Bernard Crofton, who, as housing director of Hackney Council in north London earned the media title of "fraudbuster", is described in the inquiry report as a "liar" who obtained his pounds 70,000-a-year salary by deception.
The report, leaked to the Independent, is the latest twist in a saga which has seen Mr Crofton branded as both hero and racist villain who was sacked and later re-instated by the council.
Ian Macdonald QC, who conducted the inquiry, is scathing in his criticism of Mr Crofton, arguing that he fostered an atmosphere in which black employees in the council were subjected to a witch hunt and where, on one occasion, the names of 600 employees were secretly passed to the Immigration Department for checking.
"Certain individuals exhibited the corporate view that 'too many bloody Africans' were being appointed to jobs in Housing," the report says. "During the period I am looking at 'African' became synonymous with fraud ... which in turn fed the myth of a great West African conspiracy ... I have examined the evidence in detail and have come to the conclusion that the allegations are without foundation."
Mr Crofton was hailed in the right-wing press as the saviour of a council hamstrung with a reputation for waste, corruption and nepotism.
One of his targets was Sam Yeboah, the former personnel director, whom he accused of turning a blind eye to the fraud. But the report says: "Although I have found that Sam Yeboah could be very curt and dismissive and was a stickler for procedure, I have found him to be patently honest and dedicated to the job for which he was employed. He has been gravely wronged and shabbily treated.
"The allegations [against Mr Yeboah] are so clearly and unequivocally without foundation that they seriously damage the credibility of Mr Crofton's claims and the weight to be attached to what he says about his own and other people's role in combating recruitment fraud."
But Mr Macdonald's most scathing criticism is of claims by Mr Crofton that he had been tipped off by Andrew Arden QC, a specialist in housing law, of a high-level conspiracy to remove him. Mr Crofton, who had been dismissed, was re-instated by the council in 1994 after introducing evidence of the conversation with Mr Arden at an appeal hearing.
The evidence - named the "Blue Document" - was introduced at short notice and Mr Arden was not available for cross-examination. However, when Mr Macdonald interviewed him, Mr Arden gave a very different account of the conversation from Mr Crofton's.
Mr Crofton claimed Mr Arden named three people who would constitute the appeal committee hearing - but they were not appointed until six to nine months after the conversation was supposed to have taken place.
"My conclusion is that the critical information in the Blue Document consists of an untrue and fabricated account of a conversation with Andrew Arden QC," the report says.
It continues: "Bernard Crofton's annual salary is worth some pounds 70K. If I am right, then he has sought dishonestly to obtain re-employment at this salary by deception. There can only be two consequences of such a finding: dismissal and investigation by the police with a view to criminal proceedings."
Mr Crofton is not permitted to speak to the press without permission from the council.Reuse content