"I write to express my dismay that the SMH website presently discloses the contents of the transcripts of intercepted telephone conversations involving Ms Cunneen," Mr Levine wrote in an email at 12.27pm to Damien Tudehope, the chairman of the parliamentary committee of the Independent Commission Against Corruption.

"Might I respectfully suggest that the Committee forthwith initiate an investigation as to whether the source is within the Parliament of NSW."

We know about Mr Levine's email because in addition to copying the email to Commissioner Latham, he also sent an unsolicited copy of the email to The Australian Financial Review.

Neither Mr Tudehope nor Commissioner Latham were aware of this, because Mr Levine had "blind-copied" the Financial Review, using "bcc" in the email header.

This email was received by The Australian Financial Review, after it was apparently BCC-ed From: David Levine Date: 12 February 2016 at 12:27 Subject: ICAC Committee-Operation Hale Report To: "damien.tudehope@parliament.nsw.gov.au" Cc: "meganlatham@icac.nsw.gov.au" - - - - - - - - - - - - - - - - - - - - - - - - - - Dear Sir I write to express my dismay that the smh website presently discloses the contents of the transcripts of intercepted telephone conversations involving Ms Cunneen. Might I respectfully suggest that the Committee forthwith initiate an investigation as to whether the source is within the Parliament of NSW. Yours sincerely, The Hon David Levine AO RFD QC Inspector of the ICAC GPO Box 5341 SYDNEY NSW 2001 T: 9228 5260 Unhappy about leaks Dear Sir I write to express my dismay that the smh website presently discloses the contents of the transcripts of intercepted telephone conversations involving Ms Cunneen. Might I respectfully suggest that the Committee forthwith initiate an investigation as to whether the source is within the Parliament of NSW. Yours sincerely, The Hon David Levine AO RFD QC Inspector of the ICAC GPO Box 5341 SYDNEY NSW 2001 T: 9228 5260 Australian Financial Review Interactive infographic Interactive infographic by Les Hewitt

The email copy to the Financial Review came with no previous arrangement for source confidentiality and appeared to be intended for publication, in an attempt to influence public opinion.

It's not known who else was on Mr Levine's blind-copy list, but the following day the Australian reported his demand to investigate politicians.

This is Sydney, where the paths of power are subterranean, labyrinthine and so very cloak and dagger.


Mr Levine had released a scathing report on Latham's investigation of Cunneen which was blocked by the High Court, and of her suggestion Cunneen face disciplinary action for leaking.

Former ICAC Commissioner Megan Latham was asked to apply for Commissioner's job but her critics on parliamentary committee hold veto on appointments. Daniel Munoz

He was particularly incensed that Commissioner Latham refused to open secret files to him. He read into this refusal a suggestion that he could not be trusted to keep a secret.

His sentiments were reported at length in the Australian.

ICAC suffered major blows to its public image from the controversial Cunneen investigation, Operation Hale.

The controversy largely ended with the publication of excerpts of the tapes on February 12, which appeared to clash with Ms Cunneen's long-held claims that it was merely harmless joking.

Barry O'Farrell's handwritten thank you note to AWH head Nick DiGirolamo for a $3000 bottle of wine. How will a new ICAC Commissioner rule fairly on his testimony about having no memory of the wine without having been present? ICAC exhibit

"My only reservation, just between you and me, is that, that naughty girl, had alcohol had, had oh no that's all right I can cover that," Ms Cunneen said in a call to a panelbeater.


"But she had drunk, she's on her P plates. But it had been some time ago which is why I sent her the message to start having chest pains and get the ambulance because it's bought her a few more hours. Just hoping it goes down to zero cause otherwise there might be complicated insurance issues."

For whatever reason, little more was heard of ICAC's injustices to Ms Cunneen. But it was Levine who appeared the major loser from the leaked transcripts, for the parliamentary ICAC Committee in effect dropped its hearings into his boots and all report on Hale.

Committee of ICAC critics

The parliamentary committee certainly had no reason to love ICAC. Its chairman, Damien Tudehope had seen his Right faction of the Liberal Party gutted by the investigation into breaches of electoral funding law which cost 12 politicians their careers.

Cunneen had attended a fundraiser for another committee member, Fred Nile, who was a vocal supporter for her cause.

Meanwhile, the senior Labor member of the committee, Ron Hoenig, who was mayor of Botany Bay council for 31 years to 2012, was forced to watch in March as ICAC examined claims that former chief financial officer Gary Goodman and other council staff made $4.2 million in fraudulent payments between 2009 and 2015.

