00061_from_10305am_to_12.56pm.pdf 175 25/07/11 00001-_00061 10305am_to_12.56pm
25-7-2011_Operation_Vesta_transcript_pp._00062-00114_from_2.05pm_to_4.08pm.pdf 145 25/07/11 00062-00114 2.05pm_to_4.08pm
26-7-2011_Operation_Vesta_transcript_pp._00115-00179_from_10.10am_to_1.00pm.pdf 172 26/07/11 00115-00179 10.10am_to_1.00pm
26-7-2011_Operation_Vesta_transcript_pp._00180-00220_from_2.05pm_to_3.56pm.pdf 109 26/07/11 00180-00220 2.05pm_to_3.56pm
27-7-2011_Operation_Vesta_transcript_pp._00221-00289_from_10.09am_to_12.59pm.pdf 173 27/07/11 00221-00289 10.09am_to_12.59pm
27-7-2011_Operation_Vesta_transcript_pp._00290-00330_from_2.07pm_to_3.36pm.pdf 106 27/07/11 00290-00330 2.07pm_to_3.36pm
28-7-2011_Operation_Vesta_transcript_pp._00331-00382_from_10.05am_to_12.31pm.pdf 152 28/07/11 00331-00382 10.05am_to_12.31pm
28-7-2011_Operation_Vesta_transcript_pp._00383-00407_from_2.05pm_to_2.55pm.pdf 66 28/07/11 00383-00407 2.05pm_to_2.55pm
29-7-2011_Operation_Vesta_transcript_pp._00408-00478_from_10.07am_to_12.59pm.pdf 176 29/07/11 00408-00478 10.07am_to_12.59pm
29-7-2011_Operation_Vesta_transcript_pp._00479-00514_from_2.05pm_to_3.38pm.pdf 95 29/07/11 00479-00514 2.05pm_to_3.38pm
01-8-2011_Operation_Vesta_transcript_pp._00515-00543_from_9.33am_to_12.51pm.pdf 75 01/08/11 00515-00543 9.33am_to_12.51pm
01-8-2011_Operation_Vesta_transcript_pp._00544-00577_from_2.20pm_to_3.36pm.pdf 90 01/08/11 00544-00577 2.20pm_to_3.36pm
02-8-2011_Operation_Vesta_transcript_pp._00578-00642_from_10.15am_to_12.59pm.pdf 164 02/08/11 00578-00642 10.15am_to_12.59pm
02-8-2011_Operation_Vesta_transcript_pp._00643-00688_from_2.05pm_to_4.03pm.pdf 111 02/08/11 00643-00688 2.05pm_to_4.03pm
03-8-2011_Operation_Vesta_transcript_pp._00689-00755_from_10.08am_to_12.51pm.pdf 164 03/08/11 00689-00755 10.08am_to_12.51pm
03-8-2011_Operation_Vesta_transcript_pp._00756-00787_from_2.05pm_to_3.17pm.pdf 82 03/08/11 00756-00787 2.05pm_to_3.17pm
Exhibits Public notices