WA royal commission hear from former bureaucrat with friends at Crown

A West Australian bureaucrat sold a boat to a senior Crown Resorts employee, the WA royal commission into Crown Resorts heard this week.

The Australian Financial Review reports that the bureaucrat and Crown employee went fishing up to three times a week.

Former chief casino officer Michael Connolly appeared before the WA royal commission and defended his close friendship with three casino staff, including two directly involved in legal and compliance.

Mr Connolly told the royal commission that WA casino inspectors never looked for evidence of money laundering or criminal activity.

He also maintained that the granting of a visa to enter Australia was sufficient in terms of background checks on gamblers brought to Perth by junket operators.

Junket tours have long been linked to money laundering by organised crime syndicates, and the Bergin inquiry in NSW found that Crown facilitated money laundering through shell accounts linked to its Perth and Melbourne casinos.

Mr Connolly said he made a judgment call not to push for suspension of junket tours to the Perth casino, while investigations were under way in other jurisdictions.

In his role as a casino watchdog, Mr Connolly met regularly with Crown manager of legal and compliance Claude Marais and his colleague, Paul Hulme, to discuss regulation of the gaming house.

He also went on regular fishing and social outings with Mr Marais and Mr Hulme and told the royal commission they were good friends.

Mr Connolly told the royal commission he had declared the friendships and the boat sale to his boss at what is now the Department of Local Government, Sport and Cultural Industries and never let the relationships influence his decision making.

Connolly admits to fishing trips with Crown staff

In a witness statement to the royal commission, Mr Connolly said he sold a boat that he purchased for $8000 and then did up for Mr Marais for about $13,000, making an overall profit of $116.

Mr Connolly said he had gone fishing with Mr Marais up to three times a week for lobster since 2013.

Mr Connolly wore three hats as a casino regulator in WA and agreed under questioning at the commission that he had the power to influence regulation of Crown’s activities.

He was a chief casino officer, a deputy director-general at the department and deputy chairman of the Gaming and Wagering Commission (GWC).

Mr Connolly only stood aside as chief casino officer in February, when the media raised questions about his friendship and fishing trips with Crown staff.

In an email disclosing the boat sale to Barry Sargeant, the then director-general of the WA department responsible for oversight of gambling, Mr Connolly said he did not consider it an actual, potential or perceived conflict of interest.

He stated he received no benefit from the sale other than fair value.

Under questioning from counsel assisting the royal commission Patricia Cahill, Mr Connolly said he had regularly talked to both Mr Sargeant and his successor as director-general and GWC chairman, Duncan Ord, about fishing trips with Crown staff and they raised no red flags.

“I genuinely believe I haven’t allowed it to influence anything and there is no actual conflict of interest,” he told the commission.

“It is managing potential and perception. Now I have declared those friendships but I haven’t continued to declare them on any sort of ongoing basis.”

Mr Connolly and Mr Hulme were colleagues in casino regulation before Mr Hulme joined Crown.

Mr Connolly was also friends with Jon Nichols, another former regulator who left to join Crown and has since retired.

Under questioning from Ms Cahill, Mr Connolly agreed he had the power to influence or decide regulatory requirements for the casino and that Mr Hulme and Mr Marais were directly involved in liaising with him on having regulations modified or relaxed.

Asked if the man in the street would perceive a conflict of interest or if it had ever occurred to him that might be the case.

Mr Connolly said: “I thought they were sufficiently declared and known with the department. Certainly hindsight is a wonderful thing and I think that I would agree now that there would be a perception of that.”