ICAC Hearings: Just When They Thought It Was Safe To Go Back To Business

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ICAC has struck again.

Just when New South Wales politicians thought it was safe to resume business as usual, the state’s anti-corruption body has hosted another explosive day of revelations.

While most political minds yesterday were turned to Canberra and the disquieting thought of George Brandis reading their metadata, in Sydney, the Independent Commission Against Corruption was opening a new round of hearings.

Journalists and observers following ICAC this year have come to expect salacious evidence at virtually every opportunity. Yesterday didn’t disappoint. There were brown paper envelopes stuffed full of cash, incriminating emails from disgraced mining billionaire Nathan Tinkler, and a conspiracy to route illegal donations to the Liberal Party that appears to reach all the way to top of the federal party.

By day’s end, two more Liberal MPs, Tim Owen and Andrew Cornwell, had been stood aside from Mike Baird’s government, joining an increasingly crowded cross-bench. There are now no fewer than seven Coalition parliamentarians standing aside from their normal duties in New South Wales, after featuring in ICAC’s investigations.

As had been hinted at in previous sittings, ICAC is taking a close interest in the goings-on in and around Newcastle at the last state election.

Tim Owen is the member for Newcastle, while Andrew Cornwell is the Liberal representative for the nearby seat of Charlestown. Until yesterday, Cornwell was also a government Whip. Today, his political career is over, after admitting using a $10,000 gift to pay personal income tax.

It looks as though Owen’s Newcastle campaign was partly funded by funny money.

To quote ICAC’s Geoffrey Watson, SC: “We are confident in saying that it will be established that the Liberal Party campaign for the seat of Newcastle was partly funded from illegal sources.”

Why is ICAC so confident? Well, it turns out Tim Owen’s campaign manager, Hugh Thomson, has rolled over. He’s agreed to give evidence in return for indemnity from prosecution.

Under New South Wales law, it has been illegal for political parties to accept donations from property developers since 2009. As previous ICAC hearings have demonstrated, that hasn’t stopped a number of property developers trying to donate to both the Liberal Party and the ALP.

ICAC says it has evidence of an email implicating federal Liberal Party director Brian Loughnane – the husband of Tony Abbott’s chief of staff, Peta Credlin – in the routing of donations through a Canberra-based fundraising foundation called the Free Enterprise Foundation.

The Free Enterprise Foundation, an “associated entity” headquartered in Canberra, has close links to the Liberal Party, and is disclosed as such to the Australian Electoral Commission.

ICAC is alleging that it was the route via which donations from property developers and mining companies flowed to the state branch, including $53,000 from Tinkler.

Why was Tinkler involved? He wanted state approval to build a coal terminal on the Hunter River, so that he could export coal from the controversial Maules Creek mine.

When his lobbying of the state Labor government via Joe Tripodi failed to win the approval, Tinkler changed tactics and decided to back Liberal candidates in the upcoming 2011 election.

The fact that illegal donations appear to have flowed from Tinkler to the state or federal Liberal Party through the Free Enterprise Foundation will be extremely worrying for the top brass of the Liberal Party, including Loughnane himself.

The Free Enterprise Foundation is well known as a Liberal Party fundraising body. As the AEC declarations make clear, essentially all of the donations given to the Foundation eventually make their way to state and federal branches of the party.

In June, for instance, the ABC reported on a $200,000 donation from property and entertainment tycoon Reg Grundy.

As federal director, Loughnane was reported to have told Grundy to send the donation to the Free Enterprise Foundation as a conduit to the federal Liberal Party. The donation was made by the Grundy family’s investment vehicle, Akira Investments Ltd.

In a statement to the ABC’s Peter Lloyd and Alison McClymont, Akira director Jo Cullen-Cronshaw said that “I made enquiries of Mr Brian Loughnane and was advised by him that the best way to maintain their privacy would be to make the donation through the Free Enterprise Foundation.”

In 2011-12, the Free Enterprise Foundation received a $500,000 donation from private hospitals mogul Paul Ramsay. As Mike Seccombe reported in 2013 for the now sadly defunct Global Mail, the donation was then channelled on to the federal Liberal Party, which received $490,000 from the Free Enterprise Foundation in that year.

The Guardian’s Nick Evershed has produced an infographic that vividly depicts the money trails linking the Free Enterprise Foundation and the Liberal Party. All of the transactions described above, and many more, are detailed. 

The Free Enterprise Foundation has appeared in ICAC testimony before. In April, it was revealed that Paul Nicolaou, the former head of the Australian Hotels Association, was using the Free Enterprise Foundation as a conduit for Liberal Party donations, via the fundraising body that he controlled known as the Millennium Forum.

In the spidery web of corruption which seems to touch nearly everything in New South Wales politics, it’s no surprise to learn that Nicolaou was involved with Eddie Obeid. He was the man responsible for lobbying Queensland Premier (and former Brisbane lord mayor) Campbell Newman on behalf of the Obeid-associated Australian Water Holdings.

As we know, Australian Water Holdings was the company that led to the downfall of former Assistant Treasurer Arthur Sinodinos, who was a director of AWH at the time donations from AWH flowed to the New South Wales Liberal Party.

With several weeks of ICAC sittings still to go, everyone in the New South Wales Liberal Party must be worried about where the investigation might lead.

Even if Loughnane can plausibly claim to have done nothing wrong – donations to associated entities like the Free Enterprise Foundation are perfectly legal under Commonweal law – the very fact the federal director of the Liberal Party has been mentioned in evidence will prove uncomfortable in itself.

How much more does ICAC know? In particular, much will turn on the evidence of Hugh Thomson, who has turned states and will now give evidence against his former colleagues.

We watch with interest.

Ben Eltham

Ben Eltham is New Matilda's National Affairs Correspondent.

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