Did Abbott Lie To The Electoral Commission?

This is the final in a series of extracts from Margo Kingston’s 2007 book Still Not Happy, John. Read the first extract here, the second here and the third here. Read Kingston on why New Matilda is publishing this material now here.

The breakthrough came on 3 September 2003 courtesy of a tip-off from a concerned insider. The bloke who’d decided to let Abbott off the hook was named Brad Edgman, I was told, the head of the AEC’s Funding and Disclosure branch at the time. I gave him a call.

Brad Edgman does not have legal qualifications. Despite the complexity of disclosure law — due to the Big Parties’ use of disclosure avoidance schemes — he’d neither asked for a copy of Abbott’s legal advice nor sought his own in 1998-99.

He said he’d read Abbott’s letter, looked at the trust deed and was "of the opinion that the Trust does not constitute an associated entity". Can you imagine the ACCC asking a company questions about price fixing, then closing the file on the basis that the company says its lawyers say its activities are legal? The Tax Office doing the same when it queried your deductions? How convenient for Tony Abbott.

And would Pauline Hanson — or any other non-establishment politician — have got the same treatment?

My AEC sources said no way.

Public pressure was having an effect. The day after I published the Edgman story — Hanson’s second week in jail completed — I interviewed AEC Chairman Trevor Morling.

He began, "I’m a non-executive chairman. I don’t work in the commission, and can’t possibly know the day-to-day operations".

Morling said he had "arranged to have sent to me today all our records". Why? "Because of the level of public concern."

He said the AEC had sought new, urgent advice from the Australian Government Solicitor that very day, adding that after Faulkner’s 2002 query about Sharples’ legal services the AEC had also sought advice from the AGS and the Director of Public Prosecutions. He was reading the first AGS advice as we spoke and described it as "inconclusive". Morling said, "I wish it had been referred to me then", and seemed nonplussed that the commission had not investigated further. "I may refer this to a senior counsel for an opinion," he added.

Trevor Morling has now retired as chairman, and since that conversation the AEC has strenuously denied that he did intervene in the case, but neither the AEC nor Morling has complained to my editor for reporting to the contrary.

Documents since extracted under a Freedom of Information request also show that Morling refused to sign a draft AEC letter denying that he had criticised the Commission or intervened in the AHPT case. Morling returned another call some time later, leaving a message saying that since he’d left the job it was now inappropriate for him to make further comment.

While still in office, however, Morling had told me that the AEC "must stay outside politics — you’d be surprised at the ways we have to fend off politicians and political parties trying to get what they want implemented. That applies whatever government is in power — I’ve been in the job for 14 years."

After this, Brien Hallett suddenly became more expansive. Of the AEC’s failure to provide the Senate with the legal advice relating to Sharples’ case, he said, "It was an oversight. It’s regrettable." (Sound familiar?)

So would the AEC now investigate Abbott’s trust? "I’m not in possession of all the facts yet. Steps are being taken, and I believe a discussion is being held today with the AGS."

Hmm, I thought. Tony Abbott reckons he’s an honourable man. Why not ask him to disclose his donors directly to take the pressure off the AEC and restore people’s trust in the democratic process? I lodged some questions with his spokesman the next day.

Abbott left a return message: "Margo, it’s Tony Abbott here, the object of your derision and ridicule. I’m returning the call that you put in to Andrew Simpson yesterday."

We spoke late on Friday, 5 September. Hanson was spending her third week in jail.

Margo: Had you given intending donors to the AHPT a guarantee of confidentiality?
Abbott: No. I did not tell them that their names would be publicised.
Margo: Why didn’t the public have the right to know the identity of the donors?
Abbott: There are some things the public has no particular right to know.
Margo: Such as?

He asked whether I had publicly disclosed my salary.

"Yes," I replied.

He asked whether I had criticised Fairfax in public.

"Yes," I replied. I asked him again what things the public had no right to know.

Abbott: "Where do you start? I don’t propose to nominate a list. I don’t propose to enumerate them. Short of the AEC changing its mind, they are not entitled to know who those donors were unless the donors choose to volunteer that information."

