NSW ICAC Hearings Look Like They've Spooked The Ponies In The Federal Stable

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How long will the Newcastle donations scandal run? Judging by recent testimony to the Independent Commission Against Corruption: for some time yet.

That’s clearly disquieting news for the Coalition, which is struggling in New South Wales under the strain of this year’s explosive evidence. ICAC revelations this year have already removed eight parliamentarians, the Newcastle Lord-Mayor and Australia’s Assistant Treasurer from political calculations. 

But it is the next round of ICAC hearings that must really have Coalition strategists worried.

ICAC has signaled it will be turning its attention in coming weeks from the dodgy donations in Newcastle to the federal sphere, as it looks into Liberal Party fundraising front organisation, the Free Enterprise Foundation.

When it does so, the political heat on Tony Abbott’s government will be turned up several notches.

As we explored a fortnight ago, there are clear, well-documented links between the Free Enterprise Foundation, Liberal donors – including Nathan Tinkler – and the federal Liberal Party itself. 

Federal Liberal Party director Brian Loughnane, the architect of the Coalition’s successful 2013 election campaign, has already been mentioned at the inquiry.

Perhaps that’s why Tony Abbott has displayed such obvious sensitivity on the issue. Back in April, at a media conference following the resignation of Liberal Premier Barry O’Farrell, Abbott snapped at a journalist asking if the New South Wales government “that was proving to be corrupt” could be trusted to deliver infrastructure.

The Prime Minister called the question an “entirely unjustified smear”, and asked the reporter to withdraw it.

Since then, a further four parliamentarians in the New South Wales government have been forced to the cross-benches.

Yesterday, Abbott was again showing the strain, as he attempted to shift the blame for the New South Wales scandals onto Labor.

Pointing out that it was the former Labor government of Kristina Keneally that introduced the laws banning donations from property developers that have caused the NSW Liberals so much trouble, Abbott said that “the problem was that the former state Labor government… introduced laws banning donations from developers.”

In a well-time rejoinder, Keneally tweeted back immediately that the Coalition had also voted for the funding laws.

In his interview with Ray Hadley, Abbott also tried to cast doubt on the definition of a property developer.

“Who exactly is a developer?” the Prime Minister asked. “That can sometimes be a difficult question.” 

It certainly can be a difficult question, as the ICAC testimony has shown. The problem, however, has more to do with the shambolic way in which New South Wales parliamentarians attempted to cover up what they knew to be improper donations, rather than the exact definition of a property developer.

The Newcastle scandal revolves around the Buildev corporation, controlled by Nathan Tinkler, that wanted to build a coal loader on the Hunter River. Given that Buildev wanted to develop such a property, and needed government approval to do that, it should have been obvious to everyone that donations from such an entity would be banned.

In fact, disgraced Newcastle MP Tim Owen did know Buildev was funding his campaign, and that this was illegal. He even called Buildev to chase up their promised funding. After Owen called Buildev manager Darren Williams, the money was duly transferred.

Abbott should know this. For the Prime Minister to be suggesting that there is some wriggle-room in this matter is curious indeed.

Abbott’s comments show just how vulnerable the federal Liberal Party will be once ICAC turns its scrutiny towards the Free Enterprise Foundation.

The problem is that the questionable donations appear to be common throughout the New South Wales branch of the party. Senior Liberal figures are closely associated with fundraising entities that appear to have accepted developer cash, including Joe Hockey’s North Sydney Forum, as well as the Free Enterprise Foundation itself. 

Corruption scandals rarely bring down entire governments, despite the media headlines they generate. But they contribute to a general air of sleaze and impropriety that can weigh down a government’s ratings, and distract from critical messages. 

During Julia Gillard’s ill-starred term in office, the Craig Thomson affair regularly occupied the mediascape. It dragged on, too, as Thomson repeatedly refused to come clean on his wrong-doing, instead insisting on trying to clear his name.

As we know, Thomson was eventually convicted of 65 counts of fraud owing to the improper use of Health Services Union credit cards. But the effect on Julia Gillard’s government far outweighed the relatively trivial nature of his malfeasance.

For months at a time, Gillard was forced to answer questions about Thomson and her support for him, even after he had stepped aside from the Labor Party. The stench spread as newspapers started to probe decades-old allegations regarding Julia Gillard’s home renovations.

There’s little need to revisit such allegations, beyond pointing out that mud tends to stick. Gillard has still yet to be cleared over the so-called AWU affair, more than a year after leaving the Lodge: the Coalition’s blatantly political Royal Commission into union corruption is still investigating.

If Gillard’s error-prone reign proves anything, it’s that, for a government behind in the polls and struggling to communicate effectively, the added weight of a corruption scandal can be heavy ballast, particularly for key Liberal figures already struggling to sell their messages. For Joe Hockey in particular, already badly wounded by his disastrous performance post-budget, any hint of impropriety could be unwelcome news indeed.

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