EXCLUSIVE: Chief Minister Michael Gunner convinced Cabinet to approve $12 million of taxpayer money for the Darwin Turf Club by taking the decision “out of certain people’s hands”, a Turf Club board member and friend of Mr Gunner’s told the board just days after the grant was approved, recordings from the meeting reveal.

Local businessman James Herraman, who is also senior Cabinet Minister Nicole Manison’s brother-in-law, told the board at a meeting in June 2019, that Mr Gunner needed to be acknowledged for the “smart move” he had executed to secure the public money for the Turf Club.

According to the recording, which the NT Independent has verified from high-level sources with knowledge of the discussion, Mr Herraman told the board the grandstand project had been “a bit pie in the sky”, but Mr Gunner had come through for them to make it a reality.

“From what I understand, we do need to acknowledge … that the Chief found the solution to get it through Cabinet … cause it was looking like it was going to be an issue, but he came up with the way in which he had to approach it and take the decision out of certain people’s hands,” the recordings from the June 18, 2019 meeting reveal him saying.

“It was a really smart move.”

The Turf Club board and Mr Herraman did not respond to the NT Independent’s questions yesterday, including what Mr Gunner’s alleged plan entailed and who was referred to as having the decision taken “out of their hands”.

Ms Manison previously revealed she had abstained from the Cabinet decision-making process due to a “perceived conflict of interest” involving her brother-in-law Mr Herraman.

In a media interview in September 2019 – while significant public outrage was occurring over the grant – she was asked if she had made the decision to stand aside from the process or if it had been made for her.

“I think all of the Cabinet was in full agreement that it wasn’t appropriate for me to be part of that decision,” she said.

It’s understood she was opposed to awarding the $12 million grant in the middle of the NT’s financial crisis.

ICAC found Cabinet had approved grant day after receiving ‘ill-informed and spurious’ application from Turf Club, business case flawed

Mr Herraman’s June 2019 board discussion was not specifically addressed in the Independent Commissioner Against Corruption’s recent report and did not appear in the official minutes of the meeting.

However, ICAC Ken Fleming’s report found Mr Gunner and Cabinet approved the $12 million grant one day after receiving the application from the Turf Club, which contained no cost-benefit analysis or verifiable costings to explain the price tag.

Mr Gunner’s then-chief of staff Alf Leonardi had written a letter for Turf Club chairman and Jaytex Constructions owner Brett Dixon to lobby Cabinet members in January 2019 for the grandstand. On June 13 of that year, Mr Leonardi sent a text to Mr Dixon informing him he needed to get the grant application in that day so Cabinet could provide funding from unspent capital expenditure at the end of the financial year.

Mr Leonardi also emailed Department of Infrastructure chief executive Andrew Kirkman and Department of Chief Minister chief executive Jodie Ryan the same morning asking them “where is the $12 m for the Racing Industry Project?’”

The ICAC report found the club sent a hastily produced submission to Department of Trade, Business and Innovation chief executive Shaun Drabsch later that day, who passed it onto Cabinet secretary Jodie Ryan less than 24 hours before Cabinet approved it.

“It would seem the ‘business case’ … was created that morning,” Mr Fleming wrote.

“It cannot be said that the grant was justified by any rigorous process with the government.”

He added the submission was “ill-founded and spurious”, making unverified claims about employment and tourism numbers.

Mr Fleming also raised the issue of two $50,000 donations to the NT Labor Party in the lead up to the 2016 NT election made by companies owned by Mr Dixon.

His company Jaytex was awarded the contract to build the grandstand in late August 2019.

Mr Gunner did not respond to the NT Independent’s questions, including who took the “under-the-arm” submission to Cabinet which is understood not to have been on the Cabinet agenda and whether he thought it was appropriate to be allegedly strategising on behalf of the Turf Club to award them taxpayer money.

He told the ABC last week that Cabinet did not know the “proposal had not been rigorously tested and validated prior to Cabinet’s consideration”.

Mr Fleming said in his report that he was prevented from further investigating how Cabinet made the decision due to Cabinet confidentiality privileges.

Mr Herraman, who was one of the Turf Club’s representatives on the selection panel that chose Jaytex as the winning bidder for the $12 million project, is also a close friend of Mr Gunner’s, attending his 2017 wedding in country Queensland.