The NSW law enforcement watchdog has suggested police consider banning all officers from owning racehorses after finding former commissioner Mick Fuller should have declared his horseracing interests.
In a report tabled in NSW parliament on Tuesday, the Law Enforcement Conduct Commission (LECC) outlined how Mr Fuller breached conflict of interest rules, and reversed its earlier decision to clear him of any wrongdoing.
It also called on the new commissioner Karen Webb to clamp down on officer involvement in the corruption-plagued racing industry.
The LECC probe was triggered by an ABC investigation that revealed Mr Fuller failed to declare his racehorse shares while serving as the NSW Police commissioner between 2017 and January this year, and earlier as an assistant commissioner.
Mr Fuller owned the racehorses as part of a "punter's club" with senior police officers, alongside sporting personalities and businessmen, including two who became suspects in criminal investigations. One of those two was also awarded lucrative police contracts.
The reports led to the state government blocking the then-newly retired Mr Fuller from joining the board of the NSW horseracing regulator and promoter, Racing NSW.
The supplementary LECC report also raised questions about whether NSW Police have for years underplayed the seriousness of allowing officers to be associated with the corruption-plagued gaming and racing industries.
"There are enormous sums of money being wagered on the outcome of horse races," the LECC stated in its new report.
"It is a matter of record that corrupt practices, including race fixing and betting offences, have occurred in the horse racing industry. Criminal activities of various types have been associated with the horse racing industry."
The report says Commissioner Webb could consider either banning all police officers from owning racehorses or introduce more thorough controls on their involvement in the racing industry.
It states the ownership of racehorses exposes the NSW Police Force (NSWPF) to a risk of "reputational damage" at the very least.
"The risk … is elevated when senior officers of the NSWPF are involved in ownership of racehorses," it said.
The report also urges Commissioner Webb to tighten the force's conflict of interest policy to explicitly state horseracing and gambling are "high risk" industries for police officers.
Fuller 'erred' by not declaring shares, watchdog says
Under the current policy, all NSW Police employees are required to declare any private interests that could give rise to actual, potential or perceived conflicts of interest.
As commissioner, Mr Fuller was required to submit such a declaration at least once a year to the state government.
The ABC's investigation revealed he did not submit a declaration of interests while commissioner until 2021, his final year in the job and after he had given up his racehorse shares.
The LECC's initial investigation into the ABC's revelations — named Operation Kurumba — found in March that "the evidence does not support a finding of serious misconduct or any misconduct at all".
"There is clearly no substance in any of the allegations that have been made against Mr Fuller," the March report said.
The report said the ABC stories appeared to be the result of a "malevolent attempt to cause him harm" by "one or more … disaffected officers," who had left the NSW Police Force or were denied promotions.
"His bid to join the board of Racing NSW failed because of these allegations being raised," it stated.
"It raises a distinct possibility that these allegations were raised for that very purpose."
Six days later, the government announced Mr Fuller would jointly run an inquiry into the state's flood disaster.
He also secured a job as a partner with Australia's biggest consulting firm, PwC.
The ABC formally complained about the report to LECC's own oversight body, the Inspector of the LECC, stating the commission published adverse comments about its stories without offering the broadcaster a right of reply.
A review by the new inspector, Bruce McClintock SC, raised several concerns with Operation Kurumba in August, disputing its conclusion that there was no evidence of wrongdoing and suggesting the LECC reopen the investigation.
The new supplementary report by the LECC found the original investigation failed to consider whether Mr Fuller's racehorse ownership had the potential to, or could be perceived to, influence his decisions.
It also stated that the LECC's earlier criticism of the ABC's reporting was speculative and unwarranted.
"The Commission accepts that the [original] Kurumba report should not have expressed criticism of the media for raising issues concerning Mr Fuller, racehorse ownership and a possible conflict of interest," it said.
The new report accepted that the earlier finding that Mr Fuller had not committed any wrongdoing was incorrect.
"Mr Fuller erred in failing to declare his racehorse ownership," it says.
"The omission of Mr Fuller to make declarations in these years attracts criticism. This is especially so given his position as Commissioner of Police, the most senior officer in the NSWPF."
It noted the LECC is not empowered to make findings of officer misconduct and can only rule on serious misconduct.
The LECC stopped short of finding Mr Fuller had engaged in serious misconduct.
"This is not a case where Mr Fuller sought to keep secret his racehorse ownership," the new report stated.
"Mr Fuller had told the then-Minister of Police of his ownership of racehorses and this topic was also known to this commission in 2019."
The original Operation Kurumba report in March stated Mr Fuller verbally informed the then-police minister, David Elliott, of his racehorse ownership in 2019 and the minister "took the view that he was entitled to do so as a hobby".
That same year, the LECC had received a complaint regarding Mr Fuller's racehorse ownership but declined to pursue the matter.
In Tuesday's report, the LECC said it was irrelevant that an officer may consider racehorse ownership a hobby.
According to the Operation Kurumba report, Mr Fuller owned four horses between 2012 and 2020 in a punters club involving other police officers.
The LECC's supplementary report only investigated his part-ownership of one of those horses, Once Epona Time in 2019 and 2020, while he was commissioner.
Mr Fuller was questioned by the commission about his alleged failure to declare his racehorse ownership via syndicates earlier this year.
"Have I breached policy? Have I got it right every time? No, probably I haven't. Have I submitted every piece of paperwork on time? Perhaps I haven't," he said.
"But at no time, even [on] reflection, do I look at the way I handled myself with this and feel that I have breached policy or let [the people of NSW down] in terms of the decisions that, you know, I made to enter these syndicates.
"I have always acted with the highest ethical standards. I'm not suggesting … that I've got everything right."
Police subject to conflict of interests
In January, Mr Fuller retired from his $665,000-a-year role as the head of Australia's largest police force, capping a 34-year career.
The ABC asked Mr Fuller about his co-ownership of racehorses earlier this year.
"The presumption that a social syndicate is corrupt or necessary of declaration is equivalent to requiring declaration when joining a touch football team or a golf club, particularly if a developer was part of the club," he told the ABC.
"Anything less is derogatory to Australian Thoroughbred Racing."
In 2020, Mr Fuller reacted angrily when he was quizzed in NSW parliament by then-Greens MP David Shoebridge about his racehorse interests.
"Are you suggesting that people who own racehorses are not ethical?" Mr Fuller said.
"There are two rules: judges can own them and politicians can own them, but poor, battling police commissioners cannot do anything. I will just stay at home."
The LECC also disagreed with that assessment.
"It does not assist to compare the position of senior NSWPF officers with other categories of racehorse owners who lie outside the NSWPF," the supplementary report stated.
"Those persons are not subject to the conflicts of interest and secondary employment policies which apply to NSWPF officers. Nor are they members of the NSWPF whose officers are empowered to carry out statutory regulation and enforcement functions which affect directly the racing industry."
Commissioner Webb was approached for comment.
Mr Fuller did not respond to ABC questions.
