Two builders in Brighton were given beach hut plots free, with the help of a council, which they then sold for a profit, an investigation has revealed.
Brighton and Hove City Council investigated the "inappropriate" allocation of beach hut plots in 2005, BBC South East has learned.
A Freedom of Information request by the BBC to uncover the report findings was blocked by the council in May.
It said there was no evidence of deliberate misconduct or personal gain.
The council said it would not be in the public interest to release the information.
Builder Bernie Foster was given beach hut number 104 by the council in September 2003.
It had belonged to Ena Harrison until it was destroyed by vandals in August 2003.
Return hut
Her son, David, claims Mr Foster offered his mother £200 for the destroyed hut and he advised her not to sell.
But Mr Harrison said a week later his mother received a telephone call from a council official advising her to return her hut to the authority.
A few weeks later Mr Foster's wife, Valerie, became the owner of the plot and at the start of 2004 Mr Foster rebuilt the beach hut and sold it to its current owners for £6,000.
Mr Foster said in a statement through his lawyers: "We were offered the site by Brighton and Hove City Council.
"They know me as someone who has constructed many huts on beach hut sites since 1986.
"We intended to build a new hut and use this ourselves along with our ageing aunt when I retired in 2004.'
Mr Foster said they changed their minds when approached by the current owners.
"Something murky was going in Brighton in the allocation of Beach Huts"
He said he had no input in Mrs Harrison's decision to give up her plot, which is a matter between her and the council.
He also said he could not recall making an offer to Mrs Harrison.
But Mr Harrison said: "Obviously someone has taken this and sold it on, made a profit really at my mother's expense.
"I suppose in a sense one shouldn't be surprised how low greed will drag humanity."
The four-month BBC South East investigation discovered a second builder who also made a profit.
Fulvio Radovini, a one-time model turned builder, received at least three sites along the seafront.
Mr Radovini said each site cost him about £750 to rebuild and then he sold beach hut number 412 for £3,200 and beach hut number 313 went for £5,000.
Mr Radovini refused to disclose how much the third site went for.
He said he did nothing wrong and the council allocated him plots with good intent.
"Brighton and Hove City Council have more huts and they can charge more ground rent, £300 to £400 a year."
"So you have five more huts built and the council has more revenue, and the seafront looks better."
Professor George Jones, Professor of Government at LSE, said: "Something murky was going in Brighton in the allocation of beach huts.
"I think the public really need to know what went on."
Incorrect procedures
In 2005 a Brighton and Hove City Council investigation found that in nine cases beach huts were allocated to builders.
The BBC submitted a Freedom of Information (FoI) request, but this was refused by the council.
It said its investigation was exempt under Section 30 of the FoI 2000 Act.
The council said: "The auditors found that in a few cases between 2001 and 2003 the correct procedures had not been followed by a former member of staff, resulting in the inappropriate sale of several huts.
"However, absolutely no evidence was found of any deliberate misconduct in the transactions and no personal gain was made by any member of the council's staff."
The council said it now allocated its seafront beach huts using a lottery system.
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