He said the donors had done "a good thing" for Australia. So why did he design the trust to ensure that donors would remain secret?

Abbott: "I didn’t design the trust so that donors weren’t required to disclose. I set up the trust to support legal action."

So why did he take legal advice on secrecy before soliciting the donations?

Abbott: "I didn’t take legal advice on disclosure till after I got the AEC’s letter. I sought legal advice and got oral advice from a senior lawyer."

Who was his lawyer?

Abbott refused to answer.

Why?

He had not advised the lawyer that "by the way, in five years time I’m going to dob you in to Margo Kingston".

"I just believe private conversations should be private," Abbott said.

Then why did he reveal the content of this private conversation in his letter to the AEC and why had he now released the letter to the media?

Tony Abbott did what certain politicians do when they’re cornered — attack the questioner.

Abbott: I think your problem is, Margo, that you support One Nation. That’s your problem.
Margo: Why would you think that?
Abbott: You’re Pauline Hanson’s best friend. You’re delighted at the prospect of Hanson coming back. You’d be delighted.
Margo: Did your lawyer see the Honest Politics Trust deed before giving advice?
Abbott: I’m not going to disclose that.
Margo: Why?

He said he’d given me enough time and hung up.

It took a while for it to sink in. Over the weekend I read his 1998 letter to the AEC again, not quite believing what I was reading. But there it was in black and white: "Before seeking donations to the Trust I spoke with one of Australia’s leading electoral lawyers who assured me that the Trust would not be covered by disclosure provisions."

If what he’d just told me on the phone were true, then had he lied to the AEC in writing? If he had that was a very different matter, as Pauline Hanson now knew, from lying to the ABC, the Sydney Morning Herald or, in Howard’s government, to our Parliament. Hanson was in jail. Abbott was a Cabinet minister. A future prime minister, some reckoned.

I read it again.

On 20 October 1998 Abbott told the AEC in writing he had sought legal advice on donor secrecy before collecting donations. On 5 September 2003 he told me he got his legal advice after the donors had paid up, in response to the AEC’s letter of demand.

So what?

There’s a big persuasive difference, for starters. His letter to the AEC intimated that he’d structured the Australians for Honest Politics Trust specifically to avoid disclosure, on expert legal advice, and had then guaranteed confidentiality to his donors. His story to me now was that he had not given assurances of confidentiality and had not taken legal advice on disclosure until after hearing from the AEC: meaning he had misled the commission to bolster his case against disclosure.

But the legal implications were more disturbing. The authority of "legal advice" is worthless unless lawyers are prepared to put their name to it. So given Abbott told the AEC he’d got legal advice the question is not simply when, but also if.

Did he really get legal advice? Or did he just relay a few off-the-cuff observations from a lawyer mate — observations not made with intent to be represented as legal advice?

Why wouldn’t Abbott say whether he briefed his lawyer with the AHPT deed? I’m a lawyer myself and self-respecting lawyers would never give advice without considering the relevant material if they knew clients intended to present it as authoritative. Did Abbott’s lawyer know that his "assurance" would be used in this way? If not, is that why Abbott wouldn’t name his lawyer? If so, why the problem in naming his lawyer now? Why would his lawyer be professionally unwilling to stand publicly by it?

Question: had Tony Abbott misled the Australian Electoral Commission not only about the timing of his "legal advice", but also about its very existence?

Section 137.1 of the Uniform Criminal Code Act (1992) states that providing (materially) false or misleading information or documents in "compliance or purported compliance with a law of the Commonwealth" is a criminal offence carrying a penalty of imprisonment for 12 months.

On Tuesday, 9 September 2003, I phoned Brien Hallett to inform him of Abbott’s admissions. He said he would "send it up the line".

Was the AEC finally asking Abbott the questions it failed to ask him in 1998? "I can’t give you a running commentary on what we’re doing," Hallett said, because the AEC didn’t want to broadcast its strategy. But he gave an assurance that the AEC was no longer just reading media reports and was actively investigating.

