ICAC Claims Another Scalp


Politics is full of surprises. But even hardened veterans of New South Wales’ famously rough and tumble political scene were astonished at the rapid fall from grace of Barry O’Farrell.

The respected Liberal Premier was at the height of his powers, heading a popular government with a huge majority, when he was brought undone by the apparently minor matter of a bottle of wine. When called to give evidence at ICAC this week, O’Farrell at first said he couldn’t remember receiving any wine, and certainly not from the dubious provenance of Australian Water Holdings’ Nick Di Girolamo.

Di Girolamo, let us recall, is at the centre of a searching ICAC investigation into the lobbying activities by which AWH sought to win a billion dollar contract from the NSW Government, an investigation that has already claimed the scalp of Assistant Treasurer Arthur Sinodinos.

The wine was not your average $20 bottle of claret. A 1959 Penfold’s Grange would be most ordinary voter’s idea of a memorable gift. “I’m certain I would remember receiving a bottle of Penfolds, particularly one that was my birth year,” O’Farrell had said, under oath.

And indeed, it turns out O’Farrell had appreciated the gift himself, taking the time to pen a heart-warming note to Di Girolamo. The hand-written note expressed his appreciation for all he has done, with that word “all” underlined for emphasis.

Once the note turned up, O’Farrell’s days were numbered. Given that ICAC now had evidence that directly contradicted O’Farrell’s own sworn testimony the day before, the Premier was in a parlous situation. At best, he had misled ICAC. At worst, he had perjured himself.

O’Farrell won office on a platform of cleaning up Labor’s corruption. He has repeatedly professed his commitment to ICAC and the investigations it undertakes. In just a few short minutes, the fateful decision was taken. O’Farrell convened a press conference, and fell on his sword.

As journalists scrambled to file copy, Liberal Party powerbrokers picked up their phones. The race was on to run the numbers on who will be the next premier.

The most likely winner is Treasurer Mike Baird, who enjoys the support of the NSW Liberal Party's Right faction and is the scion of a former federal parliamentarian Bruce Baird. As we prepared this story, news emerged that Baird and rival contender, Gladys Berejiklian, had stitched up a deal to install Baird as leader and Berejiklian as deputy. The caucus meets this afternoon.

Meanwhile, the political obituaries are being written. O’Farrell was by all accounts a humble and decent politician, rare enough qualities in everyday life, vanishingly so in public office. Indeed, it’s a measure of the debasement of public ethics that so many commentators and journalists were shocked that a politician should resign in such circumstances. Given all the lies we’re told on a daily basis by so many politicians, the theory goes, what was so bad about O’Farrell’s memory lapse?

This is the sentiment behind Tony Abbott’s remarks about O’Farrell yesterday, in which he lauded the resigning premier as a “man of honour” whose decision to step down was “an act of integrity … the like of which we have rarely seen in Australian politics.”

The problem for Abbott is that key players in the ICAC investigation are intimately involved in the New South Wales Liberal Party. Nick Di Girolamo was a major fundraiser for the Liberal Party. Donations flowed to the party (including to Federal Treasurer Joe Hockey’s campaign) from Australian Water Holdings, and those donations were sourced improperly from rorted expenses charged back to the taxpayer through Sydney Water.

More broadly, the O’Farrell resignation highlights the byzantine hidden world of government lobbying, which most citizens are only dimly aware of. Australia’s rules and laws around lobbying are not particularly stringent, and in many industries such as property, energy and defence, we see all the dark arts of influence peddling and revolving door appointments recognisable in the money politics of countries like the United States.

Australia has little transparency in political donations, poor disclosure of the personal finances of elected representatives, little formal scrutiny of lobbying. As the Greens’ John Kaye writes in NM today, there are few regulations to prevent politicians becoming lobbyists, or lobbyists from carrying out their activities without declaration.

The public policy trend towards privatisation has also created plenty of moral peril for legislators and bureaucrats. Where privatised contracts are drawn up that transfer the provision of public services to a company with little or no competition, and where the terms of that arrangement are contractually screened by the handy ruse of “commercial in confidence” clauses, a rich agar for the germ of corruption is spread.

Australian Water Holdings, for instance, appeared to spend precious little time creating better products or ensuring happy customers; instead, Di Girolamo and his colleagues put all of their energies into wooing premiers and ministers to give them a lucrative utilities contract, at taxpayers’ expense.

How much of this sort of thing goes on in other industries and other jurisdictions? It would be interesting to know what sort of meetings took place in the run up to the Victorian Labor government’s decision to appoint a contractor for its Wonthaggi desalination plant in 2009. One tantalising fact uncovered by ICAC is that Queensland Premier Campbell Newman was apparently requesting a $5,00 donation merely for the pleasure of a meeting. In a dark irony, current amendments to Queensland law empowering that state’s corruption watchdog, the Crime and Misconduct Commission, would probably prevent it from pursuing the sort of investigation that has brought down O’Farrell.

None of this has stopped journalists and politicians, especially on the conservative side of politics, from expressing their anger at a corruption watchdog that they believe has brought a good man down. It does not escape the notice of many that the other premier who was forced to resign after ICAC revelations was also a Liberal: Nick Greiner. A concerted push to attack ICAC and its processes appears to be on, driven by fury from the right.

New South Wales has long held an unsavoury reputation for the shadowy way politics there is conducted. O’Farrell’s fall is all the more tragic because his lapse was not grave in comparison to the scale of the malfeasance alleged to have been perpetrated by Eddie Obeid. Nonetheless, there have been troubling inconsistencies in O’Farrell’s testimony for some time.

O’Farrell had originally claimed he hardly knew Di Girolamo. He had repeatedly denied the gift of the bottle of Grange. Then it emerged they had met at least 10 times, called each other fortnightly, that O’Farrell had phoned Di Girolamo to thank him for it, and, of course, that he had penned a touching thankyou note. A serious “memory fail”, indeed.

That’s the thing about corruption investigations. They have a nasty habit of turning up all sorts of arrangements struck by those who would prefer them to stay in the shadows. Those who argue that, by roving here or there in search of wrong-doing, corruption agencies are pursuing vendettas or bringing down the innocent would do well to think about what happens when there is no-one around to ask such questions.

As legendary Queensland corruption fighter Tony Fitzgerald pointed out in an article last month, corruption agencies do make mistakes. These mistakes don’t justify removing or crimping their powers. “Both major political parties blame the Commission's imaginary bias when it exposes misconduct involving one of that party's members or exonerates an opposition member,” he pointed out.

Only a partisan could argue that the Independent Commission Against Corruption was responsible for Barry O’Farrell’s downfall. The truth is, as O’Farrell himself realised, that this was a single vehicle accident. The man responsible for the disaster is none other than O’Farrell himself.

Ben Eltham is New Matilda's National Affairs Correspondent.