NSW ICAC: The Very Model Of A Modern Major Corruption Fighter

It’s worth considering, for a moment, just how much less we’d know about the way politics operates in 2014 if it wasn’t for New South Wales Independent Commission Against Corruption.

The most feared corruption-fighting agency in the nation was originally set up by the Liberal government of Nick Greiner. Greiner had campaigned strongly against the entrenched corruption of the Wran and Unsworth administrations, and ICAC was his solution.

The 80s was a dirty decade across many Australian state jurisdictions. The rot was deepest in Queensland, but New South Wales was scarcely clean either; under Wran, Corrective Services Minister Rex Jackson went to jail for bribery, and magistrate Murray Farquar was sent down for perverting the course of justice. A string of corruption scandals culminated in the Street Royal Commission.

The Commission Greiner created was and remains completely independent, with broad powers. Most matters are admissible for evidence and it has Royal Commission-like powers to poke its nose into suspicious affairs. Unlike other crime fighting bodies, ICAC is not beholden to the existing legal hierarchy. It doesn’t report to the Police Minister or the Premier, but rather directly to the Parliament itself.

Ironically, one of its first victims was Greiner himself – brought down over a finding of “technical corruption” concerning the appointment of a minister, Terry Metherell. But the Liberal Party can’t count itself unlucky: ICAC has been uncovering malfeasance across wide swathes of New South Wales public life for three decades.

Since 2010, ICAC has been investigating ministerial corruption and political donations. It’s proved a rich vein of improper material. ICAC famously discovered the spidery web of corruption woven by the ALP’s Eddie Obeid, and then moved on to probe illegal donations by property developers to the New South Wales Liberal Party.

In the process, a premier and two ministers of NSW, an assistant Treasurer of Australia, and 11 NSW MPs have been forced to either stand aside or resign altogether.

ICAC’s current investigation is examining the laundering of donations from property developers to the NSW Liberals, via the federal fundraising body known as the Free Enterprise Foundation. The investigation has now reached all the way to the office of Prime Minister Tony Abbott.

As we explored back in August, the Free Enterprise Foundation has well-documented financial links to the federal Liberal Party. Donations going to the Foundation mostly find their way back to the party itself.

The Free Enterprise Foundation also appears to be the NSW Libs’ favourite money laundry. By donating to the FEF, property developers were able to direct donations to the NSW branch without disclosing them. Money sent to the FEF then circled back to the NSW Liberal Party, neatly washed and dried.

At the centre of this activity was former NSW fundraiser, Paul Nicolaou. Nicolaou was a former bigwig in the Australian Hotels Association; he was also, believe it or not, in business with Eddie Obeid.

If you wanted to donate money to the NSW Liberals, Nicolaou was your man. Obviously, an ordinary donation was fine. But if you wanted discretion, that could be arranged. Nicolaou appears to have been the main driver behind the washing of donations through the Free Enterprise Foundation, for later return to the NSW branch.

Of course, donors to political parties aren’t always doing it for altruistic reasons. Donations won’t necessarily buy a friendly policy decision, but they can certainly secure access to party leaders – the decision-makers who count.

And so it was in New South Wales, where ICAC yesterday published a trail of emails between Nicolaou and the boss of big construction and property firm Brickworks, Lindsay Partridge.

Partridge was no fan of the carbon tax. Brickworks has a high energy bill, and its kilns emit plenty of greenhouse gases. Partridge was understandably keen to get rid of the tax, which the company estimated would cost it $9 million in 2012.

How do we know this? Because Partridge emailed Nicolaou to tell him. “Paul, Tell Tony to stick to his guns on no carbon tax,” Partridge wrote in 2011, adding that he was waging an internal political battle in the Business Council of Australia to keep the big business lobby opposed to the tax.

Partridge also wanted to meet with Abbott, which he thought only fair, given the hundreds of thousands of dollars brickworks was donating to the Liberal Party’s coffers.

So Nicolaou passed on the email to Abbott’s chief of staff, Peta Credlin.

Credlin was understandably delighted. The Coalition was running a ruthless no-carbon tax campaign, and here was a prominent Australian manufacturer signalling its displeasure with Labor’s policy. “Lindsay provided a great line for Question Time,” she wrote back. “Do you have a number that I might be able to contact him on and see if he was happy for us to use it …” she added.

Brickworks subsequently became a favourite backdrop for Tony Abbott in his colourful media appearances decrying the carbon tax. In May and then again in September 2011, he visited Austral Bricks factories, appearing in a hardhat alongside none other than Lindsay Patridge.

On September 1, 2011, for instance, Abbott held a media doorstop at the Sydney facility of Austral Bricks. “It's very good of Lindsay Partridge and the team from Austral Bricks to make me and my office so welcome today,” Abbott said. “This is one of the many businesses in one of the many industries which is going to be badly hit by the Prime Minister's toxic tax.”

Partridge did his part, too, sticking doggedly to the Coalition’s line. “Well, we very much appreciate the fact that Mr Abbott could visit our site today,” he told the assembled reporters. “I have been explaining to Tony as we have gone around and to our staff that the carbon tax will cost us $12.8 million per annum. That will put somewhere between $200 and $250 on the average house.”

This is how politics in modern Australia is conducted. Big business buys influence and access to a political party, in an attempt to change the laws of the land.

None of this is illegal, or unusual. The Credlin emails are not exactly a smoking gun. All they reveal is a chief-of-staff gathering material for her boss to do his job.

Business figures talk to politicians all the time. Indeed, back when Labor was trying to pass the first version of its emissions trading scheme, Penny Wong spent most of her time locked in board rooms, as she vainly tried to placate big mining and energy companies furious about the carbon price.

But, as Katharine Murphy points out today in a perceptive commentary, the ICAC revelations paint a vivid portrait of the way modern money politics works.

Access is available to the wealthy – at a price. In return for fat donations, business figures get the ear of political leaders. They can then influence those politicians to adopt policies that favour their vested interests.

Worse, ordinary citizens are largely unaware. Political donations laws in this country are opaque and lax. As the ICAC testimony reveals, donations are routinely transferred around state and federal jurisdictions, to get around the regulatory safeguards. Big donations can be squirreled into a series of smaller donations, to make sure they escape public disclosure.

In some states, such as Queensland, a government facing re-election can simply change the donation rules altogether, making it much easier for vested interests to donate.

As far as the Abbott government is concerned, this is just as business as usual. Abbott maintains that neither Peta Credlin nor other federal Liberal Party officials have done anything wrong. On a literal reading of current federal donations laws, that’s probably right.

That’s why we need tighter donations rules, with far more transparency, in which donors are forced to disclose.

A federal equivalent of ICAC is clearly necessary too. Does anyone believe corruption stops at the ACT border?

But to get a federal ICAC, we’ll need both major parties to agree to create one. Don’t hold your breath.