A former Willoughby City Council building inspector and development officer council could face criminal charges for exploiting his official functions to favour various business owners in the Chatswood area in return for cash, gifts, free meals, and free massages and sexual services.

In its report on the Investigation into the corrupt conduct of a Willoughby City Council officer, released today, the Commission Against Corruption (ICAC) found that Edward Karkowski engaged in corrupt conduct on numerous occasions and in various ways. These included failing to report to the Council that the Oriana Bath House was illegally operating as a brothel, because he was receiving free sexual services there, and advising applicants to submit false construction cost estimates in development applications, so that fees payable to the Council would be reduced, in return for free hospitality. Mr Karkowski also dishonestly submitted claims for overtime and accepted payment for those claims.

The ICAC is of the opinion that consideration should be given to obtaining the advice of the Director of Public Prosecutions (DPP) with respect to prosecuting Mr Karkowski for various criminal offences. The Council dismissed Mr Karkowski as a result of the Commission’s investigation, so it is not necessary to make any recommendation in relation to disciplinary action.

During the investigation, the Commission found that there were several factors that allowed Mr Karkowski to engage in corrupt conduct. Council and Mr Karkowski’s superiors placed a great deal of trust in him; he was allowed to exercise wide discretionary powers in relation to the assessment and approval of applications with little or no effective supervision.

The Commission found that other factors included lack of information to Council staff to enable them to accurately estimate the cost of construction work, and the practice at the Council for staff to accept gifts, benefits and hospitality.

The Commission held a public inquiry, as part of the investigation, over four days commencing on 7 March 2011. Commissioner the Hon David Ipp AO QC presided at the public inquiry, at which 11 witnesses gave evidence.