The decision about whether to criminally charge controversial gambling identity Steve Fletcher has been removed from the office of the Director of Public Prosecutions and sent instead to the Crown Solicitor's office, because of Margaret Cunneen's previous relationship with Fletcher.
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Lloyd Babb, SC, the Director of Public Prosecutions, has informed the attorney-general's office that his office has a conflict with making any decision on the Fletcher matter as Ms Cunneen is employed as a prosecutor within the DPP.
In November 2014 the Police Integrity Commission recommended the DPP consider whether there was enough evidence to criminally charge Mr Fletcher, 44, for fraud offences over his use of the identities of a string of NSW police officers to open betting accounts.
The accounts were used to hide Mr Fletcher's betting activities after he was banned by a number of internet betting agencies.
The PIC also recommended the Australian Tax Office should investigate Mr Fletcher for failing to pay tax on his gambling activities.
Nicknamed "the Professor" for his ability to calculate odds, Mr Fletcher is no stranger to controversy. Explosive phone taps played at the PIC inquiry revealed he was receiving inside information on horse racing as well as international tennis matches and had profited from such information.
On Wednesday a spokeswoman for PIC confirmed the office of the DPP had informed PIC that "the DPP considers it would be subject to a conflict of interest if it were to advise on whether charges should be brought and the DPP proposes to ask the Crown Solicitor's to exercise the function of the DPP in this matter."
The DPP refused to comment on the Fletcher matter. "Any information you require about any such matter will have to be obtained from the referring agency," said a spokeswoman.
Asked when Ms Cunneen might be returning to work, the spokeswoman said: "This Office will not be commenting on the work status of any Crown Prosecutor for privacy reasons."
As well as being the target of a PIC inquiry, Mr Fletcher is understood to have been the target of a joint Australian Federal Police and Australian Crime Commission task force.
While Ms Cunneen was not a subject of the task force, it was information from the task force's phone taps which suggested Ms Cunneen, whose son Steve Wyllie worked for Mr Fletcher, may have attempted to pervert the course of justice when her son's girlfriend was involved in a car accident. Ms Cunneen has strenuously denied any wrongdoing on her part
and has said her only conversation with her son's girlfriend after the accident was when she entered the ambulance to ask if she could ring her parents.
A decision by the task force was made to refer the matter to the Independent Commission Against Corruption for investigation. A recent High Court decision held that ICAC did not have the power to investigate the matter.
In the past, Ms Cunneen has played down her friendship with Mr Fletcher. Questioned about the relationship in 2011 she claimed: "I have met him a few times. Quite frankly I don't want to have any public connection with him. That wouldn't assist me at the present time at all."
At the time Mr Fletcher had been warned off racecourses for having prior knowledge that jockey Bobby El-Issa would not ride to win. The jockey received an 18-month disqualification but Mr Fletcher's ban was overturned on appeal.
In 2006, Mr Fletcher and his then betting partner and brothel owner Eddie Hayson successfully wagered on the Newcastle Knights losing to the Warriors. Mr Hayson, who owned horses with ex-rugby league star Andrew Johns and his brother Matthew, denied receiving inside information that Johns would not be playing due to injury.
