Prosecutors doubted evidence, key witness in Logan corruption case

A failed Crime and Corruption Commission investigation caused the collapse of Logan City Council, and is now being scrutinised by an inquiry. The watchdog stands accused of straying well beyond its role.

Aug 17, 2021, updated Aug 17, 2021
Crime and Corruption Commission chairman Alan MacSporran before a budget estimates hearing at Parliament House. (AAP Image/Dan Peled)

Crime and Corruption Commission chairman Alan MacSporran before a budget estimates hearing at Parliament House. (AAP Image/Dan Peled)

The inquiry is holding its first hearing today, with CCC chairman Alan MacSporran again seeking to justify the Logan council investigation to members of the Parliamentary Crime and Corruption Committee.

The Palaszczuk government was forced to sack the Logan City Council two years ago after a CCC investigation led to fraud charges against seven councillors and mayor Luke Smith. They were accused of conspiring to sack former council chief executive Sharon Kelsey, who claimed she was being targeted as a whistleblower who had made a Public Interest Disclosure (PID) warranting protection.

In April prosecutors dropped the charges against the seven councillors, with only Smith now facing trial on other matters. Kelsey also failed in her attempt to take action against the council in the Queensland Industrial Relations Commission.

The case prompted criticism of the CCC, and MacSporran, at a time when some stakeholders were calling for more independent safeguards against corruption and misconduct in Queensland. The Palaszczuk Government has backed MacSporran remaining in the role.

In its submission, released today, the CCC insisted no one had ever suggested “there did not exist a prima face case against the councillors, or that they should not have been charged”.

“Rather, the difference, which emerged only after the commencement of the committal, was whether the prospects of that were sufficient to justify continuing with the prosecutions,” the CCC argued.

According to the CCC, the DPP decided to discontinue the case – after four months of deliberations – due to the prosecutors’ concern with “credibility issues regarding Ms Kelsey and other Crown witnesses, and the ability to exclude innocent hypotheses about the reasons the Councillors voted to terminate Ms Kelsey’s employment”.

Counsel assisting the inquiry, Jonathan Horton QC, today said the decision was also based on the fact Kelsey had made a PID two days after council raised issues with her performance – something Horton said the CCC had always known.

But MacSporran told the inquiry Kelsey claimed she was being persecuted because she had previously met with him, some months into the job, as the CCC was finalising Operation Belcarra into the local government sector.

In its submission, the CCC maintained that “there was evidence not just that elected councillors had taken unlawful reprisal action against a public interest discloser, but that they had done so in the face of warnings from the Commission and then destroyed evidence that suggested they had used ‘WhatsApp” and other clandestine means to communicate about it”.

The inquiry will examine the claims made by Kelsey, the allegations against the councillors, the investigation, and, in particular, the CCC’s involvement with Kelsey’s QIRC application.

Horton said the inquiry would also hear from the Director of Public Prosecutions, Carl Heaton QC, on why the case was discontinued.

“The CCC disagreed with that decision then, and it seems continues … to do so,” Horton told the inquiry.

MacSporran said he had been pleased to meet with Kelsey in September 2016 – prior to her making the PID – because, as a council CEO, she had been proactive on matters of integrity. He did not take notes.

In the following months, the relationship between Kelsey and the council became increasingly strained and, on February 5, 2017, MacSporran said he received a “highly irregular, abusive, bullying” phone call from Local Government Association of Queensland chief Greg Hallam about MacSporran’s involvement with Kelsey.

The inquiry was initiated after a complaint from the LGAQ, which does not refer to the phone call in its submission. Hallam has announced his intention to resign in November after almost three decades in the role, and is currently unavailable to give evidence to the inquiry due to his involvement in a District Court defamation trial in Cairns.

MacSporran told the inquiry that on February 14, 2017, telephone intercepts picked up Hallam discussing their “head banging call” with Smith. He said Hallam and Smith discussed other matters, including Hallam’s relationship with former Brisbane lord mayor Jim Soorley.

The following day, MacSporran met with Kelsey to discuss her “situation”. Asked by Horton if Kelsey had sought the CCC’s support, MacSporran said “she did, she wanted to know whether we were supportive of what she was seeking to achieve in the commission and how we would be able to help her.”

MacSporran said the CCC had a statutory responsibility to support a public interest discloser, and he believed she had no funding for the QIRC action, whereas the council had insurance to support its defence.

“It wasn’t a level playing field,” MacSporran told the inquiry.

“No matter what you thought of her, she was a PID.”

Asked by Horton if the CCC had concluded Kelsey had a valid PID, perhaps through some “detached, healthy skepticism,” MacSporran said that was not always possible as such allegations had to be taken “at face value”.

“If you’re not seen to be protecting PIDs, you undermine the entire ability to have corruption reported and adequately dealt with by agencies such as ourselves,” MacSporran said.

MacSporran reiterated Kelsey had been “concerned by the corrupt conduct of the mayor, taking action against her because she had met privately with” MacSporran.

While the CCC did not join Kelsey’s action in the QIRC, MacSporran today said it had been a “hard decision”. He denied acting inappropriately in trying to assist Kelsey, including unsuccessfully lobbying the State Government to fund her legal fees, which Horton estimated at $2.5 million.

In his opening address, Horton said the nature of the CCC’s support for Kelsey in the QIRC, its lawfulness, and appropriateness, was a key issue for the inquiry. He said the evidence would show that CCC officials met with Kelsey and her lawyers and made “repeated expressions of sympathy and partisanship for her”.

MacSporran had asked staff to assist her, Horton said, and the inquiry would examine whether that included making available evidence obtained through coercive hearings for potential use in the QIRC action, and whether that was appropriate.

Lawyers for the former councillors, in a submission to the inquiry, argued the CCC – including MacSporran in various public statements supporting Kelsey – viewed itself “as investigator, prosecutor and judge”.

“That it considered it could be in any sense objective in its investigation given the partisan and aggressive position it had already taken is disturbing,” the lawyers wrote.

After the public hearings, the committee will examine the evidence and submissions and report their findings and recommendations to parliament by the end of November.

Lawyers for the former councillors – who have not ruled out seeking damages – have called for changes to emphasise that the CCC is “not permitted to disclose the fruits of its exercise of coercive powers for the purposes of assisting private litigants in their own civil litigation”.

The LGAQ wants the government to require that councillors only be suspended, due to being charged with a disqualifying offence, once they plead guilty or have been committed to stand trial. Horton has already accepted that Logan voters should have certain rights, in a democracy, with regard to who they elect to council.

John Mickel, the former Labor MP for Logan, who was also a minister and speaker, wrote in his submission that someone had to be held accountable.

“Logan City, the city that I was honoured to represent, had its democratically elected council put to the sword, the Councillors were destroyed, their reputations, income, respect were all caste into doubt. A new council, most of whom had no local Government experience and no corporate memory, was elected in its place and for what?”

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