A three-year inquiry into the Shire of Coolgardie has found "no evidence of systemic fraud, corruption or collusion" by councillors or chief executive James Trail.

Key points:

· There were 22 community members interviewed as part of the inquiry by the Department of Local Government

· The department says it found "no obvious suspicious financial activity" or breaches of tendering practices

· The probe examined claims that chief executive James Trail had overstepped boundaries and pursued his "own agenda"

In April 2020 the Department of Local Government, Sport and Cultural Industries started investigating the shire's operations under Mr Trail's leadership from 2016 to the present day.

The probe followed allegations Mr Trail used his position to benefit himself or another person by awarding council contracts.

The claims included alleged procurement irregularities and a failure to follow proper tendering processes.

But a newly-released 34-page report says investigators found "no obvious suspicious financial activity" or breaches of tendering practices.

It said investigators reviewed publicly available ownership records from the Australian Securities and Investments Commission (ASIC), and there was "no direct link observed between the vendors and shire employees".

The report said investigators "could not substantiate or identify any patterns of misappropriation of funds, possible illegal practices or collusion with contractors and tenderers by the shire administration".

Twenty-two interviews were conducted last year as part of the inquiry, including with Mr Trail, ratepayers and current and former councillors.

A review of credit card transactions noted that they "seemed appropriate" for the nature of the work being conducted.

 

James Trail speaking at the What's Down The Track business forum in Kalgoorlie-Boulder in November this year.(ABC Goldfields: Jarrod Lucas)

Claims of overstepping

Mr Trail has been chief executive at the Shire of Coolgardie since May 2017 after serving seven months as acting in the role.

In 2012 Mr Trail was dismissed from his position as chief executive of the Shire of Kalamunda for misconduct and was the subject of a Corruption and Crime Commission inquiry.

That investigation found he received undeclared gifts from a software company and had purchased products for the council beyond the approved financial limit.

According to the Department of Local Government's investigation, the criticism Mr Trail received from Coolgardie ratepayers stemmed from "the perception that he had overstepped his roles and responsibilities" and was "directing council to act". 

 

Shire of Coolgardie councillors speaking during a council meeting at Kambalda in 2021.(ABC Goldfields: Jarrod Lucas)

"One individual was of the belief that during council meetings, the CEO would direct council on how to vote," the report stated.

But the investigation concluded that the relationship and roles between the president, councillors and CEO were "clearly defined and appropriate".

"The councillors maintained that council were the absolute decision-makers and refuted the allegation that the CEO directs council to achieve his own agenda," the report stated.

"It was also evident … that the shire president and CEO have a robust and effective relationship that ensures the nexus between council and the administration is maintained."

 

There was significant community opposition to council's decision to build accommodation for workers in Kambalda.(ABC Goldfields: Jarrod Lucas)

Camp divided community 

The investigation identified the approval and construction of workers' accommodation in Kambalda in 2021 as a cause of significant angst within the community.

The shire borrowed $7 million from the WA Treasury Corporation to build the 500-bed camp, which was initially expected to cost about $11m, but that blew out to about $20m.

The level of anger surrounding Bluebush Village at Kambalda was revealed during councillor Rose Mitchell's interview with investigators.

She said she was aware that there had been threats made against Mr Trail, the report stated, which she felt was "unfair and unacceptable".

"Cr Mitchell did not like being called corrupt as a result of some elements within the community not agreeing with the decision of council to approve the workers' accommodation village," the report stated.

"She said that neither her or, in her opinion, any other council members had engaged in corrupt or inappropriate behaviour and always made decisions that benefited the community and ratepayers."

The report featured estimates that profits from Bluebush Village would surpass $3m within three years, enabling the shire to pay back the entirety of the loan within five years.

It concluded that the process followed for the workers' village was "consistent with the act and the shire's strategic objectives".

"The revenue generated from the workers' accommodation village will directly benefit the community, with the revenue not to be used to offset the shire's overheads or cost of administration," the report stated.

"The revenue will be used to maintain and enhance services, community programs, events and community infrastructure."

 

There was a protest at a council meeting in Kambalda in 2021 when the shire voted to build the camp.(ABC Goldfields: Jarrod Lucas)

Alleged altercation with councillor

During the investigation Mr Trail denied allegations he had a physical altercation with former councillor John Williams about a month before he resigned in January 2022.

The alleged incident occurred outside the Kambalda Recreation Centre on December 14, 2021 following a meeting with mining giant BHP, which Mr Williams claims he was excluded from attending.

"The CEO positioned himself to prevent Cr Williams from talking to the shire president and allegedly made intimidating and violent advances towards Cr Williams until the president had to ask the CEO to stand down at least three times," the report stated.

Mr Trail denied the allegation in his interview.

"He refuted the allegation that he was intimidating and violent towards Mr Williams and had merely got between Mr Williams and Cr Cullen to prevent him from being harassed further by Mr Williams," the report stated.

One of three recommendations in the report is for all councillors and staff to complete conflict of interest training and for a public register of the training to be maintained.

It also recommends the council's procurement and purchasing policy be reviewed and updated within six months.

Mr Trail has been contacted for comment.