Anthony O'Sullivan, the suspended chief executive of Caerphilly council and and his deputy Nigel Barnett have been arrested. It came after secret and unlawful pay increases.
Mr O'Sullivan's salary increased from £132,000 to £158,000 when the rest of the council staff were having a pay freeze.
A Wales Audit Office report said:
"The decision by the Senior Remuneration Committee on September 5, 2012 to approve the pay structure set out in the report of the chief executive was unlawful on a number of grounds.
"The first is that the meeting of the Senior Remuneration Committee was not properly advertised in accordance with the Local Government Act and neither were agendas for the meeting made available for public inspection as they should have been."
Avon and Somerset Police were asked to investigate by the Gwent force – due to Gwent's "working relationship" with the council.
The police statement says:
“Following a request to carry out a review by the Wales Audit Office two people have been arrested on suspicion of fraud and misconduct in public office.
“They currently remain in police custody where they are being questioned.
“It would be inappropriate to comment further at this stage.”
The pay increases were approved "by a committee of one Plaid Cymru and four Labour councillors. A further 20 senior managers including Mr Barnett also received a substantial pay rise, but the bulk of the council’s staff were on the third year of a pay freeze."
Did it not occur to any of those councillors that the arrangement was rather dubious?