ICAC: Arthur Sinodinos stood to make 'tens of millions' from Australian Water Holdings deal
Date March 17, 2014 28 reading now
Kate McClymont, Michaela Whitbourn and Jonathan Swan
.. VIDEO .. 'Corruption acquaints a man with strange bedfellows' RAW VISION: counsel assisting, Geoffrey Watson, SC addresses ICAC hearing in relation to corruption allegations against senior Labor and Liberal figures including Assistant Treasurer Arthur Sinodinos.
Labor and Liberal figures including federal Assistant Treasurer Arthur Sinodinos stood to make tens of millions of dollars from a company linked to the family of crooked former powerbroker Eddie Obeid, a corruption inquiry has heard.
Senator Sinodinos, then NSW treasurer of the Liberal Party, was installed on the board of the Obeid-linked Australian Water Holdings (AWH) in 2008 ‘‘to open lines of communication with the Liberal Party’’, the Independent Commission Against Corruption heard on Monday.
‘‘There will be evidence that he tried to do so,’’ counsel assisting, Geoffrey Watson, SC, said in his opening address. ICAC Commissioner the Hon Megan Latham during the opening address for the investigation into Australian Water Holdings and the conduct of several ministers.
ICAC Commissioner the Hon Megan Latham during the opening address for the investigation into Australian Water Holdings and the conduct of several ministers. Photo: Nick Moir
The former AWH chairman was earning $200,000 a year for ‘‘a couple of week’s work’’ and would have ‘‘enjoyed a $10 or $20 million payday’’ if Australian Water had won a lucrative contract with the state government.
Senator Sinodinos has since abandoned his rights to shares in the water infrastructure company and denies any wrongdoing. ‘‘[He] will attend ICAC as a witness and is looking forward to assisting the inquiry,’’ his spokeswoman said.
Mr Watson alleged the inquiry would show corruption across political party lines. The company assiduously lobbied the Coalition government after the March 2011 state election. ICAC Council assisting , Geoffrey Watson, SC, during the opening address for the investigation into Sydney Water and the conduct of several ministers.
ICAC Council assisting, Geoffrey Watson, SC, during the opening address for the investigation into Australian Water Holdings and the conduct of several ministers. Photo: Nick Moir
‘‘It might be said – readapting Shakespeare – that corruption ‘acquaints a man with strange bedfellows,’’’ he said.
The ICAC is examining allegations that the Obeids were ‘‘secret stakeholders’’ in AWH and that Mr Obeid corruptly lobbied Labor colleagues on behalf of the company. The inquiry heard the family stood to make up to $60 million if the government entered into a partnership with AWH.
Mr Obeid’s political allies, Joe Tripodi and Tony Kelly, allegedly helped to doctor a cabinet minute in 2010 to benefit AWH, which was ‘‘tantamount to fraud’’.
ICAC witness: Senator Arthur Sinodinos in Canberra on Monday. Photo: Andrew Meares
Mr Watson said Mr Obeid had tried to ‘‘eliminate’’ two senior public servants who stood in his way.
‘‘Of all Mr Obeid’s machinations, the most foul is his involvement in an attempt to ruin the reputations of Dr Kerry Schott and Ron Quill of Sydney Water,’’ he said.
Mr Obeid allegedly told then Labor minister Phil Costa that ‘‘you need to sack that bitch’’, in a reference to Dr Schott, and that Liberal MP Chris Hartcher would make a corruption complaint against her. Mr Watson said that Mr Obeid was ‘‘right on the money’’ and an anonymous complaint was made to the ICAC. ‘‘The source of that complaint is very interesting. This is where the misconduct leaps across party lines,’’ he said.
A second ICAC inquiry, starting on April 28, will examine allegations AWH and other ‘‘unscrupulous businessmen’’ paid into a slush fund linked to Mr Hartcher in exchange for favourable treatment.
The ICAC heard that Senator Sinodinos’ ‘‘other involvements’’ will come under scrutiny.
But Mr Watson said that former Labor treasurer Michael Costa, who is also a former chairman of AWH, was not accused of any wrongdoing and ‘‘his role seems to have been a positive one’’.
There was also ‘‘no evidence to implicate’’ Liberal Premier Barry O’Farrell and his former finance minister Greg Pearce in corruption.
The inquiry heard that Nick Di Girolamo, a prominent Liberal Party fund-raiser and Obeid associate, transformed Australian Water from a non-profit venture into a commercial operation charging exorbitant ‘‘administration costs’’ to Sydney Water. This included $75,636 in donations made by AWH to the Liberal Party.
