Local Government Minister Stirling Hinchliffe said in Ipswich on Tuesday that council-owned bodies set up by Ipswich City Council were set up to avoid the scrutiny of the Local Government Act.
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The night before Mr Hinchliffe tabled three reports in Queensland Parliament by consultants McGrath-Nicholls into a number of Ipswich City Council-owned companies.
Until recently, councillors and council staff ran the organisations and there was no independent or industry representation on the committees.
The report showed five entities owned and run by the council, including Ipswich City Properties, failed to prove value for money or did not comply with regulation.
"I am gravely concerned about the lack of accountability and transparency of these entities," Mr Hinchliffe told a crowd of about 50 reporters and current and former Ipswich City Council staff.
"Indeed the reports show the entities were formed to avoid the requirements of the Local Government Act."
Mr Hinchliffe said he planned to forward allegations contained in the reports to the Crime and Corruption Commission.
He said any decision to charge the directors was a matter for another person.
Moments before he spoke, Mr Hinchliffe and long-serving Ipswich councillor Paul Tully, both long-time members of the ALP, shook hands after Cr Tully greeted him with "comrade".
Mr Hinchliffe described allegations a councillor from Ipswich City Properties flew to the United States in a private jet in 2010 as "grave concerns."
Media organisations have been unable to access travel expenses from council committees.
Cr Tully said one aspect of the three reports examining the redevelopment of the Ipswich City Square was wrong.
He said work was clearly underway.
"On the other side of this wall is a $93 million building [the Icon Building] which was sold by the council, which is full of state public servants," Cr Tully said.
"For the Minister not to know that this building is part of the inner-city redevelopment is extraordinary."
The three damning reports on Ipswich City Council-owned entities have detailed evidence of potential fraud and breaches of the Corporations Act.
Mr Hinchliffe said the documents showed he was right to move to sack the council and appoint administrators.
"Ipswich City Properties incurred losses of up to $50 million – all ratepayers’ funds - on an Ipswich CBD redevelopment that never eventuated," Mr Hinchliffe said.
“ICP officials, including councillors and staff, also enjoyed an all-expenses-paid trip to the United States in 2010, including specially chartered flights on private jets."
A Queensland Audit Office report referenced by McGrath-Nichol found, in some instances, the council had ignored its own policies and failed to seek three individual quotes for tenders over $20,000.
An expression of interest process was also unable to prove it met value for money or appropriate competition, with two of the three bids "inadequate".
The auditors found issues such as unsigned board minutes, a missing annual report, and officers of the IMP council entity signing off on their own travel costs.
The $2.8 million sale of a block of land at Redbank Plains by Ipswich City Developments did not go to market, McGrath-Nichol also found, and signatories for the developers and guarantors were the same, risking "damage to the reputation of the council".
Mr Hinchliffe said taxpayers had been dudded by dodgy deals under a council culture of secrecy, entitlement and a lack of accountability.
“Italy, France, the UK and Abu Dhabi were other travel destinations for councillors and staff," Mr Hinchliffe said.
“Council even wasted more than $83,000 of ratepayers’ funds on high-priced lawyers to conceal the cost of these jaunts, following Right to Information requests from a media outlet."
-with AAP
