NSW gambles with democracy

By WENDY BACON

The NSW Independent Commission against Corruption (ICAC) has already established a strong case that NSW Labor disguised a prohibited $100,000 donation from Chinese businessman and property developer Huang Xiangmo by organising ‘straw donors’. A number of minor supporters and donors have admitted that they signed false declaration forms in 2015. One of these, property manager Leo Liao, tragically committed suicide rather than watch his family go through the pain of his exposure.

Like the picking apart of all scandals, the ICAC hearings are gripping. They are replete with accounts of bags of cash, secret meetings and agonising moments when evasions and lies are exposed by documentary evidence.

Cash in an Aldi bag
The Inquiry is focussed on a Chinese Friends of Labor dinner that was held not long before the 2015 NSW election. NSW Labor Community Relations Director Kevin Cheah told the Inquiry that after the dinner, Huang Xiangmo delivered $100,000 cash to then NSW General Secretary Jamie Clements in an Aldi bag. At the time of writing, Clements has not yet given evidence. He resigned as NSW General Secretary amidst sexual harassment allegations, which he denied, and was convicted and fined for a data breach in 2017.

Cheah told the Inquiry that Clements handed him the cash which he took home to count and that NSW Labor’s then Assistant Secretary Kaila Murnain warned him to take care in carrying the cash.

Murnain took over from Clements as General Secretary. She gave evidence that in 2016, she attended an urgent meeting with then NSW MP Ernest Wong who told her there were problems with donations from the dinner and that property developer Huang Xiangmo was involved. She immediately rang ex-Labor Senator Sam Dastyari, who had himself just resigned from the Federal shadow front bench over questions about his relationship with donors, including a personal payment by a private education college that is allegedly favoured by the Chinese government. Dastyari held the position of NSW Labor secretary before Clements. After receiving her call, Dastyari picked Murnain up and they talked in his car for an hour or so. In evidence, Dastyari struggled to recollect details of their conversation but remembered that Murnain was ‘distressed’ and told him that Wong had told her that there were problems with the Chinese Friends of Labor donations and specifically mentioned Huang’s involvement.  He advised her to seek legal advice from NSW Labor’s lawyers Holding Redlich. Despite being shown evidence that she did not meet Dastyari until after she met the lawyers, Murnain has stuck to her story and repeatedly denied she is fabricating evidence.

Although Dastyari remained in close contact with Murnain, his evidence was that he never spoke to her or anyone else about the matter again although he remained a Labor party Senator until late 2017. Given the seriousness of the discussion in the car, the memories of both Dastyari and Murnain are extraordinarily poor.

Murnain told the Commission that she met with Holding Redlich partner Ian Robertson on the advice of Dastyari and that he told her: ‘There is no need to do anything from here. Don’t record this meeting. Don’t put it in your diary. Forget the conversation happened with Ernest. I won’t be billing you for this either … and don’t tell anyone about it.” This evidence will be denied by Robertson. Recalled to the witness box, Murnain was cross-examined by Robertson’s lawyer who accused her of making up her evidence. Murnain’s manner was defiant as she stuck to her story, She eventually broke down. There is evidence that Murnain did seek advice from Robertson on that day but it was about another issue. The cross-examination continues.

Murnain has admitted that despite receiving information about the donations, she signed a response to questions from the NSW Electoral Commission which was prepared on her instructions by another party officeholder and which she knew was not correct. She admitted, she ‘quarantined’ what she knew and gave evidence that she talked to no one. She did not disclose her knowledge about the illegal donations to ICAC when first interviewed.  Murnain was the first scandal casualty when she suspended from her job on the recommendation of NSW Opposition Leader Jodi McKay.