‘‘It seems that Sydney Water has – unwillingly, unknowingly – been a principal Liberal Party donor,’’ Mr Watson said. The party said on Monday it would refund Sydney Water.
Mr Di Girolamo became chief executive of AWH – then called the Rouse Hill Infrastructure Consortium – in early 2007. He took a salary of $1.1 million and bonuses of up to $275,000 when the company had around 10 employees and only one contract. ‘‘Salaries of that size were absurdly high. The Prime Minister of Australia was being paid $330,000 a year,’’ Mr Watson said.
The Obeids allegedly became ‘‘secret stakeholders’’ in AWH in 2010 when they agreed to pay $3 million for a 30 per cent stake in the company. But the family insist the money was a loan. One of the terms of the ‘‘loan’’ agreement was that Mr Obeid’s youngest son, Eddie jnr, would be employed by AWH on a salary of $350,000 a year.
Mr Watson said that Mr Di Girolamo used some of the $3 million to pay off debts relating to a racehorse called Partners In Crime.
The first witness in the three-week inquiry will be called on Tuesday.
"Corruption NSW" Two NSW Liberal MPs stand aside from the party following ICAC revelations on campaign funding
By state political reporter Sarah Gerathy August 6, 2014, 3:15 pm
[.. image i wish i could figure out how to reproduce ..] Newcastle Liberal MP Tim Owen announced during the last ICAC hearings that he would not recontest the 2015 state election. ABC
Two more New South Wales Government MPs have stood aside from the parliamentary Liberal Party after explosive revelations at the Independent Commission Against Corruption (ICAC) hearing into campaign funding.
Premier Mike Baird has accepted the decision of Newcastle MP Tim Owen and Government Whip and Member for Charlestown Andrew Cornwell to move to the crossbenches while the inquiry continues.
Allegations that illegal donations from developers were used to bankroll Mr Owen's election campaign in 2011 brought into question the validity of the poll's results, ICAC heard.
In his opening address, counsel assisting the inquiry Geoffrey Watson SC said there were serious irregularities in the funding of the Liberal MP's campaign.
He also revealed that the funding of the neighbouring seat of Charlestown, which is now held by Government whip Andrew Cornwell, was being investigated.
"The evidence acquired so far clearly shows serious irregularities in the way those campaigns were conducted," Mr Watson said.
"Given what went on, a real question arises as to the validity of the result of the election in the seat of Newcastle."
The hearing today took an unexpected twist when Mr Watson revealed Mr Owen's campaign manager and Newcastle lawyer Hugh Thomson had helped expose the corrupt motivation behind the campaign.
ICAC was told Mr Thomson admitted to being involved in an illegal donations scheme, in exchange for protection from prosecution.
Mr Watson also told the hearing that the former police minister Mike Gallacher knew about the illegal funding arrangements in Newcastle and in fact suggested some of them.
He says the former energy minister Chris Hartcher also knew what was going on.
Mr Watson told ICAC that the Government whip, Mr Cornwell, admitted Newcastle Mayor Jeff McCloy arranged a meeting in his car and handed over $10,000 in cash.
He said while there was no evidence Mr Cornwell gave any preferences to the Mayor, his actions were unwise but that was due to inexperience.
In a statement, Premier Mike Baird said he had accepted Mr Owen's and Mr Cornwell's decisions.
"I have accepted the decisions of Tim Owen and Andrew Cornwell to stand aside from the parliamentary Liberal Party and relinquish any parliamentary positions they currently hold," a statement said.
"I make no judgement regarding the outcome of Operation Spicer.
"However, it will take time for the allegations to be resolved, and I am not prepared to allow this to become a distraction for the party or the Government."
The corruption watchdog has heard that businessman Nathan Tinkler was known as "the big man" by Liberal party figures looking to secretly bankroll the 2011 campaign for the seat of Newcastle.
Mr Tinkler and his development firm Buildev are among those banned donors who are accused of secretly donating to the campaign of Newcastle Liberal MP Tim Owen.
At the time Buildev was lobbying to build a coal loader in the Port of Newcastle.
Mr Watson has told the hearing that the story of what happened in Newcastle in 2011 is complex, but "a number of the threads tie back to one person, Nathan Tinkler".
Mr Watson said the evidence shows "it was he who had the ultimate control " and "who made the decision to fund the illegal activities".
He said there was also evidence implicating Mr Tinkler in making a number of large payments for use by the Liberal Party.
Mr Watson said that also involved Mr Gallacher and Mr Hartcher.
He read out a text message from Mr Thomson to Mr Gallacher, which asked about a $120,000 payment from "the big man".
