Published Thursday, 19 August 2010
The DRD Permanent Secretary was told to leave his desk less than 24 hours after a UTV Live Tonight investigation into the sackings of four non-executive directors of Northern Ireland Water was aired.
Mr Priestly was suspended following a phone conversation with DRD minister Conor Murphy.
In the phone call between Mr Murphy and Mr Priestly, concern was focused on the Permanent Secretary's role in a relation to a letter sent by Phoenix Gas chief executive Peter Dixon to the Public Accounts Committee.
The letter castigated three Assembly members over questions raised about whether the Independent Review Team investigating the failings of Northern Ireland Water - of which Peter Dixon was a member - had been truly independent.
Among other issues, PAC members asked about the relationship between Mr Dixon and NI Water chief Laurence MacKenzie
The letter from Mr Dixon to the PAC lambasted what he took to be as an attack on his impartiality by the SDLP's John Dallat and Patsy McGlone and independent unionist Dawn Purvis.
He hit out at a "disgraceful line of questioning" and added: "I greatly resent the questioning at the meeting of the PAC by the same three MLAs which sought to impugn the professionalism, ethics and integrity of the Independent Review Team.
"In closing, be assured if I can establish that legal proceedings are open to me, I will have no hesitation in taking them."
Mr Dixon later retracted his letter of complaint, saying he accepted the MLAs were fulfilling their responsibilities as public representatives and members of the committee.
The Northern Ireland Civil Service has launched an investigation into the conduct of Mr Priestly in relation to the PAC hearing in July.
"Too many strange events have taken place and too many disclosures have come to light ", Mr Dallatt told UTV on Thursday.
"And remember this one is unprecedented in that a member of the review team, Peter Dixon, sent a letter which was quite threatening to three members of the PAC, myself, Patsy McGlone and Dawn Purvis for doing nothing than we are expected to do. "
"I think further events that will unfold over the next couple of days will clearly demonstrate that there is no choice other than to order a completely independent inquiry into what was going on at the DRD but also particularly at NI Water. "
On Thursday, Sinn Féin MLA Billy Leonard hit out at the SDLP for defending "those who have been called to account for their failings".
"The SDLP appear now to be arguing that the Minister should not have acted with regard to NI Water. Are they content that contracts be awarded without tendering? Are they suggesting that the Minister should have turned a blind eye? It appears that is their position and it is one that is causing significant unease particularly with those businesses consistently denied a crack at government contracts," Mr Leonard said.
Mr Murphy will brief the assembly committed responsible for overseeing his department in the coming weeks.
He will also meet with representatives of the Consumer Council.
"While the Consumer Council recognises the inquiries now taking place - and respects the role of those tasked to undertake them - trust has been broken and the Consumer Council now needs assurances so that we can fulfil our role as consumers' representatives, and ensure this situation never happens again," the consumer watchdog said in a statement.
Mr Priestly was replaced on Thursday by his counterpart at the Department of Agriculture, Malcolm McKibbin.
The DRD assembly committee will hold a special sitting on Friday morning to discuss this week's events.