Orange Local Aboriginal Land Council cleared of wrongdoing but will review its procedures
Orange Local Aboriginal Land Council (OLALC) ordered the review after allegations of misconduct were raised by members, which included nepotism and financial mismanagement.
In April, more than 40 people signed a petition of no confidence in executive staff and called for an investigation.
In response, the OLALC board ordered a review by commercial lawyer Reay McGuiness.
While the review has not yet been made public, in a summary given to council members and seen by the ABC, it has recommended a raft of changes the organisation could make.
The review summary said 35 members of OLALC were interviewed during the investigation, with thousands of pages of documents provided.
"The board has complied with its statutory obligations of disclosure to members … and I [Reay McGuiness] have seen no evidence that employees have been appointed to positions not on merit but because of family connections," the summary stated.
OLALC member Jason French said he and other members had no confidence in the review.
At the end of May, Mr French lodged an objection to the proposed review process on behalf of a cohort of OLALC members.
The objection letter, sent to OLALC, peak body NSW Aboriginal Land Council, and the registrar who regulates the organisation, described concerns about conflicts of interest and cultural inappropriateness within the review's process.
"We had a number of members sign a petition saying that they felt there was a lack of transparency in the process of selecting [the reviewer]," Mr French said.
Mr French said members did not receive a response.
"The members are speaking out, and they are basically disregarding it," he said.
Mr French said it should have been the regulator, the registrar, the NSW Aboriginal Land Council, or a forensic auditor appointed to lead the review.
"It was a pointless review. If they really wanted [to properly review the OLALC], they would have appointed someone [independent]," he said.
Mr McGuiness and OLALC chair Jamie Newman both declined to be interviewed by the ABC.
Mr Newman issued a statement that said the land council would implement all the review recommendations.
"Just meeting our statutory obligations is not good enough … we want to continually improve … implementing all the recommendations will help us do that," he said.
Mr Newman said the review was essential for self-determination and transparency.
"Self-determination isn't just about rights, but also responsibilities and accountability," he said.
Mr Newman urged members to accept the review's findings and get behind the purpose of the land council.
"Our land council plays a vital role in supporting the Aboriginal people of Orange, promoting economic development, and protecting culture," he said.
The summary of the review advised OLALC to improve its conflict resolution processes and the way it engages with its members:
"The board does not presently have suitable processes to ensure that members have adequate engagement, participation and consultation on key issues."
"The board should seek to have the member meetings either chaired or facilitated by an independent person with no existing connection to the OLALC and the Orange Aboriginal Community."
The review summary also suggested the registrar or NSW Aboriginal Land Council could be asked to appoint a conciliator to ensure members' meetings are civil and constructive.
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ABC News
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The report's author, Ali Noroozi, spent 10 years as the inspector general of taxation. Citing the ATO's internal data, he found that its so-called risk assessment systems were only marginally better than random selection. "They have certainly been on notice that their risk assessment tools could do better," Mr Noroozi told Four Corners. The tax office was slow to heed this warning, and then it also downgraded its assessment of external fraud risks from "severe" to "low" two months before the scam took off in mid-2021. It said the likelihood of risk had gone from "almost certain" to "rare". The tax office said it began building and updating new fraud detection systems even before the critical 2018 inspector general report. But the auditor general noted one of the ATO's new fraud detection systems ran a year late and was therefore not fully switched on until January 2022. At this point, it successfully detected the massive fraud, but it still took the tax office a further three months to launch Operation Protego. The auditor general found "the ATO did not have a procedure to respond to a large-scale external fraud event" like the GST scams. Watch as Four Corners investigates one of the most powerful and secretive institutions in the country, tonight on ABC TV and ABC iview. Tax experts said these processes need humans in the loop. "Before money goes out the door, particularly if there's been large changes in a taxpayer's details or accounts, that should be verified," said Karen Payne, who stepped down last year as inspector general of taxation. "Once upon a time, there was a desk audit when you first lodged your GST return to make sure you are carrying on a business that you can verify and these amounts that you're claiming are legitimate." As the Abbott government swept to power in 2013, the ATO was moving away from this model of human verification to an automated system. That would eventually see around 1,000 staff — or half the people in the division responsible for the GST — lose their jobs. "I'm not sure the ATO has ever recovered from that sort of drain of knowledge and drain of skill sets," said Stephen Hathway, a liquidator currently investigating a large-scale GST fraud. "The people [at the ATO] work really hard and diligently, but there just needs to be more of them. And there needs to be more regard to getting out there in the field and making those inquiries." While the ATO has claimed to have contained smaller-scale GST frauds as part of Operation Protego, it has struggled to stop loopholes being exploited by larger-scale scams. Stephen Hathway has seen this up close. He is currently chasing Nahi Gazal, who claims to be a wealthy Sydney property developer, but has been accused of masterminding a giant GST fraud. Gazal and his associates managed to squeeze more than $21 million out of the tax office in GST refunds. They allegedly used fake invoices to claim GST refunds for building projects that either did not exist or had been completed by other developers. Once again, the ATO did not bother to do even the most basic of checks. "It never had any legitimacy," Mr Hathway said. "There's nothing in it that ever demonstrates any act of commerce or enterprise. The whole set of transactions were completely and utterly made up, fraudulent, had no basis." By September 2023, the ATO had issued Gazal with a $44 million tax bill, including penalty interest. Four Corners can reveal that while the ATO was chasing Gazal for that money, it failed to detect that he was using a new string of companies to continue scamming the tax office. Mr Hathway has been funded by the ATO to pursue Gazal over this latest scheme, and has connected him to an additional 22 companies, which Mr Hathway said have fraudulently claimed another $25 million in GST refunds. Once again, Gazal claimed to be a property developer. "Not one bag of nails was bought from Bunnings," Mr Hathway said. But once again, the ATO did not check before paying out the GST refunds to Gazal's companies. Mr Hathway said the ATO never asked basic questions, like the address of the properties being developed, whether a development application had been approved, or to even look at a building contract. "I'm the liquidator after the event. And then when we're looking into the file, we find nothing," Mr Hathway said. Mr Hathway was not hopeful the ATO would be able to recover much of the money, and said there was nothing to stop someone else from doing the same thing. Karen Payne said the tax office needed to do better, as these frauds resulted in less money for essential services. "We should all care because it raises revenues that allow the government … to fund the services that we all benefit from … health, defence, security, infrastructure … it's pretty key part of our democracy." Watch Four Corners' full investigation into the tax system, No Return, tonight from 8:30pm on ABC TV and ABC iview.