The flawed prosecution of former high-flying taxman Nick Petroulias hit another speed bump yesterday when it emerged a juror in Petroulias’s second Supreme Court trial was a disqualified driver and, in the process, was unlawfully empaneled and was not qualified to serve on the jury.

Petroulias is charged with defrauding the Commonwealth, corrupt conduct and unauthorised publication of documents. This was the 25th day of Petroulias’s retrial. His first trial in 2005 ended with a hung jury. He has pleaded not guilty to all charges.

When former commissioner Michael Carmody resigned from the Australian Taxation Office in December 2005 to head the Customs Service, most commentators believed it was due to the pressures of the Robert Gerard tax fiasco. However, many close watchers of the ATO believe that the Petroulias matter was also a catalyst for Carmody’s swift exit. Petroulias was personally head-hunted by Carmody to head the ATO’s all powerful Strategic Intelligence Unit, with a title of First Assistant Commissioner, where his brief from Carmody was to seek and destroy tax avoidance schemes.

The whiz-kid lawyer who holds a Bachelor of Commerce, a Bachelor of Laws with honours and a Master of Laws with first-class honours, and worked at some of Australia’s pre-eminent accounting and legal practices, was enticed to join the public service on a pay cut with promises of a free reign to haul in the dodgy schemes of the rich and famous with unlimited resources. An internal ATO memo dated 25 September 1998 and signed by Carmody states:

I’ve asked Nick Petroulias, currently Assistant Commissioner, Strategic Intelligence Analysis in Large Business and International, to take on a new role so as to support the development of a strategic intelligence network throughout the Tax Office. The new position is that of First Assistant Commissioner, Strategic Intelligence Network, and in that capacity Nick will report directly to me. Working together in this way is all about meeting our changing responsibilities to the community in a changing world. Supporting Nick in his new role will help us meet that challenge.

The rest is history as Petroulias was charged with providing favourable tax rulings to entities he had an interest in while giving adverse rulings to competitors. Petroulias said this in 2003 of his time working with Carmody:

Look, the position, as it evolved, became very politically sensitive. There was no infrastructure to support how decisions were made and how protocols would be followed. You were pretty much left out on your own, twisting in the wind, and so when the wind changes direction, then everybody runs for cover. Unfortunately, I was the only one left standing.

The highly flawed and continued persecution of Petroulias is estimated to have cost Australian taxpayers in excess of $33 million dollars with the ATO funding the majority of that figure while the DPP has expended around $3 million dollars.

Someone in the ATO or Howard Government needs to explain to me why they are pursuing Petroulias and not the culprit who sliced $75 million dollars off big Liberal Party donor Robert Gerard’s tax bill which allegedly involved international tax avoidance and indictable offences. Oh, and let’s not forget the comfort letter Carmody gave to Gerard, effectively clearing him of any tax foibles, which facilitated his promotion to the Reserve Bank Board.

Who in the Government is going to haul in the ATO and DPP in what fast resembles nothing more than a witch hunt?