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Doubts on key witness in ICAC probe

One of the main players featured in the latest complaint lodged with ICAC inspector Bruce McClintock SC is Gardner Brook, an investment banker with a colourful past.

Brook was one of the key witnesses at the ICAC inquiry known as Operation Jasper, which examined the manner in which the NSW government created coal exploration licences involving former politician Eddie Obeid, who is now in prison over an unrelated matter.

During Operation Jasper, NSW’s Independent Commission Against Corruption relied on Brook’s evidence and produced a report that impugned the way in which the former state Labor government had created the coal tenements covered by the licences.

In the report that went to parliament, former ICAC commissioner David Ipp said he formed a favourable impression of Brook. The material supplied to McClintock includes an extract in which Ipp writes: “Broadly speaking, the commission formed a favourable view of Mr Brook and his evidence; he gave evidence in a slow and careful way, and in a manner that was designed to be generally honest and accurate.”

The material that has now been provided to McClintock includes information about Brook that is less flattering.

This material is part of the transcript from a secret ICAC hearing in which Brook admitted making a series of false statements and to padding his CV.

The transcript shows he made those admissions while being questioned by ICAC’s former counsel assisting, Geoffrey Watson SC.

In 2012, when Brook gave this secret evidence, he was living in Singapore but returned to Australia to see his children. It was on one such trip that ICAC caught up with him at Brisbane airport and served him with a summons to give evidence.

The extract from this “compulsory examination” shows he agreed he had falsely claimed to have a law degree as well as a second degree from the Booth School of the University of ­Chicago.

The complaint points to the contrast with what happened when ICAC opened its doors for a public hearing: “During the public hearing, counsel assisting did not attack the credit of Gardner Brook in any way, shape or form,” it says.

It criticises former commissioner Ipp for not requiring counsel assisting to adduce evidence at the public hearing going to Brook’s credit. “Gardner Brook was a key witness. Evidence going to his credit should have been ­adduced during the public hearing to give lawyers for affected persons a proper opportunity to cross examine him as to his credibility,” the complaint says.

The Jasper report that praised the “generally honest” nature of Brook’s evidence made an immediate impact with the NSW government, led at the time by Barry O’Farrell.

Without waiting for ICAC’s case to be tested by the more ­rigorous justice system, the government accepted the commission’s recommendation and enacted special legislation expropriating coal exploration licences worth at least $300 million.

At the time of the expropriation, one of those licences had been held by Cascade Coal Pty Ltd — which is one of the parties that has lodged the latest complaint with ICAC’s inspector.

The other complainants are Cascade director John McGuigan, associated companies, and Richard Poole who was a founding investor in Cascade.

The NSW Supreme Court has already rejected the argument, in a case brought by the Obeids, that ICAC’s failure to disclose what Brook had said at his compulsory examination amounted to a ­denial of procedural fairness.

But this part of Cascade’s complaint proceeds on a different basis. It directly criticises Ipp for allowing Brook to give important evidence without details of his false statements being made known.

ICAC has declined to provide a response to this accusation. But Ipp has raised the law of defamation and warned against revealing details of the complaint.

In 2008 when Brook was introduced to the Obeids, he was senior vice-president of financial services firm Lehman Brothers and, according to the Jasper ­report, had been helping make ­arrangements for coal deals.

The complaint from the ­Cascade parties says Ipp permitted Gardner Brook to give damning evidence at a public hearing despite being aware of what had happened in private at the compulsory examination.

It says Brook was involved “in every aspect of the matter” from before expressions of interest in exploration licences were called up to June 2009, when an evaluation committee decided to grant the licences.

“His reliability as a witness was crucial to many of the factual findings. Commissioner Ipp accepted Gardner Brook as a credible and reliable witness,” the complaint says.

Brook featured in last year’s civil case in which the Obeids unsuccessfully argued they had been denied procedural fairness by ICAC and Ipp because of the failure to disclose matters going to Brook’s credit.

The judgment in that case, by the NSW Supreme Court’s David Hammerschlag, notes that Brook had been cross-examined as to his credit on matters that included “alleged substance abuse”.

That judgment says Brook was mentioned in the submissions to Ipp that had been made by ­Watson, ICAC’s former counsel assisting.

“He submitted that a corrupt conduct finding should be made against Gardner Brook, but stated that the commission could give special consideration as to whether Gardner Brook be referred to the (Director of Public Prosecutions), in light of the fact that he gave ‘basically honest evidence’,” Hammerschlag’s judgment says.

Last year, Brook made a memorable appearance in a cartel conduct case in the Federal Court. The respondents in that case ­include two of those who have lodged the current complaint with McClintock: Richard Poole and John McGuigan.

Judgement in the cartel conduct case is reserved.

But during the hearing, Federal Court judge Lindsay Foster halted proceedings for three hours after asking Brook if he was “having difficulty coping” or was suffering from “some sort of impairment”.

The judge stopped the proceedings so Brook could “get some sleep”.

After the High Court’s 2015 decision in Cunneen v ICAC, the commission had agreed that its corruption findings in the Jasper report against McGuigan and Poole had not been made according to law and were a nullity.

ICAC had based those findings on what it considered was an intention to hide the past involvement of the Obeids in the Mount Penny mining tenement.

Before the NSW Court of ­Appeal could issue orders giving effect to ICAC’s concession, the NSW government, led at the time by Mike Baird, rushed retrospective legislation through parliament validating the findings that ICAC had been prepared to ­abandon. The commission’s structure and procedures have since been changed.