"We do take our accountability [to voters]very seriously," he said.

I asked what penalties there were for misleading the AEC. He checked with the experts and confirmed that misleading the commission would come under the Uniform Criminal Code. "We don’t have a view on whether he has misled," Hallett said. "We don’t have enough evidence. If you have particular information you can put that before us."

I wrote up the Abbott interview and published it on Webdiary. That was my evidence.

The next day a fax arrived:

September 10, 2003

Dear Margo,

I’ve just been given your latest online piece.

The important facts remain: the Honest Politics Trust did not endorse candidates, support candidates or fund campaigns. I did not tell donors their names would be revealed when seeking donations because I had no reason to think they would be. I did not tell the lawyer whose advice I sought that his name would be revealed. I have always been upfront about my role in Australians for Honest Politics but don’t intend to say anything about other people’s roles except as required by law. To do otherwise would be to break faith with people who supported a good cause at a difficult time for Australia.

Yours sincerely,

Tony Abbott.

Tony, the identity of your donors, and the purpose and activities of the AHPT, were no longer the only "live" question. It was your lawyer we’d like to have heard more about. Still would.

The AEC went quiet after that.

Abbott has said over and over that if the AEC tells him to "I will be happy to disclose the donors". But if there were nothing politically embarrassing in their identities they themselves would have come forward to defuse things by now. I think Abbott would argue the matter in court if push came to shove, and that his assurances to the contrary were for public consumption in the belief the AEC would not call his bluff.

Why not bring it on? The potential abuse of such trusts to destroy or exhaust new democratic players through the courts, for the benefit of the Big Parties, is obvious. If the AEC won in court it would have a legal precedent of enormous value for forcing disclosure from reluctant political parties. If it lost it could recommend strengthening the law. The ACCC does this all the time.

On 25 January 2004 I emailed Abbott some questions, which he replied to on 4 February.

Was your lawyer briefed with the trust document before giving his or her legal advice?

No.

You say in your letter to the AEC that your lawyer "assured me that the Trust would not be covered by disclosure provisions". Was that assurance given without reservation or qualification?

Yes.

Was your lawyer aware that you would use this advice for the purpose of representations to the Australian Electoral Commission?

To the best of my recollection, yes.

What is the basis on which you describe your lawyer as "one of Australia’s leading electoral lawyers"?

My judgement.

Why did you advise the AEC by letter that you had sought legal advice before seeking donations to the trust, when you sought the advice after receiving the AEC letter requesting disclosure?

I had more than one conversation with the lawyer in question.

Has the AEC sought further information from you in relation to the trust and the content of your letter to it?

You should ask the AEC.

Thanks, Tony. Oh, yeah, just one more thing. It’s been bugging me for months.
How did the Australians for Honest Politics trust get its name?

I chose it.

In his letter to the AEC Abbott had said that "I very much doubt whether the framers of the Electoral Act would have wished to discourage those seeking to test and strengthen the electoral law."

Yet while reporting this story I learned that Abbott’s own government has done precisely that for years, starving the people’s watchdog of the funds to do its job on donation disclosure and thus intimidating it out of doing its job. This suits both Liberal and Labor, helping them avoid party politics interfering with their mutual donor "sins", and such has been its progressive atrophy that the AEC now plays along. Even if the Big Parties are caught not disclosing — overwhelmingly by chance — the AEC never prosecutes.

There’s also the question of leadership. Throughout the Abbott controversy commissioner Andy Becker refused all interview requests. Neither the way Becker was appointed nor his career so far inspires much "confidence in our electoral process". Becker was a political appointment: Howard’s cabinet overruled the selection committee’s view that he was unsuitable to be assistant commissioner in 1997, and again when it did not recommend him for the top spot in 2002.

Two months after Becker got the top job the AEC admitted that he had agreed to supply our 8 million electoral roll names, complete with our birth dates and gender, to the Australian Taxation Office — so that John Howard could send us all a personalised covering letter with ATO information about the GST. Becker misled Senate Estimates on his knowledge of what would be sent to voters and had to correct the record twice. Privacy Commissioner Malcolm Crompton found that Becker was in breach of his legal duty not to hand over our private information without our permission.

