Secret favours greased Rocks deal

Andrew-KellyA lease for a multimillion-dollar waterfront building owned by taxpayers was signed over to a politically connected Sydney family after it retained a senior state government official in a secret arrangement.

The Kazals, a powerful family of eight brothers, took control of the lease over 100 George Street, in the heart of The Rocks, while secretly providing incentives to Andrew Kelly, the second-most senior official at the Sydney Harbour Foreshore Authority.

The waterfront property was the latest acquisition by the Kazals, who have built an empire stretching from Sydney to the Middle East, partly through their relationships with those in powerful positions.

The authority’s board created a storm of controversy last year when it agreed in principle to issue a lease to the Kazals without going to tender for what is potentially the most valuable property in The Rocks.

Now a Herald investigation has uncovered alarming information about their relationship with Mr Kelly and his role in finalising the deal.

It can be reported for the first time that the Kazals claimed Mr Kelly was one of their senior personnel for at least his final 12 months at the authority and that:

* The lease on 100 George Street was signed over to a Kazal company after Mr Kelly, while still an authority officer, went to the Middle East with Charif Kazal on a lavish holiday that included five-star hotel accommodation and a helicopter ride over Abu Dhabi;
* Mr Kelly received a second trip to Abu Dhabi with the Kazals four months before leaving the government’s employment;
* After he left in April 2008, Mr Kelly took up a full-time job in the Middle East with a Kazal-associated company, earning between $200,000 and $385,000 tax-free;
* The family has secured at least three other waterfront leases from the authority without going to tender;
* The state government has spent millions of taxpayer dollars on renovations to properties controlled by the Kazals.

Today the Kazal brothers are the dominant players in Sydney’s tourist hotspot, Circular Quay, and have connections with the ruling families of Dubai, Abu Dhabi and Libya.Andrew-Kelly
They first came to public attention more than a decade ago when they organised a series of camel races, including a high-profile event at Randwick Racecourse for which they were awarded a presidential order by the founder of the United Arab Emirates, Sheikh Zayed Bin Sultan Al Nahayan.

Since then, their empire has grown to include several restaurants, cafes and nightclubs and an international trading business.

The family is connected with a string of influential state and federal politicians.

In Sydney, the core of its business has been The Rocks where it controls several of the foreshore authority’s most exclusive properties. It also controls some of the retail space on the other side of the harbour in the Opera Quays building, where it owns several multimillion-dollar apartments.

After he was voted down as the president of The Rocks Chamber of Commerce, Charif Kazal last year set up a rival association which swiftly received $20,000 in funding from the foreshore authority.

It was only one of a string of dealings between the Kazals and the foreshore authority which has attracted attention.

The most striking was the manner in which a Kazal company, La Mela Pizzeria, was awarded an agreement in 2007 for the lease of 100 George Street without having to compete at a public tender. The authority relied on a probity audit undertaken by Deloitte in August 2006 which approved direct negotiations with La Mela without a tender.

Last year the Independent Commission Against Corruption told the authority ”corrupt conduct is not likely to have occurred

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