Premier Mike Baird said the report raised some "very serious issues" which would be considered by the parliamentary committee on ICAC. The committee would also examine a separate report by the inspector, expected in early 2016, on the commission's conduct in past and current investigations and any limits or enhancements that should be made to its powers. He said the government supported a "robust ICAC" but "we also need to ensure that ICAC uses its extraordinary powers responsibly". Opposition Leader Luke Foley agreed the report raised "serious issues that should be examined by the Parliamentary Committee" and said Labor supported a strong ICAC. The report, released on Friday, reveals the commission launched an investigation into Ms Cunneen, her eldest son Stephen Wyllie and his girlfriend Sophia Tilley after a Commonwealth agency hand-delivered a letter to ICAC in June 2014 titled "DPP Prosecutor possibly involved in corrupt conduct".

It also reveals for the first time that Ms Cunneen was initially under investigation not only for allegedly advising Ms Tilley to feign chest pains after a car crash to avoid a police breath test, but also over whether she gave a "truthful account" of the accident to the Director of Public Prosecutions and its insurance agency. The car involved in the crash was leased by Ms Cunneen from the NSW fleet but was "100 per cent for private use". Ms Cunneen had denied any wrongdoing and the High Court ruled in April that ICAC was acting outside its powers in launching the investigation. The NSW Solicitor-General subsequently advised that Ms Cunneen should not face criminal charges on the basis of the evidence referred by the commission. Mr Levine said the mobile phones of Ms Cunneen and others were illegally seized by ICAC in July 2014 pursuant to a "notice to produce". In an apparent bid to correct that error, ICAC then applied for a search warrant to seize the phones while they were still in the watchdog's possession.

Mr Levine obtained the opinion of Sydney barristers Tom Blackburn, SC, and Peter Kulevski, who said the seizure of the phones was "unlawful" and the search warrant did not "retrospectively validate the earlier unlawful seizure". But ICAC said it did "not accept the finding", and it had the power under the ICAC Act to require a person to produce documents or things "at a time and place set out in [a] notice". Mr Levine also blasted ICAC for passing on to Ms Cunneen's boss, Director of Public Prosecutions Lloyd Babb, SC, text messages from Ms Cunneen's phone dating back to 2005. This was apparently done because a small number of the messages, to a friend of Ms Cunneen's working at The Daily Telegraph in Sydney, contained confidential information about a matter before the courts. "This is one of the more distasteful components of the whole affair," Mr Levine said.

ICAC said it had the power to refer to other agencies information which "might be relevant to the fitness of public sector officers to continue to serve or which might justify disciplinary action". Mr Levine also questioned why Ms Cunneen's husband Greg Wyllie was placed under surveillance in the early days of the investigation, saying it "does not seem warranted or justified". He took aim at the commission for circulating a media release stating it had referred material to the DPP to consider whether criminal charges should be laid. It was akin to an "indictment" and "it was, especially in the absence of any adverse findings, particularly unreasonable, unjust and oppressive". Mr Levine said Ms Cunneen and ICAC Commissioner Megan Latham, a former Crown prosecutor, had known each other professionally and personally for more than 25 years when the investigation was launched and ICAC should be sensitive to the fact or danger of perception of conflicts of interest. But ICAC said that, had Mr Levine given Ms Latham the opportunity, she would have "been able to comprehensively refute" claims that there was a close relationship between the pair.

Mr Levine said ICAC needed to display a "sensible consciousness of proportion" in deciding which matters to investigate. He said the allegations raised in the Cunneen inquiry were "neither serious nor systemic and at best could be described as trivial", although ICAC said "crucial evidence" could not be given to him. Ms Cunneen told Fairfax Media: "For myself it is pleasing that what I said from the start has been proved to be true but for Stephen and Sophia, they will be marked for life by these completely unfounded allegations. "This must never be permitted to happen to any other innocent family."