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Public servant tells Icac he would have raised grant concerns if he’d known of Berejiklian’s secret relationship

·6-min read

A senior public servant involved in drafting an “extremely unusual” submission for a grant at the centre of a corruption investigation into Gladys Berejiklian says he would have “absolutely” raised concerns about the funding if he’d known about her secret relationship with former Wagga Wagga MP Daryl Maguire.

On Monday Michael Toohey, a director in the office of sport, was the first witness to appear before the Independent Commission Against Corruption’s two-week hearings into allegations the former New South Wales premier “breached the public trust” by failing to reveal her relationship with Maguire. Berejiklian has consistently denied any wrongdoing.

A career public servant, Toohey told the commission about the “extremely unusual” process of preparing an urgent draft submission in just one day for the $5.5m given to the Australian Clay Target Association’s clubhouse and convention centre in Wagga Wagga in 2017.

Related: Why is Icac examining the public and private lives of Gladys Berejiklian?

Toohey described his concerns at being asked to prepare the submission by the office of the then minister for sport and current deputy leader of the Liberal party, Stuart Ayres, saying there was limited information, besides a “purported” and “deficient” business case prepared by a third-party company.

On Monday the Icac heard evidence that after the proposal was drafted it had been Berejiklian, then the state treasurer, who approved a funding submission to go before the government’s powerful expenditure review committee on 14 December.

Toohey told the Icac he had a number of concerns about the proposal, saying its economic credentials were “somewhat optimistic” and elements of the plan “didn’t stack up”.

He was not the only one to have concerns.

On Monday counsel assisting the inquiry, the barrister Scott Robertson, submitted that the office of then premier Mike Baird had raised concerns about why the submission was being “rushed”.

Toohey told the inquiry he had discussions with a senior official in the department of premier and cabinet who told him the premier’s office had queried why the funding submission “could not be delayed until the new year”.

He said he had a number of conversations with the official, and that he “agreed” with the official and “didn’t understand the reason for the rush”.

Despite that, the funding bid was eventually approved in December as a grant, though Toohey said he didn’t know what had occurred to assuage the premier’s office of its concerns.

He told the inquiry he learned about the relationship between Berejiklian and Maguire when it made the news last year, and if he had known about it he would have raised it with his superiors within the office of sport, or, ultimately, with the Icac itself.

“I would have expressed my concerns initially through the executive structure and into the ministers office to say I thought this was problematic,” he said.

“Why were we pushing a grant, an allocation of funds … based on such scant and inadequate information that didn’t meet the NSW government’s own standards of policies?

“I can’t see how it’s anything but a conflict of interest [I had the same] concerns raised by the premier’s office, at least as they were reported to me, like, what was the rush and why were we pursuing it on such a flimsy basis.”

Earlier on Monday the inquiry heard Berejiklian had told lawyers for the state’s anti-corruption watchdog she “didn’t know what to think” when she heard allegations her secret boyfriend, the former Wagga Wagga MP Daryl Maguire, had acted corruptly.

On the first morning of a two-week corruption inquiry into Berejiklian’s conduct, a short exchange between the former premier and investigators from the Independent Commission Against Corruption was played.

In the exchange, counsel assisting the commissioner, barrister Scott Robertson, repeatedly asked Berejiklian whether she suspected Maguire may have engaged in corrupt conduct after he gave evidence at a separate Icac inquiry in 2018.

Berejiklian repeatedly said she “didn’t know” what she had thought, telling Robertson she was “in shock” after that inquiry exposed Maguire’s attempts to broker property deals he had hoped to make money off.

“I was in shock, I didn’t know what to think, I didn’t have enough detail, I can’t remember what I thought at that time,” Berejiklian told Robertson during the private hearing held before her resignation in September.

“I couldn’t make any assumption at that stage. He was professing his innocence and saying it was a misunderstanding but I also knew given the dramatic way the information had been revealed and what it could mean, I wasn’t sure but under the circumstances given he was a parliamentary secretary I thought it was appropriate for him to stand aside.”

After Robertson repeatedly pressed her on whether she had suspicions that Maguire may have engaged in corrupt conduct, Berejiklian replied: “No.”

The exchange may prove pivotal. Icac is investigating whether during a six-year period between 2012 and 2018, the former premier breached the public trust by “exercising public functions in circumstances where she was in a position of conflict between her public duties and her private interest as a person” because of her secret relationship with Maguire.

At the heart of the investigation are two grants: the $5.5m given to the Australian Clay Target Association’s clubhouse and convention centre in 2017, and $30m for the Riverina Conservatorium of Music in Wagga Wagga in 2018.

But Icac is also investigating whether Berejiklian breached the NSW Independent Commission Against Corruption Act by failing “to report any matter that she suspected on reasonable grounds concerned or may concern corrupt conduct in relation to the conduct” of Maguire.

During his opening statement on Monday, Robertson told the commission that one issue in the investigation was whether it should accept her answer. If it didn’t, he said, the commission could consider why Berejiklian had not reported any suspicion to the corruption watchdog.

In his opening statement, Robertson said the evidence during the inquiry would show Maguire was “a strong supporter” of the two projects at the centre of the inquiry, and had “vociferously advocated for government support” for them, including directly to Berejiklian.

“We also expect the evidence to demonstrate that Ms Berejiklian made or participated in the making of decisions [that] advanced the building projects advocated for by Mr Maguire without disclosing to anyone within government she was in a close personal relationship with Mr Maguire at the time that she took those steps,” Robertson said.

He told the inquiry that evidence would be heard from public officials who would say that what they believed to be the premier’s personal support for the two grants had an influence over their conduct.

Robertson said “a number of public officials would have acted differently” if they had known about the secret relationship.

Berejiklian has consistently said she never revealed her relationship with Maguire because she did not believe it was of a sufficient level to warrant a disclosure, but in his opening address Robertson noted Berejiklian had previously made a number of disclosures including, on one occasion, that two of her cousins were employed by a government department.

Related: If Icac delayed its Berejiklian inquiry it wouldn’t be doing its job | A J Brown

Stuart Ayres is giving evidence in the inquiry this week but has not been accused of wrongdoing.

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