Business as usual from top-level bureaucrats in John Howard’s "frank and fearless" public service…

Postscript (2004): The quest to reveal the 10 remaining mystery donors goes on. I finished this chapter while the AEC dragged its feet on my Freedom of Information request for material on Abbott’s Australians for Honest Politics Trust. The legislative deadline for handing over the documents passed, and then two extensions the AEC itself specified. The commission gave no explanation for the delays.

Finally it released some documents, including an extraordinary email from the decision-maker Brad Edgman in 2003, after I lodged an FoI request for documents on my FoI request! Even later the AEC finally released the trust deed. The witness to the signature was blanked out and the last two pages, including what looks like a receipt for stamp duty, were illegible. The AEC did not even ask for legible copies to be sent before letting Abbott off the disclosure hook. It then told Senate Estimates it sought legal advice before releasing relevant documents — something it failed to do when exempting Abbott from disclosing his donors to the Australian people. The AEC’s actions remain at odds with its charter.

Edgman sent the damning email to Brien Hallett and the AEC’s executive group on 26 August 2003 after journalists asked why the AEC had run dead on the AHPT:

"The letter Abbott is talking about [exempting him from disclosure]was signed by me. Back in FAD [the AEC’s Funding and Disclosure Branch]in 1999 we considered whether his trust might be an associated entity. The bottomline conclusion was that, on the scant information available at the time, it couldn’t be concluded to be such…

"The basis of this conclusion, as Brien [Hallett] and I discussed earlier this afternoon, was that the trust’s operations were aimed at causing a political party harm rather than to benefit any particular parties. In other words, it does not meet the Act’s definition of associated entity. This is no real surprise, as the provision was introduced to cover front organisations that were being used to launder party donations and transactions (ie "benefits")…"

You can only wonder what form Edgman’s "considered" attention took, as there is absolutely nothing in the AEC’s file in 1998 or 1999 evidencing any consideration at all. No memo, no email, no file note, no record of discussion — nothing came to light after my FoI request. And why did it take the AEC eight months to reply to Abbott’s letter seeking exemption from disclosure? Yet another "unfortunate oversight", according to Edgman in another email.

The AEC has extensive powers to get the information it needs to make an informed decision. It did not do so, and reached its decision on the basis of "scant information". Why?

Edgman’s email of 26 August 2003 also shows that Hallett misled me on 1 September 2003 when he said he did not know why the AEC had let Abbott off in 1999.

And other documents show that at the same time the AEC was refusing to release its 1998-99 exchange of letters with Abbott to the Australian people it was charged with serving, it jumped to attention when Abbott — the alleged law breaker — asked for copies at the height of the scandal. The AEC delivered them on the same day.

We’re talking dereliction of duty by the AEC, followed by a sustained and determined cover-up. Howard presided over the collapse of the AEC as a credible watchdog of democracy, at least when it comes to political donations.

Postscript (2007): My prediction that Abbott was lying yet again when he told the public that he "will be happy to disclose the donors" if the AEC asked him to proved correct. Sid Maher reported in The Australian on 30 December 2004 that legal advice in April 2004 to the AEC, obtained under FoI laws, said there was enough evidence to order Abbott to produce the trust’s financial records, which would disclose its donors. The AEC ordered Abbott to disclose the next month.

On 8 June Abbott asked the AEC to overturn the order because it was "unreasonable". Even if the AEC was right legally, it was unfair to force him to reveal his donors six years after the event, he wrote. In other words, forget your duty to the people and do me a favour, okay?

The AEC duly "set aside the decision to issue the notice". It gave the public no reason why and closed the file. It also closed the file on Abbott’s financial dealings with Terry Sharples.

On 21 June 2006 the Howard government passed laws raising the donation disclosure threshold from $1500 to $10,000, the amount Abbott’s donors gave.

This is the final in a series of edited extracts from Margo Kingston’s 2007 book, Still Not Happy, John (Penguin).