A Sydney mayor has been suspended after the state's corruption watchdog found he engaged in "serious corrupt conduct" by receiving benefits from a developer.

The Independent Commission Against Corruption (ICAC) claims the City of Canada Bay Council mayor Angelo Tsirekas accepted at least $18,000 worth of overseas flights and accommodation from I-Prosperity as an "inducement or reward" to use his office to benefit its property interests in Rhodes.

The investigation found the company's agent Joseph Chidiac had been a close friend of the mayor for many years "frequently socialising with one another and travelling overseas on a number of occasions".

But it said Mr Tsirekas argued he did not have any private interests, even when I-Prosperity had planning matters before the council.

"Mr Tsirekas, in effect, denied knowledge of what Mr Chidiac did for a job," the ICAC said in a statement.

The commission recommended that Mr Tsirekas should be removed from civic office, saying that "prompt action is required in the public interest".

Following the release of the findings, Minister for Local Government Ron Hoenig said he had suspended Mr Tsirekas, with a view to his dismissal.

"I have reviewed the report released today by the Independent Commission Against Corruption," Mr Hoenig said.

"There are processes in place that would enable City of Canada Bay councillors to fill the position of mayor for the remainder of the current term of council."

Mr Tsirekas said his legal team was reviewing the findings.

In a statement, the former mayor said they were based on "errors of fact and law".

"The actions at the heart of the findings in respect to the Rhodes development have wrongly been attributed to me and City of Canada Bay Council, when in fact the responsibility for planning approval was solely within the control of the NSW government, not the council."

The "corrupt conduct" allegedly occurred between November 2015 to February 2019.

Mr Tsirekas was first elected mayor in 2002 but resigned in June 2016 to unsuccessfully contest the seat of Reid as a Labor candidate in that year’s federal election.  

ICAC found that during the federal election campaign period he received political donations from three individuals associated with I-Prosperity, each worth $10,000.

Mr Tsirekas was re-elected mayor in 2017.

Inquiry heard from 20 witnesses

A public inquiry was held over 30 days from April to July 2022, in which 20 witnesses gave evidence.

Decisions affecting the developer's property interests allegedly came before the Council during periods when Mr Tsirekas was mayor.

 

ICAC alleged Mr Tsirekas did not declare a conflict of interest with I-Prosperity when dealing with planning proposals.(Facebook: City of Canada Bay)

I-Prosperity has been acquiring properties at Rhodes since 2015, and in 2016 it lodged a planning proposal with the council.

Mr Tsirekas voted in favour of the company's proposal to build a 400-unit, 117-metre-high tower at Rhodes.

ICAC alleged "on no occasion when the planning proposal came before Council did he declare a conflict of interest".

Ultimately it was not approved by the state's planning department.

The investigation Operation Tolosa found he had unexplained wealth and rejected his evidence that the money came from his late father.

For example, ICAC claims he took 24 trips from 2015 to 2019, one of which was to China to attend the wedding of I-Prosperity director Zhouxiang (Harry) Huang.

Mr Tsirekas told the Commission he received funds or loans from Mr Chidiac and others.

The then-chief commissioner Peter Hall KC concluded the money was used to finance his overseas travel, including a trip to China and another to Lebanon, and was largely paid back after his property settlement in 2020.

Mr Chidiac said "Mr Tsirekas repaid about $9,000 after his divorce proceedings were finalised and after he became aware of the Commission's investigation".

The commission concluded Mr Chidiac also engaged in "serious corrupt conduct" between December 2015 to February 2019.

ICAC seeking advice over possible charges

ICAC is seeking advice from the Director of Public Prosecutions on whether it will prosecute, including whether any criminal charges can be laid.

In a statement, the City of Canada Bay Council said "it is aware that a report into Operation Tolosa has been published by the ICAC".

"We are unable to provide comment until the report has been reviewed."

I-Prosperity went into administration in 2020.

The ABC has contacted the administrators.

Mr Hoenig said the government would be considering the recommendations contained in the report and will respond in due course.

"The prosecution or otherwise of Cr Tsirekas and other people named in the report is a matter for the Director of Public Prosecutions," Mr Hoenig said.