The request for cash came in an email from the Korean company director.
Funding appeared to be on the table from a Brazilian bank for a $90-million ethanol plant.
The Korean-backed company, Dongmun Greentec, would build the plant in regional New South Wales.
Its director just needed 360,000 euros up front.
"If Dongmun can get loan from your council, I promise to build one ethanol plant in Moama", the company director wrote in October 2018.
"I am so sorry to trouble you."
Within seven weeks, the finance department at Murray River Council (MRC) had deposited $100,000 into a mystery bank account.
It did not know who it belonged to and only had a vague idea of what it was for.
"We're paying out individuals. We're just giving it to them," said former councillor Gen Campbell, who had no involvement in the payment, and was only informed about it two years later through a confidential review of the deal.
"We'd advanced money before we'd signed any documents or the loan agreement to repay."
By May 2019 the council had given the company $900,000 "to establish a line of credit to … construct an ethanol plant and biodigester at Moama".
The leaked confidential review into the deal, seen by the ABC, would later find it was done with no due diligence or documentation to support the arrangement.
"When I look back now, I'm horrified that no alarm bells were going," Ms Campbell said.
"I didn't even consider that it was really venture capital."
Project touted across Australia
Dongmun Greentec had made big promises.
Its plant would produce up to 115 megalitres of fuel-grade ethanol per year and bring 250 jobs to Moama, which had a population of about 7,000.
For more than a decade, the company had approached councils across Tasmania, NSW, and Victoria with a similar proposal — to build an industrial-scale energy plant that would create jobs.
In Tasmania, a falling out with partners blew the project out of the water before it could start.
The company invested in land in the Golden Plains Shire in western Victoria but could not get the deal off the ground due to a lack of funding.
In Warrnambool, the local council threw the idea out on the basis that the technology was not yet viable.
Dongmun's directors in the early 2010s joined up with a farmer in Junee, in NSW's Riverina region, with plans to build an ethanol plant there.
The partnership lasted a month before, again, the deal went sour.
Dongmun finds an audience
When the travelling salesmen came through the doors of former Deniliquin councillor Jeff Shand's real estate shop on the town's main drag in 2011, they received an audience.
"At the end of the day, if someone comes through your door saying they have got a $90m project and they are looking for land, you have to take them at face value," Mr Shand said.
"There has been a whole heap of mud thrown at this project from the start, but there was nothing sinister to it."
The company directors listed a disused KFC building in the regional town as their address.
Executives from the former Deniliquin council (now Edward River Council) soon became fierce advocates for the project, with support letters describing its "significant economic benefits" to the NSW Department of Planning.
Ian Wall, a retiree from Deniliquin and part of the city's ratepayers' group, said there should have been more due diligence.
"An unskilled person on Google saying, 'Who are these people?' [would] find an eight-year history of disaster," Mr Wall said
"And it's presented to us here like a $90-million state-significant project, groundbreaking technology."
Council lends $700,000
Edward River Council set aside land for the project, helped secure planning approvals from the department, and lent the company $700,000.
Dongmun Greentec company director Sung Ho Joo said "he never touched a cent" of the council's money and that it was all used to pay debts directly.
Deniliquin council said their bank guarantee was provided through Westpac and drawdowns were between the bank and Dongmun.
"They're not businessmen; they're council employees — roads, rates, and rubbish," Mr Wall said.
"And if they've got excess money, it's legislated. They are meant to put it in safe harbour triple-A investments.
"This wasn't that. This was like, triple-C minus."
By 2018 no building works had commenced.
Edward River Council was starting to get nervous.
Company eyes Moama
Dongmun Greentec began looking elsewhere for its project.
The former general manager of Edward River Council, Des Bilske, would later reveal to NSW Office of Local Government (OLG) investigators that its Australian director called him up after he moved on to the neighbouring municipality at Moama, Murray River Council.
The company director asked if they could bring the project to Moama instead.
"It just did not make sense," said Kylie Berryman, a grain farmer whose property was opposite the proposed plant.
"Why would anybody walk away from an active approval to build this and go and start from scratch … to try and get it off the ground again?"
OLG investigators would later reveal in their report that at this point, in March 2018, the company was insolvent.
Mr Bilske, it would be revealed in the report, had been warned the company did not have the funds to pursue its projects.
He had already watched the project fail in Deniliquin.
Nevertheless, he penned a two-page memo and recommended his new council acquire land at Moama for the ethanol plant.
By August, MRC had spent $1.2 million on a property, with no valuation.
The agent involved, former Deniliquin councillor Jeff Shand, told the ABC the price was named by the vendor, and the council simply paid it without attempting to negotiate.
When the land was formally valued in July 2020, they were found to have paid more than $400,000 in excess of market value.
"I didn't think that council was realistically in the business of, you know, giving people money to start businesses," Ms Berryman said.
"We knew there was something wrong with this from the start."
MRC resolves to pay Deniliquin debt
Deniliquin's council was still owed close to half a million dollars and was threatening legal action.
