Mick Costa is not accused of any wrongdoing

I have to make clear, right at the start, that former Australian Water Holdings chairman (and sometime Labor Council Secretary, NSW treasurer, transport minister and police minister) Michael ‘Mick’ Costa is not accused of any wrongdoing. In fact, the picture painted in various balanced and responsible media accounts of the AWH affair is that he was a sort of corporate do-gooder who took over the chairmanship of the company after Arthur Sinodinos resigned, and he tried to put matters in order.

The circumstances under which Costa came to be chairman are curious. On April 14, 2011, Michael Costa’s Hunter Valley property was the subject of a violent home invasion. Costa had driven to an appointment leaving his wife and two children at the property. The masked assailant entered, tied up his wife, threatened her with rape tied her up and then left in her car, taking with him 28 bottles of wine. Fortunately Mrs Costa freed herself and raised the alarm and the police attended promptly. It took them some weeks to arrest Mark Noel Sheehan, who was living rough in the bush not far from Chez Costa. Sheehan stood trial and got eight, though they say he’ll probably be out next year.

At any rate, as Mick Costa tells it, it was after the home invasion that his old ALP factional ally, Eddie ‘He Who Must Be’ Obeid, rang him to offer condolences on his family’s ordeal and later asked him if he wouldn’t mind being chairman of AWH. This involved something of a reconciliation because, according to Costa, there had been some “bad blood” between them around the time he (Costa), left office – but he says he isn’t a “hater” and decided to take the job. On Eddie’s side, the fact that Costa, as state treasurer, had written letters which accused Sydney Water of not wanting competition and demanding that it enter mediation with AWH, might have played a part in the job offer. (There is no suggestion that Costa, as treasurer, was motivated by anything other than ideological commitment to competition.)

One has to wonder at Mick’s judgement of risk and character. By mid-2011, the Obeid’s were very much on the nose. After years of allegations and revelations about the family’s business deals and borrowings, Eddie Obeid, along with Joe Tripodi, Eric Roozendaal and other key NSW Right figures were widely viewed as the reason why Labor lost the election to the Coalition so spectacularly. Eddie had been a byword for shiftiness and political thuggery for years. His son Moses was before the Supreme Court over a small matter of selling City of Sydney’s smartpole design overseas without paying royalties.

In spite of all this Mick agreed to take the helm at AWH. Did he ask Eddie why he was so keen for him to take on this job? Did he have any suspicions as to whether the Obeid family had some personal stake in the outcome? Did he ask Eddie if they did? Or did Mick just take it on because of an intellectual commitment to privatisation and market fundamentalism (and presumably because the salary would come in handy)? We must accept that this last was the case because Mick Costa is not accused of any wrongdoing.

Or maybe, as Conjoint Associate Professor of “competition policy” and “regulatory environments” at the University of Newcastle, a position to which he was appointed after he retired to the Hunter, Mick saw the job as a research project. He has, after all, the zeal of the convert in relation to privatisation and its glories, having made the journey all the way from orthodox Trotskyist to poster boy for market fundamentalism and even climate change denial.

Mick Costa actually took over the chairmanship from Sinodinos in November 2011, by which time the wheels were falling off the AWH scam. Dr Kerry ‘The Bitch’ Schott – the decent, even heroic, bureaucrat heading up Sydney Water – had fought the AWH looters tooth and nail right from the get-go. Eventually, in 2012, Sydney Water fobbed off AWH with a small contract. The Big Public-Private Partnership continued to elude them.

By then board member and Liberal insider Nick Di Girolamo’s habit of charging everything from Grange Hermitage to donations to the Liberal Party to the public purse had become an embarrassment to the whole operation and Barry O’Farrell still wasn’t coming across with the goods. Some new players, conned into throwing their own actual money into AWH, were starting to get very edgy. The Big PPP – the one that was going to make the Obeids and Sinodinos very rich indeed – was slipping out of reach.

This is the point at which Eddie asks Mick if he wouldn’t mind taking over as chairman and Mick comes in, cuts the salaries in half, goes through the books, and tries to clean up AWH’s act. When, in 2012, a firm of accountants employed by some potential investors to assess whether AWH was a viable proposition reported  the company was “currently insolvent and living in an overhead world they can’t afford”, Mick strongly disputed this assessment (according to an article in The Australian). Mick had became Eddie’s very last, doomed, chance of pulling of The Big PPP. No doubt he did this unwittingly. Mick Costa is not accused of any wrongdoing.