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What's on the tape? ICAC chief Megan Latham urges inquiry to listen to phone intercept

What's on the tape? The answer to this tantalising question could determine the future of two of NSW's most powerful legal figures.

The question was prompted by Independent Commission Against Corruption chief Megan Latham during a highly charged NSW parliamentary inquiry on Thursday.

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ICAC chief slams inspector's report

In her opening statement, ICAC Commissioner Megan Latham slams a report that was critical of its failed pursuit of Crown Prosecutor Margaret Cunneen as "so fundamentally flawed," it should be withdrawn or disregarded.

Brandishing a white envelope containing an audio CD and a transcript of an Australian Crime Commission phone intercept involving Crown Prosecutor Margaret Cunneen, Ms Latham urged the committee to make the phone tap material public.

It and other material, she said, would show ICAC had not acted with "unreasonable, unjust, [and] oppressive maladministration" in its pursuit of Ms Cunneen, as alleged by ICAC Inspector David Levine in a scathing report last year.

The telephone intercept was carried out by the ACC in 2014 and captured Ms Cunneen discussing a traffic accident involving her son's girlfriend, Sophia Tilley.

The ACC is believed to have been at the time targeting a tow-truck driver alleged to be involved in organised crime.


The tow-truck driver is understood to have passed his phone to smash repairer George Kharadjian, who discussed the accident with Ms Cunneen, who is a friend.

It has been reported that a second conversation between Ms Cunneen and Mr Kharadjian occurred the next day.

The ACC passed details from the telephone conversations to the ICAC, stating: "DPP Prosecutor possibly involved in corrupt conduct."

ICAC began investigating allegations Ms Cunneen had tried to pervert the course of justice by advising Ms Tilley to fake chest pains to avoid a breath test after the accident.

But it was forced to abandon the investigation after the High Court ruled the ICAC had exceeded its jurisdiction. The NSW solicitor-general later ruled no charges should be laid.

Ms Cunneen has since admitted to discussing "fake chest pains" with Mr Kharadjian. But both have insisted Ms Cunneen was joking and the phrase was a play on words referring to Ms Tilley's breast implants.

The transcripts of the telephone conversations have never been made public. Ms Latham is urging the committee to do so.

After Ms Latham's evidence on Thursday, the committee adjourned to consider legal advice she provided in relation to the telephone intercept, listen to the audio and read the transcript.

Ms Latham said the legal advice says the highly sensitive telephone intercept material was able to be tendered to the parliamentary committee.

Notably, she urged the MPs on the committee to not only read the transcript but also to listen to the audio.

Having done so, the committee adjourned to February 19 in order to seek further legal advice about its ability to release the phone tap information and, if so, how much of it.

The inquiry is being held after Mr Levine in December issued his damning report on the agency's conduct in its pursuit of Ms Cunneen.

But in her opening statement, Ms Latham slammed Inspector Levine's report as "so fundamentally flawed" that it should be withdraw or disregarded by a parliamentary inquiry examining it.

She said Mr Levine's report was "lacking in a proper factual foundation and infected by a denial of procedural fairness".

She asked the committee to publish two volumes of documents the commission has submitted to the inquiry in relation to its investigation of Ms Cunneen, warning that failure to do so would "continue to unfairly damage and undermine public confidence in the commission".

The material would "undermine the basis for the adverse findings in the report" and address "speculative, false claims to which the commission has not previously been able to lawfully respond."

"The commission submits that consideration of this material leads to the conclusion that the report is so fundamentally flawed, so lacking in a proper factual foundation and infected by a denial of procedural fairness that it should be withdrawn as proposed by the former inspector, Mr Harvey Cooper, or that the committee places no reliance upon it," Ms Latham said.