ICAC Operation Navarra LIVE updates: Ousted Parramatta Council CEO Gail Connolly returns to stand for second day

As we hit a lunch break, here’s everything you need to know about the morning of evidence:

• Gail Connolly boasted with Pink Lady friends (who would soon become colleagues) that she had had three “resignations” – “all of which were not directly initiated by me” – in as many weeks as she’d worked there, in a series of texts aired at the commission.
• But the ICAC heard evidence that the “resignations” were, in fact, paid out as redundancies.
• Connolly said she didn’t need to tell councillors about the exits of senior staff because legislation only required that to occur if they were “appointments or dismissals”.
• Connolly said she soon became concerned that ex-staff, who had been paid out, were “leaking” information about their payout agreements to councillors. So she said she had council send out legal letters reminding those staff of their confidentiality rules.
• The early part of the morning was characterised by the many interjections John Hatzistergos made during Connolly’s evidence to “just answer the question”.

We’re going through some dense evidence about the circumstances that led to the exit of Justin Mulder, the former chief of staff at the council, who gave evidence earlier in the inquiry.

Connolly texted friend and colleague Roxanne Thornton that she had an “allergic reaction” to Mulder. Later, Thornton was made his manager.

And then Mulder left and stood for election on Parramatta Council. She heard from then-councillor Donna Wang that Mulder had been planning to run, according to texts aired at the commission.

She texted Liberal MP Mark Coure to ask for confirmation, she said.

Connolly is now being asked about her response to a misconduct investigation the Office of Local Government, the NSW council watchdog, was conducting into Connolly in 2024.

We heard earlier during these proceedings that the OLG had launched an investigation into Connolly’s potential failure to comply with the Local Government Act, including that she: restructured the council without approval; increased staff salaries for personal gain; wasted council funds; failed to consult councillors over dismissed or hired senior staff; misrepresented staff exits to the council; and actively withheld information from councillors.

In a written response to the OLG, aired in the commission, Connolly described the exit of Bernadette Cavanagh, the executive director of people, culture and workplace, as a “position made redundant”.

Davidson asked if that was accurate, given Connolly said it was being treated as a resignation.

The offices of the Independent Commission Against Corruption, for most of the year, are quiet. But during a public inquiry, its seventh-floor offices are flooded with lawyers, witnesses and curious members of the public.

When the ICAC goes to a break, everyone has to leave the hearing room – and there isn’t a lot of space to move around outside. A small group of couches is populated by members of the public. Connolly and her legal team move into a small meeting room off the side.

Many head out for a coffee or food and return via a fresh scan through the X-ray machine.

As the time to return approaches, a witness has to stand next to their seat until the commissioner invites them to sit, and reminds them that they are subject to the same affirmation or oath they were sworn in by. Connolly stood there for several minutes, with her arms crossed, staring straight ahead.

We’ve just returned to public session.

When Connolly heard from Liberal councillor Georgina Valjak and Our Local Community councillor Michelle Garrard that there were concerns about former staff “leaking” information about the contents of their private settlements with the council, she tells ICAC, she launched an investigation into the alleged leaks.

There was no “prima facie evidence”, Connolly says, that there were leaks. But the council then sent legal letters to every ex-staffer who had signed the payout agreement reminding them of their agreements:

We’re now on a morning tea break for about 20 minutes. Back soon.

Why didn’t Connolly consult with elected councillors about Cavanagh’s exit when section 337 of the Local Government Act requires them to be notified of the appointment or dismissal of senior staff?

“It wasn’t an appointment or dismissal,” Connolly says. “My thinking at the time was that it was being treated as a resignation but being paid as a redundancy. So the position continued to exist until the following February.”

Davidson asks if that was a failure to comply with the Local Government Act, and Connolly’s legal representative, Andrew Pickles, objects to the question. Davidson offers to rephrase it.

There’s a section in local government legislation that requires the local government minister to approve any termination payout to a senior staff member if that payout exceeds the value of their total salary.

Cavanagh, the HR boss who left with an agreed release, ended up with more money than that. Her payout was for 51 weeks (38 weeks of pay plus 13 weeks of special leave) but the payroll department kept paying a weekly payment in addition to that figure.

That meant the payout should have been approved by the minister, Davidson says.

Showed the payslips, Connolly says: “I was never aware of this.” It was a “typical local government stuff-up”, she says. “A standard bureaucratic mistake.”

Davidson asks: “Was she being paid through payroll to avoid hitting the ministerial scrutiny threshold?”

“No. She was being paid according to the deed,” Connolly says. “I have no idea what this payslip is.”

A frustrated Chief Commissioner John Hatzistergos has now interrupted the proceedings five times over Connolly’s answers. The latest is about the discussion she had with former HR boss Bernadette Cavanagh, whose position Connolly terminated in 2023 and who left with a deed of release.

Connolly says she offered Cavanagh a redundancy but had also heard rumours she had been head-hunted by a former council boss.

Hatzistergos: “Your evidence is that you wanted to offer an olive branch … now you tell us that you had heard that Mr [Brett] Newman [former chief executive up to 2022], who had worked with her … previously, been in discussions with her about a job with land titles, and yet, contrary to your earlier text message, your proposal [was] to make [her] redundant?”

Connolly: “Well, at that point in time I wasn’t sure whether it was going to end up as a redundancy or just a mutual agreement. That’s why I sent her off to negotiate with [industry body Local Government NSW] and Brendan Clifton … the nature of the exit.”

Hatzistergos is in a long discussion with Connolly about what is, exactly, a redundancy.

“3 weeks and 3 ‘resignations’ – all of which were not directly initiated by me,” Connolly texted friends and fellow Pink Ladies Angela Jones-Blayney and Roxanne Thornton, according to texts airing now at ICAC.

Then Thornton responded: “Coriander … that’s you!!”

What did Connolly think “coriander” meant here?

“I took it to mean you either love it or you hate it,” Connolly tells Joanna Davidson SC. “I’ve certainly been called a lot worse names starting with C than coriander.”

We’re about six minutes in and Chief Commissioner John Hatzistergos has already twice interrupted the proceedings to tell Connolly to answer Davidson’s questions directly.

And we’re live. Hearing begins.

(Reminder: you can watch the delayed live-stream here – but we’ll bring you all the most important bits here.)