A Queensland charity claims it was blacklisted for government funding because it complained that a public servant said it was a waste to spend money on Aboriginal people “as it was clear most of them could not read or write”.

The Crime and Corruption Commission has found prima facie evidence of alleged corrupt conduct by three senior state bureaucrats involved in the case.

The Cairns-based charity Choice Australia Management runs programs for disadvantaged people, youth and the unemployed. Choice has won 270 government grants, including 55 consecutive grants from the state employment, education and training department.

But Choice alleges it has been rejected for funding by the same department consistently since 2011, after its chief executive, Todd Hartley, made a complaint about a public servant for making racist comments.

In documents filed in the Queensland district court, Choice is seeking more than $700,000 in damages for “malfeasance in public office”.

“[The public servant] said words to Mr Hartley to the effect that the department would not be wasting valuable monies on a group of Aboriginal, Torres Strait Islander and multicultural people as it was clear most of them could not read or write and it would be a waste of money,” Choice’s statement of claim alleges.

It also alleges the public servant told a subordinate to “make life as difficult as possible for Choice”.

And it details a series of alleged retaliatory actions against the charity. These include being told by the department that grant applications had “accidentally gone to the electronic junk mail folder”, despite evidence this was “false”.

Separate to the civil court case, Hartley contacted the CCC and made complaints about the actions of several public servants, who were alleged to have misused their authority and caused a detriment to Choice.

The CCC completed a preliminary investigation in June. It found that evidence against three bureaucrats, if proved, amounted to corrupt conduct.

The CCC was also asked to consider a complaint about the state’s attorney general, Yvette D’Ath, specifically that she failed to refer allegations of corrupt conduct between 2015 and 2017.

The CCC said that because complaints about D’Ath related to her official duties, and did not amount to criminal conduct, it did not have the authority to investigate further. Instead it suggested Hartley take his complaint to court.

“We are aware that some of your concerns relating to D’Ath may be facts likely to be heard before the district court of Queensland,” the CCC wrote to Hartley.

“The courts have a responsibility to hear and determine facts of law. For this reason some of your concerns about D’Ath may be better placed to be heard in a court of law. Should any adverse comments be made by the court in relation to your concerns, you may consider renewing your concerns about D’Ath to the CCC.”

In 2012 the department produced a report claiming the charity had not spent $209,000 from a $4.7m grant to to deliver employment and training to displaced people, and an environmental recovery program after tropical cyclone Yasi.

A subsequent independent audit, requested by government solicitors on behalf of the department, found that all grant money had been properly spent or committed.

Nevertheless, the department launched – then later discontinued – court proceedings against Choice seeking to recover unspent money.

The charity claims in court documents this legal action was an “abuse of process” and based on an “ulterior motive”.

In 2017 the communities, child safety and disability services department wrote to Hartley to say it intended to renew a service agreement with Choice to deliver youth services for another three years.

Hartley said this was effectively rescinded by the department in October 2018, 12 days after the charity acted to extend its right to serve the government with a statement of claim in the district court civil case.

Allegations against a senior bureaucrat in the child safety department, who is alleged to have “misused her authority to withdraw funding from Choice and ... to bully and harass Choice and ultimately cause a detriment to Choice”, were among those whose actions, if proved, were found by the CCC to meet the definition of corrupt conduct.

The CCC has referred those allegations to the department’s ethical standards unit.