Mr Watson said that referred to Mr Tinkler, who was also called "the big fish" by Mr Gallacher.
Mr Tinkler and Buildev have also been accused of involvement in a smear campaign against the then Labor MP for Newcastle, Jodi McKay.
The commission heard it was not just the Liberal Party that was involved in such activities.
"The Labor party was, through a couple of its politicians, involved as well," said Mr Watson.
He said the inquiry would examine the activities of two former Labor MPs, Joe Tripodi and Eric Roozendaal.
Mr Watson said the evidence suggested that each man improperly took steps to directly help Buildev.
A protege of Joe Tripodi, Ian MacNamara, who is now Opposition Leader John Robertson's chief of staff, has also been potentially implicated in the smear campaign.
NSW Government whip to appear at ICAC over 'slush funds'
Mr Cornwell, his property-developer father and a Liberal Party campaign manager are all due to appear in the witness box as the ICAC inquiry before Commissioner Megan Latham continues.
The corruption watchdog is investigating alleged Liberal Party slush funds and donations for political favours.
Operation Spicer had adjourned for two months after three-and-a-half weeks of explosive public hearings in May rocked the Government and claimed several political scalps, including that of then-premier Barry O'Farrell.
This next phase of the inquiry, which is expected to run for at least three weeks, will largely focus on alleged dodgy dealings in the seat of Newcastle in the lead up to the 2011 election.
It is examining whether Mr Owen's campaign was secretly bankrolled by donations from banned donors including Buildev and its majority shareholder Nathan Tinkler, Newcastle Lord Mayor and property developer Jeff McCloy and Hunter Land founder Hilton Grugeon.
Mr Owen announced during the last hearings he would not recontest his seat at next year's election because he now believed it was "highly likely" that prohibited donors had contributed to his campaign, although he insisted it was without his knowledge.
Among those scheduled to give evidence at the ICAC this week were Charlestown MP and Government whip Andrew Cornwell, who was the branch president of the Liberal Party in Newcastle before stepping aside to run for his seat in 2011.
His wife Samantha Brookes and father Brien Cornwell, who was a local property developer and a volunteer on Mr Owen's campaign, will also appear in the witness box.
Rodney Bosman, who ran the Liberal Party's Central Coast and Hunter campaigns in the 2011 election, has now been sworn in. He is the first witness to appear.
Former NSW ministers' actions under scrutiny
The spotlight will also once again be on former NSW energy minister Chris Hartcher and former police minister Mike Gallacher.
ICAC will examine whether the pair solicited and received donations from prohibited donors for use in the Liberals 2011 state election campaign, including in the seat of Newcastle.
It will also look at whether they used their power and influence, or attempted to use their power and influence, to do favours for Liberal Party donors.
This inquiry has already claimed the ministerial careers of both men.
Mr Gallacher resigned during the last hearings after counsel assisting the ICAC Geoffrey Watson SC said there was "strong prima facie evidence" implicating him in serious electoral funding irregularities.
Mr Hartcher quit the frontbench in December 2013 when the ICAC raided his Central Coast office.
His fellow Central Coast MPs Darren Webber and Chris Spence had already been sitting on the crossbench after their offices were raided earlier in the year.
Operation focus on Buildev, Tinkler and Free Enterprise Foundation
Operation Spicer began as an investigation into an alleged Liberal Party slush fund Eightbyfive that was being run out of Mr Hartcher's office.
It has since broadened its scope to look at various ways Liberal Party figures were allegedly skirting laws that banned donations from developers in the lead up to the 2011 state election.
One of the organisations set for more scrutiny in the latest round of public hearings is the Liberal Party-linked Free Enterprise Foundation.
ICAC will examine whether members or associates of the Liberal Party used the Free Enterprise Foundation as a means of receiving and disguising banned donations in the lead up to the 2011 campaign.
It will also look at whether certain companies and persons, including Buildev and Mr Tinkler, used or attempted to use the Free Enterprise Foundation as a means of making donations to the Liberal Party with the intention of attempting to improperly influence certain members of Parliament.
The inquiry has previously heard evidence that the Free Enterprise foundation was used to "rinse" donations from banned donors, and that the NSW Liberal Party's finance director Simon McInnes and the former head of the party's chief fundraising arm, Paul Nicolaou, were in on the scheme.
In his opening address at the first set of hearings, Mr Watson ominously asked: "Who was responsible for this misuse of the Free Enterprise Foundation, who else knew about it inside the Liberal Party?"
He said he would try to get to the bottom of that question.
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