But MRC officers came up with another idea for the Moama project.
According to the report, they resolved to lend the company money to pay off the Deniliquin debt, which was about $470,000.
They would also pay for their legal fees.
"And that was a real kick in the guts to learn that our shire was paying the debt for these proponents," Ms Berryman said.
She was still unclear what due diligence was undertaken to assure the council that it was a good deal.
"We're just like, what the?" Ms Berrymand said.
"Why is our council doing this? And it's still a question, why did [they] do it?"
$100K paid into mystery account
OLG investigators would later describe in their report how MRC general manager Des Bilske asked its finance department to make another payment.
One hundred thousand dollars was paid to a mystery bank account in the name of Ji Chan Joo, a person unknown to the council.
The payment was made without loan security or the knowledge of councillors.
An email to the council from Dongmun representatives said the money was needed to secure funding from an overseas investor.
There was no documentation to support the payment or why it was paid to Ji Chan Joo.
The ABC can reveal that the mystery bank account belonged to the Dongmun Greentec company director's son, who had no direct relationship to Dongmun.
Company director Sung Ho Joo told the ABC that the $100,000 was used to pay his son's expenses while he worked for the company in Korea.
The secret review conducted for MRC in 2021 found its dealings with Dongmun may have been unlawful and involved "significant failures in process and governance" and "absence of proper documentation".
It also called for further investigation of a $260,000 payment to remove caveats on a property at Gheringhap tied to the company.
Ms Campbell said, looking back, the project was unrealistic.
"I had no reason to think there's anything untoward with this project," she said.
"I was sold a really good story."
A 'history of failures'
NSW Local Government Minister Wendy Tuckerman this week tabled the OLG's report into MRC's dealings with the ethanol company in parliament.
It found the deal involved "significant breaches of the Local Government Act", that MRC's processes were "at best ad hoc and cavalier" and that $120,000 of public money had been handed over "without invoices or receipts".
"Council had become the proponents' banker and, in doing so, failed to act prudently … in carrying out its functions," the report said.
"Given a demonstrated history of failures … an absence of capital and an inability to pay their debts, no council exercising a reasonable degree of care … could have provided [this] level of support."
The authority found that many of those involved had moved on since the deal was made.
"In other circumstances, a public inquiry would have been recommended," the report said.
Referrals to ICAC and police
The plot of land bought for the Moama ethanol plant remains disused and covered in weeds.
"It just seemed that money was going out here, there, and everywhere and [with] no accountability," Ms Berryman said.
"I just don't have the words. It's ludicrous.
"I just can't fathom it. It doesn't happen in a real world."
Ms Berryman has become somewhat of a council watchdog since she discovered the plant was to be built on her doorstep.
She has boxes of Australian Securities and Investments Commission documents and council minutes from her own two-year investigation.
In May 2021, MRC referred itself to the NSW Independent Commission Against Corruption (ICAC) and the police.
"It's difficult for me to not come to a reasonable conclusion that there are still questions," new MRC chief executive officer Terry Dodds told a council meeting.
"Council [hasn't] got the powers to actually see where the money went from electronic funds transfer, once it leaves solicitors and once it leaves council's bank account."
Mr Dodds revealed to staff in June that the local police had asked ICAC to investigate because the matter was "too complex to address by the local team at Deniliquin".
ICAC declined to look into the matter, writing to the council that OLG investigators were already examining the situation.
"You may wish to consider reporting the matter to the Financial Crimes Squad," the ICAC officer wrote.
In July, a letter came back from the NSW Police Financial Crimes Squad, which stated "the matter has been referred to Deniliquin Police Station".
Loans repaid but ratepayers want answers
MRC has now recovered the $900,000 loan, along with interest and legal expenses, through the forced sale of the Dongmun's security property at Gheringhap.
Council officers and councillors involved in the transactions in both Deniliquin and Moama have largely moved on.
Des Bilske declined to comment on questions put to him by the ABC.
But current MRC Mayor Chris Bilkey said the shortcomings had been the "subject of extensive efforts within to address issues such as probity measures, transparency, and the establishment of a project management framework".
"Most of the issues raised in the report have been addressed and adopted as policy," he said.
"The final piece is the adoption of a loans policy. We expect that policy to be in place early in the new year."
Unanswered questions remain
Ms Berryman is taking MRC to the NSW Civil and Administrative Tribunal (NCAT) to get her hands on a copy of the internal report.
She was exasperated by the fact there had been so little interest from external authorities into the council's dealings with Dongmun and their lack of due diligence.
"It's madness," she said.
"Whoever put that money into that bank account should be held accountable because they're taking public funds, giving it to a person — they don't even know who the person is."
Local Government Minister Wendy Tuckerman declined to comment while proceedings were before NCAT.
Deniliquin ratepayer Ian Wall wanted an investigation into the way his council dealt with the matter.
"These guys are never held accountable," he said.
"They can pile one train wreck of a deal on top of another like this, and nothing ever happens to them."
