The revelations are the latest drama to engulf the club after the recent move to stand down League Club president George Coorey following allegations of inappropriate behaviour revealed by the Herald.
On 23 July the Bulldogs board approved the deal for Laundy Hotels to be the major sponsor of the club until the end of 2022.
But what the majority of the board did not know was that Mr Ballesty and Mr Laundy each own a third of the Villawood Hotel. Land title records show they purchased the hotel in 2000 for $4.8 million.
According to corporate records, in 2012 Mr Ballesty, Mr Laundy and their third business partner, signed a $600,000 per year lease, subject to annual increases, with the Woolworths-backed ALH Group. The 25-year lease expires in 2037.
Previously, Mr Ballesty and Mr Laundy were directors and shareholders in a company Lonsdale Hotel Pty Ltd, which owned a hotel of the same name in South Australia, from 1994 to 2009.
When the Herald asked whether Mr Ballesty had notified the board of his association, a spokesman for the board replied that Mrs Anderson and CEO Andrew Hill were aware of the relationship when negotiating the deal and that Mr Ballesty was not a party to the negotiations.
In a second statement, it was admitted that the rest of the board had not been notified due to “the final approval process which occurred via email in an out of Board session” due to Covid-19 restrictions.
Mr Ballesty said that while he doesn’t consider he is conflicted in this matter, he acknowledged “that he preferentially would have advised the whole board,” a later statement read.
Mr Ballesty, who also sits on the League club board, said he disclosed his hotel ownership to that board in April 2018.
It is not suggested that Mr Ballesty personally gained from the sponsorship deal.
Mr Ballesty’s failure to inform the majority of the board of his business interest with a major sponsor has raised serious questions about Mr Ballesty’s continuation on the board, several sources close to the board said.
Mr Ballesty, 75, was the league club general manager during the 2002 Bulldogs salary cap scandal. In 2004 he admitted in a Sydney court that he knew about the salary cap rorts as early as 1999 but did nothing to stop them. He said club chairman Gary McIntyre assured him that the arrangement was legal.
“I should have checked,” Mr Ballesty said at the time.
Kate McClymont is an investigative journalist at The Sydney Morning Herald.