Ex-NSW MP Ernest Wong, who hosted the Friends of Labor dinner, has not yet finished his evidence but has already been accused of lying several times to ICAC. He denied that he sold the ‘top dinner table’ for $100,000 to Huang but after several minutes of evasive answers was shown an email in which he stated that he had sold the table. It was on this table that Federal Opposition Leader Bill Shorten and then NSW Opposition Leader Luke Foley sat. Federal MP Chris Bowen and NSW MP Chris Minns also attended the dinner.

Witnesses who lie to ICAC run the risk of up to five years imprisonment, even if they are not charged with any other criminal offence.

Donations diversion
The ICAC Inquiry could run for another four weeks, and the ramifications for years. Once again, NSW Labor is being exposed as a corrupt organisation, albeit with many honest members who have little or no say. The scandal is convenient for the NSW Coalition government as it has tended to divert from another potentially explosive issue. A powerful NSW Independent Liquor and Gaming Authority [ILGA] inquiry will examine whether gambling giant Crown Resorts should be allowed to keep its Darling Harbour high roller casino licence after Nine media revealed that its Australian operations are in business with high roller junket operations involved with organised crime and money laundering. Incidentally, the Age has reported that Huang Xiangmo was an $800 million a year Crown high roller gambler.

The Inquiry will also decide if James Packer has breached his license when he agreed to sell his Crown stake to his ex-partner in Macau casinos, Lawrence Ho. If she finds that there is a problem, Inquiry judge Justice Patricia Bergin has been asked to recommend how to fix it.

It is unfortunate that the half-built giant Crown monument to the corruption-prone pastime of high roller gambling was not subject to serious scrutiny before approval was given for Crown and its partner Lendlease to build it. Back in 2012, James Packer considered the casino his ‘gift to Sydney’ for which he needed bipartisan support. With public relations assistance from News Corporation and sections of Fairfax Media, Packer was granted approval for his unsolicited bid by the Liberal government, but we should not forget that after the bid was announced, Labor was reported to be critical of the  Liberal government for not getting behind Packer quickly enough. Packer got his bipartisan support. Only the Greens opposed the casino.

Both major parties co-opted
In fact, Crown Resorts is a classic example of how big corporations have co-opted both major parties. Ex-NSW Labor secretaries, Karl Bitar and Mark Arbib, who was also a Labor Senator, still work for Crown.

Meanwhile, the Board is packed with business heavies including Helen Coonan, long-time Liberal Senator and Minister, who are paid high directors’ fees. Coonan joined the Crown board immediately after leaving Federal politics in 2011, not long before Packer made his casino push. She is also Chair of the Minerals Council of Australia. Crown Resorts and James’ mother Ros Packer have made huge donations to Liberal and Labor branches in NSW, Victoria and Western Australia, and federally.

NSW citizens are entitled to be angry about both the Crown and political donation scandals. But they are also sadly familiar. We might say rather than ‘business as usual’, it is ‘corruption as usual’ in NSW.

Since 2009, it has been illegal in NSW for property development and gambling companies to make donations to political parties. This reform only happened after a long campaign by the NSW Greens including ex-Senator Lee Rhiannon who established the Democracy for Sale site in 2002. This site, which recently reported that the major parties have received in $100 million in corporate donations since 2012, is now run by Queensland Senator Larissa Waters.

No sooner were the NSW reforms passed than party machines set about evading them. It’s only three years since ICAC made findings against ex-Labor Minister and ALP rightwing factional boss Jo Tripodi, former Liberal MP Chris Hartcher, other Liberal MPs and staffers as well as developers for corrupt conduct in relation to donations.

Both Liberal, National and Labor parties have also found ways of lawfully getting around NSW donation laws by channelling money through to Federal accounts run by State branches. So long as this money is ostensibly for Federal campaigns, it can be given to state branches. This, of course, does not mean that favours and deals at a state level are not involved with those donations. Two companies that have used this technique are Crown Resorts and Huang Xiangmo’s Yuhu Group.

Since 2014, Jamie’s mother Roslyn Packer has donated $1.17 million to the Liberal Party. Packer’s gambling company Crown (under various names) has given more than $1.7 million since 2000 to Liberal and Labor Federal, WA, Victorian and NSW branches.

