The Independent Broad‐based Anti‐corruption Commission on Wednesday tabled a special report into Theo Theophanous, the father of sitting Labor MP Kat Theophanous.
After a three-year investigation, it found Mr Theophanous failed to declare he was lobbying for Australian Education City (AEC), the preferred developer of a proposed $31 billion project in East Werribee.
The project to turn the government-owned land into an education, research and housing precinct was shelved in 2019 when expressions of interest were terminated, leading to the AEC launching legal action.
Mr Theophanous was a member of the Victorian Planning Authority board when the proposal was under consideration and misused his position to lobby senior ministers and departmental officers to favour AEC, IBAC said.
"In lieu of direct payment for his lobbying, he obtained benefits from AEC and its associates in the form of donations to his daughter's campaign for election to the Victorian parliament," IBAC's acting commissioner Stephen Farrow wrote.
There was no evidence Ms Theophanous was aware of the circumstances behind the donations and no adverse findings were made about her or AEC in the Operation Clara report.
In February 2018, an AEC representative approached the former minister in the Kirner, Bracks and Brumby governments as a possible lobbyist, citing his seniority and cabinet experience.
AEC executives decided they wouldn't hire Mr Theophanous as a lobbyist without a letter from the planning authority indicating it would not constitute a conflict of interest.
Two AEC representatives told the watchdog the former Labor MP did not provide the written assurance but they continued to engage him despite not formally appointing him as an lobbyist.
In September 2018, IBAC said a company whose director was one of the AEC representatives made a $10,000 donation to Labor's Northcote election campaign account after Ms Theophanous was preselected.
Mr Theophanous also arranged for the AEC to buy tickets to fundraising events to support Ms Theophanous' election in July and October. Tickets cost between $2000 and $2500 a head.
Other "in-kind" contributions were made by the other AEC representative, including 250 phone calls to Chinese-speaking constituents, translation of a letter with a Chinese salutation and providing people to hand out how-to-vote cards at pre-poll booths.
The conduct of Mr Theophanous was found to be improper rather than corrupt, meaning IBAC won't refer him to Victoria Police.
In a 13-page submission, Mr Theophanous said he absolutely and categorically rejected the findings and took umbrage with two AEC witnesses remaining unidentified.
A fair-minded and reasonable person reading the report, he said, would conclude that IBAC's findings remain "untested in evidence and therefore unsubstantiated".
However, Mr Theophanous has resigned from the VBA board and the government is asking him to immediately step down as a State Trustees board member.
"The allegations revealed as part of Operation Clara are damning and go to the judgement of Mr Theophanous," a government spokeswoman said.
In one instance from March 2018, Mr Theophanous sent text messages to Treasurer Tim Pallas pointing him to a newspaper article favouring the AEC proposal.
He sent a text message to the AEC representatives two weeks later saying he had "the most important conversation with the treasurer", who he described to IBAC as a close friend.
In question time, Attorney-General Michael O'Brien asked if Mr Pallas reported Mr Theophanous' conduct to IBAC.
Mr Pallas said he had acted appropriately at all times and noted IBAC stressed no other people mentioned in the report were the subject of adverse comment or opinion, including himself.
Key report recommendations include the Department of Premier and Cabinet amending appointment guidelines in relation to lobbyists and the Victorian Public Sector Commission expressly banning public entity board directors from carrying out linked lobbying activities.
The Andrews government has offered in-principle support to implement all four of IBAC's recommendations.