Brook was one of the key witnesses at the ICAC inquiry known as Operation Jasper, which examined the manner in which the NSW government created coal exploration licences involving former politician Eddie Obeid, who is now in prison over an unrelated matter.

During Operation Jasper, NSW’s Independent Commission Against Corruption relied on Brook’s evidence and produced a report that impugned the way in which the former state Labor government had created the coal tenements covered by the licences.

In the report that went to parliament, former ICAC commissioner David Ipp said he formed a favourable impression of Brook. The material supplied to McClintock includes an extract in which Ipp writes: “Broadly speaking, the commission formed a favourable view of Mr Brook and his evidence; he gave evidence in a slow and careful way, and in a manner that was designed to be generally honest and accurate.”

The material that has now been provided to McClintock includes information about Brook that is less flattering.

This material is part of the transcript from a secret ICAC hearing in which Brook admitted making a series of false statements and to padding his CV.

The transcript shows he made those admissions while being questioned by ICAC’s former counsel assisting, Geoffrey Watson SC.

In 2012, when Brook gave this secret evidence, he was living in Singapore but returned to Australia to see his children. It was on one such trip that ICAC caught up with him at Brisbane airport and served him with a summons to give evidence.

The extract from this “compulsory examination” shows he agreed he had falsely claimed to have a law degree as well as a second degree from the Booth School of the University of ­Chicago.

The complaint points to the contrast with what happened when ICAC opened its doors for a public hearing: “During the public hearing, counsel assisting did not attack the credit of Gardner Brook in any way, shape or form,” it says.

It criticises former commissioner Ipp for not requiring counsel assisting to adduce evidence at the public hearing going to Brook’s credit. “Gardner Brook was a key witness. Evidence going to his credit should have been ­adduced during the public hearing to give lawyers for affected persons a proper opportunity to cross examine him as to his credibility,” the complaint says.

The Jasper report that praised the “generally honest” nature of Brook’s evidence made an immediate impact with the NSW government, led at the time by Barry O’Farrell.

Without waiting for ICAC’s case to be tested by the more ­rigorous justice system, the government accepted the commission’s recommendation and enacted special legislation expropriating coal exploration licences worth at least $300 million.

At the time of the expropriation, one of those licences had been held by Cascade Coal Pty Ltd — which is one of the parties that has lodged the latest complaint with ICAC’s inspector. The other complainants are Cascade director John McGuigan, associated companies, and Richard Poole who was a founding investor in Cascade.

The NSW Supreme Court has already rejected the argument, in a case brought by the Obeids, that ICAC’s failure to disclose what Brook had said at his compulsory examination amounted to a ­denial of procedural fairness.

But this part of Cascade’s complaint proceeds on a different basis. It directly criticises Ipp for allowing Brook to give important evidence without details of his false statements being made known.

ICAC has declined to provide a response to this accusation. But Ipp has warned against revealing details of the complaint.

In 2008 when Brook was introduced to the Obeids, he was senior vice-president of financial services firm Lehman Brothers and, according to the Jasper ­report, had been helping make ­arrangements for coal deals.

The complaint from the ­Cascade parties says Ipp “permitted Gardner Brook to give damning evidence where his credibility as a witness was, to the knowledge of the commissioner, very questionable given that by his own admission during the private hearing Mr Brook was a fraudster and a liar”.

It says Brook was involved “in every aspect of the matter” from before expressions of interest in exploration licences were called up to June 2009, when an evaluation committee decided to grant the licences.

“His reliability as a witness was crucial to many of the factual findings. Commissioner Ipp accepted Gardner Brook as a credible and reliable witness,” the complaint says.

Brook featured in last year’s civil case in which the Obeids unsuccessfully argued they had been denied procedural fairness by ICAC and Ipp because of the failure to disclose matters going to Brook’s credit.

The judgment in that case, by the NSW Supreme Court’s David Hammerschlag, notes that Brook had been cross-examined as to his credit on matters that included “alleged substance abuse”.

That judgment says Brook was mentioned in the submissions to Ipp that had been made by ­Watson, ICAC’s former counsel assisting.

“He submitted that a corrupt conduct finding should be made against Gardner Brook, but stated that the commission could give special consideration as to whether Gardner Brook be referred to the (Director of Public Prosecutions), in light of the fact that he gave ‘basically honest evidence’,” Hammerschlag’s judgment says.

Last year, Brook made a memorable appearance in a cartel conduct case in the Federal Court. The respondents in that case ­include two of those who have lodged the current complaint with McClintock: Richard Poole and John McGuigan.

Judgement in the cartel conduct case is reserved.

But during the hearing, Federal Court judge Lindsay Foster halted proceedings for three hours after asking Brook if he was “having difficulty coping” or was suffering from “some sort of impairment”.

The judge stopped the proceedings so Brook could “get some sleep”.

After the High Court’s 2015 decision in Cunneen v ICAC, the commission had agreed that its corruption findings in the Jasper report against McGuigan and Poole had not been made according to law and were a nullity.

ICAC had based those findings on what it said was an intention to hide the past involvement of the Obeids in the Mount Penny mining tenement.

Before the NSW Court of ­Appeal could issue orders giving effect to ICAC’s concession, the NSW government, led at the time by Mike Baird, rushed retrospective legislation through parliament validating the findings that ICAC had been prepared to ­abandon.

Chris Merritt

Legal Affairs Editor – The Australian

(WTF) – used with permission

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