There was no suggestion Mr Hoenig was aware of this.

At one point Mr Goodman described trying to track down waste and doubtful payments: "I'll never forget this, the mayor's office had five phones."


When he asked the office of Mayor Hoenig which four phones should be cut off, he said, "I was taken into [the council's general manager] Peter Fitzgerald's office about probably half an hour later, read the riot act, and he told me the mayor advised him to show me where the local [Commonwealth Employment Service] was."

Mr Goodman said travelling allowances at Botany council "was based on the Prime Minister's travelling allowances, plus for the mayor 150 per cent [markup]."

After counsel objected Commissioner Latham shut Goodman down: "Look, I get the gist, Mr Goodman. You're saying that there was general rorting, as far as you could work out, so you decided to take advantage of it yourself."

There was no allegation or suggestion that Mr Hoenig was involved in any corrupt or improper practice and he was not called to give evidence. He has said he will not comment on the inquiry until after the report is released.

Restructure plan came from Premier's Department

As the ICAC hearings continued in March, the ICAC committee's inquiry morphed into considering yet another restructure of ICAC.

And while Levine was asked for recommendations the critical move came on July 29 when the Department of Premier and Cabinet proposed, seemingly out of nowhere, that ICAC be restructured with three commissioners.

What the submission didn't spell out was that it was a way to force out Latham, before her term expired in 2019.


She would have to reapply to be one of the three commissioners, and the parliamentary committee packed with her critics had veto power on appointments.

Premier Mike Baird seemed to have grown suddenly tone deaf.

After two years of deft political management of ICAC issues in November he introduced the biggest change in ICAC's history without speaking to Opposition Leader Luke Foley first.

In email exchanges Foley had insisted that Latham's job be appointed chief ICAC commissioner.

A spokesman for Mr Baird said that Mr Foley had "discarded the support that Labor MPs gave to the Committee's recommendations" for political purposes.

The new laws were passed by both chambers 30 hours after they were first tabled, the first time in 27 years that a government made changes to the corruption body without bipartisan support.

Politically poisoned environment

It was difficult not to draw links with Latham's report on Operation Spicer, two months before, which exposed widespread abuser of electoral funding laws by former government members.


The move to force Latham out two months later "had the appearance of corruption", former commissioners claimed.

Latham had her critics, but Baird's move was an attack on ICAC itself, which "had the appearance of corruption", former commissioners claimed.

Most of all it looked like inept politics – handing Labor the opportunity to go to the next election claiming that the government had hobbled the state's corruption body.

It's difficult how the new commissioners will function in this poisoned political environment next year.

Unfinished business

The first test will be the unfinished investigations.

"Nothing in the legislation passed by Parliament prevents current investigations, including Operation Credo, from continuing under the reconstituted commission and being completed," the Premier's spokesman said, pointing to previous cases.

But that hasn't worked well in the past. In December 2013 Latham's predecessor Commissioner David Ipp, QC, presided over hearings into NSW State Emergency Service Commissioner, Murray Kear.


But Ipp's worsening health forced him to step down the following month. It was Latham who wrote the report on hearings where she had not been present.

Today little mention is made of Cunneen. Instead it is the report on Kear, which triggered a failed prosecution on charges he sacked a whistleblower, that ICAC's critics cite as the leading example of unfair treatment.

But having the report written by someone who wasn't there for the evidence was always asking for trouble.

This same problem will be writ large for Operation Credo. How will a new commissioner make sense of it?

The hearings into Australian Water Holdings in 2014 enmeshed former AWH chairman Arthur Sinodinos as well as forcing the resignation of Baird's predecessor, Barry O'Farrell, but legal issues have held up the release of any report.

There have been no proposed corruption findings against Sinodinos in Credo. But any assessment of his evidence at ICAC will require a ruling as to his credit.

It's the one area that a judge needs to hear the evidence. Courts of Appeal can overturn almost anything else about a court judgement, but findings of credit cannot be replicated.

Weighing the wine bottle


Similarly, how can any new commissioner write the Credo report, as the government is suggesting, without addressing former Premier O'Farrell's evidence about a $3000 bottle of wine he received from AWH founder Nick DiGirolamo?

To understand how that scene played out you had to be there. It is unfair to write about it otherwise.

If Credo report cannot be written, then there are doubts about Operation the Botany Council inquiry as well, where the same credit issues arise.

It's hard to see how a fair report can be written. Does this mean everyone gets a hall pass?

It gives every sign the government has not thought this through. It's a mess.

Behind Sydney's great feud: The plot to kill ICAC