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Former minister and ex-LPMA chief corrupt, finds ICAC

Monday 12 December 2011

The Independent Commission Against Corruption (ICAC) has found that the former NSW lands minister, the Hon Anthony Kelly MLC, and the former chief executive of the Land and Property Management Authority (LPMA), Warwick Watkins, engaged in corrupt conduct in relation to a backdated letter that was used to claim authority for the purchase of property at Currawong.

In its report on the Investigation into the unauthorised purchase of property at Currawong by the chief executive of the Land and Property Management Authority, released today, the Commission finds that Mr Kelly created the letter which was later used by himself, Mr Watkins and the LPMA's then corporate secretary and chief financial officer, Robert Costello, to mislead public officials into believing the letter was genuine. Corrupt conduct findings are also made against Mr Costello.

The four former Unions NSW properties at Currawong, Pittwater, were purchased by Mr Watkins on behalf of the NSW Government from then owner, Eco Villages Australia Pty Limited. Contracts were exchanged for the $12.2-million purchase on 15 March 2011.

Mr Watkins claimed that a letter from then premier Kristina Keneally to Mr Kelly dated 25 February 2011 authorised the purchase of the site. While the Commission finds that the premier's letter authorised Mr Watkins to hold negotiations only, and did not authorise Mr Watkins to purchase the site, it nevertheless accepts that were the letter to be read without due care, a reader might regard it as ambiguous.

The Commission finds that Mr Watkins was not authorised to commit the NSW Government to the purchase of the Currawong site. Nevertheless, as the Commission finds that it was not established that Mr Watkins acted without an honest belief that he was so authorised, it does not find that he engaged in corrupt conduct by purchasing the land.

After the contract for purchase was executed and exchanged on 15 March this year, questions were rapidly raised about whether the purchase was authorised. On 17 March the then director general of the Department of Premier and Cabinet engaged the Internal Audit Bureau (IAB) to investigate Mr Watkins' authority to purchase the site. The director general stood Mr Watkins aside the next day and met with him that morning, where he made it clear he did not consider that the premier's letter of 25 February authorised Mr Watkins to purchase the land. Mr Watkins later contacted Mr Kelly and asked if he would sign a letter confirming their alleged understanding that Mr Watkins was authorised to purchase the Currawong property.

The effect of the backdating was that, according to the letter, the authority conveyed was given on 28 February (that is, prior to the exchange of contracts). The provision of the backdated letter to the IAB investigator resulted in the investigator finding that Mr Watkins was authorised to execute the contracts for the purchase of the site by the former minister.

The Commission is of the opinion that consideration should be given to obtaining the advice of the Director of Public Prosecutions with respect to the prosecution of Messrs Watkins, Kelly and Costello for various criminal offences.

The Commission held a public inquiry over 11 days in June and July 2011. The ICAC Commissioner, the Hon David Ipp AO QC, presided at the public inquiry, at which 21 witnesses gave evidence.

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Media enquiries: ICAC Manager Communications & Media Nicole Thomas 02 8281 5799 / 0417 467 801