What's Hockey Hiding?

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The current hearings of the Independent Commission Against Corruption in New South Wales are not calculated to inspire hope in Australian democracy. Throughout this year, ICAC has uncovered one shocking revelation after another.

The corruption taint began with Labor’s Eddie Obeid and Ian Macdonald, whose backroom manipulations regarding coal mining leases stood to benefit the Obeid family an estimated $60 million. But the malfeasance quickly crossed party lines, drawing in a federal Liberal minister, Arthur Sinodinos, as well several New South Wales state ministers. Then the New South Wales premier, Barry O’Farrell, was forced to stand down after appearing to mislead ICAC over a bottle of expensive wine.

ICAC’s current investigation involves slush funds set up by the New South Wales Liberal Party to obscure donations to the party from property developers, a practice banned under New South Wales law. At the centre of the investigation is former Energy Minister Chris Hartcher, who appears to have been intimately involved with a special fund, mysteriously named ‘Eight by Five’.

Money that could not be directly donated to the Liberal Party flowed into Eight by Five, including from the now-notorious Australian Water Holdings. Eight by Five in turn donated generous sums to the New South Wales branch of the Liberal Party. Hartcher has already resigned, followed in short order by Police Minister Mike Gallacher.

Long riven by internal tensions and factional warfare, it now appears as though affairs inside the New South Wales Liberal party are every bit as disreputable as the right faction of the New South Wales Australian Labor Party.  That must be a concern for the federal Liberal Party. After all, the New South Wales branch of the Liberal Party is the home branch of Prime Minister Tony Abbott and Treasurer Joe Hockey.

Both Abbott and Hockey have appeared agitated, to say the least, when questioned by journalists about the federal implications of the New South Wales stink. In a press conference after the resignation of Barry O’Farrell, Abbott was asked by journalist Nicola Berkovic from The Australian whether he trusted the New South Wales government, “which is proving to be corrupt”.

The Prime Minister bristled. “That is an entirely unjustified smear,” he snapped. Since that press conference, of course, even more New South Wales government ministers and backbenchers have stood down. Just today, ICAC said it had discovered “a strong prima facie case of serious electoral funding irregularities" against Gallacher.

This is the context in which we learned yesterday, courtesy of an investigation by Fairfax Media, that Treasurer Joe Hockey has been charging sky-high prices for membership of a political fundraising club, the North Sydney Forum. In an article provocatively titled “Treasurer for sale”, the Sydney Morning Herald detailed a secret donations club, with undisclosed membership, in which intimate access to the Treasurer of Australia was offered in return for Liberal Party donations. According to the Sydney Morning Herald’s Sean Nicholls, “in return for annual fees of up to $22,000, members are rewarded with ‘VIP’ meetings with Mr Hockey, often in private boardrooms.”

Nicholls apparently sent a detailed list of questions to Hockey’s office, asking how and why the fundraising club worked. Top of the list: who was in the secret club? But instead of answers, Nicholls was met with fierce denials and the threat of a lawsuit.

In a statement released yesterday – under an official Commonwealth letterhead – Hockey’s office informed interested observers that he was calling his lawyers.

“Accusations made in Fairfax Media today are both offensive and repugnant,” he wrote. “The Treasurer will not let this distract him from the important task of putting the Budget together. As the matter is now in the hands of lawyers no further comment can be made.”

Let us recall that Hockey has been mentioned at ICAC before. Donations from Australian Water Holdings flowed to Hockey’s campaign fund, and were later repaid. Hockey has refused to give details about why and when the repayment was made.

New Matilda is not implying or suggesting any wrongdoing by Treasurer Hockey. Indeed, current federal regulations around political donations make fundraising clubs like the North Shore Forum perfectly legal.

But it is worth reflecting on the implications of one of the most senior ministers in the government of Australia suing a media outlet over a matter that is manifestly in the public interest. After all, this is a government which claims free speech is so important that it has to amend the Racial Discrimination Act to make it easier for newspaper columnists to have their say.

In the normal cut and thrust of politics, politicians do not sue media outlets over stories with which they disagree. That’s not to say it doesn’t happen, or that threats aren’t made. Clive Palmer is suing the Courier-Mail over an investigation into his business interests. Craig Thomson sued Fairfax over the brothel allegations that eventually led to his conviction. Julia Gillard threatened to sue a number of times over the Australian Workers Union scandal, although no proceedings commenced. 

When politicians sue, they usually do it to clamp down on debate. A defamation action signals that a politician is prepared to gamble on the risk that the facts of a particular allegation will be raked over in a court of law. That poses risks all of its own, for instance when uncomfortable details emerge in public for the first time.

Threatening to sue generally does damp down on media coverage of a particular issue. Other media outlets can be loathe to cover the allegation, for fear of being added to the action and therefore subject to expensive damages should an adverse finding be made. For a small, independent media outlet, a lost defamation decision can spell the end. Notoriously, Crikey founder Stephen Mayne was forced to sell his family home after a court found in favour of broadcaster Steve Price in a defamation suit.

Whatever the particulars, Hockey’s decision to bring in lawyers should alarm those citizens who are concerned about the health of Australia’s democracy. As ICAC has discovered in New South Wales, there appears to be no shortage of funny money looking for a way to influence public administration. And we know that under Sinodinos, the Assistant Treasurer working with Joe Hockey, the government decided to strip away Future of Financial Advice reforms to the financial planning sector, reforms that would have prevented corruption. Some think the benefit to the big banks and financial institutions by removing the reforms could run into the billions.

Of course, you might argue that big business types who want to influence Joe Hockey have no shortage of opportunities to press their case. This is one of the most pro-business governments in decades. Its Commission of Audit, convened by Hockey, was run by a former top lobbyist for big business, Tony Shepherd. Nor is Hockey exactly shy about boasting of his regular conversations with business leaders. As the saying goes, the real scandal about politics is what’s legal.

And that’s the real concern about the Hockey allegations. If his fundraising operations were entirely legal and above-board, why is he refusing to answer legitimate questions about who attended, who donated, and what was discussed? If Hockey genuinely believes he is innocent, why not simply put forward the available evidence that clears this up? Why stonewall? Why sue?

In short, what has Joe Hockey got to hide?

Ben Eltham

Ben Eltham is New Matilda's National Affairs Correspondent.

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