Between 2012 and 2015, an Australian Electoral Commission search shows that Yuhu Group paid $574,000 in donations, $260,000 went to Liberal Party and LNP branches and the rest to various Labor branches. Both the NSW Liberal Party and NSW Labor received large donations. Apart from the $100,000 delivered in the Aldi bag, an ABC investigation showed that Huang Xiangmo and his family members donated hundreds of thousands more to both Liberal and Labor parties.

Huang’s involvement in NSW Property deals. 

Huang Xiangmo’s visa has now been cancelled by the Australian government who suspected him of being an agent of influence. The narrative around recent donations scandals has focused heavily on Chinese soft power strategies. While there is no doubt that attempts to curry favourable attitudes through donations and other gifts are on the agenda of some donors, we should not forget that a share in Sydney’s speculative property market and other investments are a key driver.  Huang made much of his fortune in China’s real estate boom and left for Australia, just before a corruption crackdown focussed on some of his developments there. Huang and other family members set up Yuhu Group. While Huang has left Australia, Yuhu Group’s website states that Yuhu is still involved in approved but yet-to-be-completed developments including the Bakehouse in Strathfield, Eastwood Shopping Centre, Pymble Corporate Centre and in the CBD. The processes through which all of these developments were approved should be scrutinised, given the level of his donations.

Like Crown Resorts, Huang saw the advantage of hiring people with political connections. When another ex-NSW Labor Secretary and Roads Minister Eric Roozendaal resigned from Parliament in 2013, he was made Vice President of Yuhu Group. Roozendaal’s resignation also followed some unpleasant ICAC appearances in connection with dealings with the Obeid family. While he was not found to be corrupt, his standing and credibility were damaged. He was replaced in NSW parliament by Ernest Wong, who had worked for NSW ALP head office and had been Mayor of Burwood Council in Sydney’s Inner West.

Roozendaal, who recently left Yuhu Group, has not yet been called to the NSW ICAC Inquiry but in the absence of Huang, who has declined to be interviewed from overseas, he must hold a wealth of information about all the contacts and transactions between Sam Dastyari, Federal MP Chris Bowen, NSW MP Chris Minns. Ex-MP Ernest Wong and Kaila Murnain – and Huang’s significant Liberal contacts for that matter.

In the witness box, Murnain became increasingly defensive and remembered almost nothing aside from the key parts of her statement. She has been a creature of the NSW Labor Party’s dominant right-wing machine since she was a teenager, was the first female Assistant Secretary of the NSW branch and its first General Secretary. She is now contemplating her future, just as Graham Richardson ( friend and political confidante), Karl Bitar, Mark Arbib, Eric Roozendaal, Sam Dastyari have done before her.  It remains to be seen if a friendly employer offers her a bolthole. Whether she was told to shut up or not, she appears to have done so. Sam Dastyari, Ernest Wong, James Clements and others further down the chain, all appear to have done the same. In doing so, they were following a long tradition of Labor party officials and politicians who know or strongly suspect that abuses happen, but for the sake of their own career and survival of the NSW Labor machine keep quiet. The problem is not merely a failing of a few individuals but extends far beyond this latest scandal. It is deeply cultural and resistant to change.

The current ICAC inquiry is exposing more blatantly illegal donations, corrupt acts and lies. Without NSW ICAC, this illegality would not have been investigated. But it is only part of a bigger picture. National donations reform is needed, but donations are just part of a bigger picture of anti-democratic hidden deals including those around property development, tollways, casinos and other gambling, stadiums, land clearing, water and mining.  Only systematic political governance reform, nationally and across every state and territory will deliver change.

The story has been updated since it was first published. Wendy Bacon is an independent investigative journalist and researcher who was previously the Professor of Journalism at UTS. She blogs at wendybacon.com .