ICAC finds several NSW politicians tried to evade election funding laws

Former police minister Mike Gallacher is among those the ICAC found tried to evade political donation laws

The NSW Independent Commission Against Corruption (ICAC) investigation into prohibited political donations, Operation Spicer, which saw 10 state government MPs stand aside or resign as ministers, and cost former premier Barry O’Farrell his job, has found 14 people, including senior Liberal politicians Michael Gallacher and Christopher Hartcher acted with the intention of evading the election funding laws to take banned donations from property developers.

Gallacher, the former police minister, is the only politician embroiled in Operation Spicer who remains in parliament.

The report into the NSW Liberal Party’s 2011 state election campaign was tabled in the NSW parliament today, nearly two years after hearings concluded.

The investigation was delayed due to protracted legal wrangling that went all the way to the High Court.

The ICAC also investigated what the report calls “other matters” and made a finding of “serious corrupt conduct” against former ALP powerbroker Joe Tripodi. The Commission found he misused his position in parliament to pass on a confidential Treasury report to Darren Williams from developer Buildev in relation to Newcastle Port. The company was owned by one-time Newcastle coal billionaire Nathan Tinkler.

Tripodi is the only person found corrupt in this investigation. The ICAC recommends criminal charges for misconduct in public office against Tripodi. He was previously found to be corrupt by the ICAC during an investigation into Circular Quay cafe leases owned by another former ALP powerbroker Eddie Obeid.

The lack of corruption findings against other MPs is partly due to 2015’s High Court case against ICAC, which essentially concluded that breaching political donation laws could not be found as corrupt conduct under the Commission’s existing powers.

Among those named in the ICAC’s evasion findings is former Newcastle mayor and developer Jeff McCloy, who said he felt like a “walking ATM” for Liberal Party donations. During its investigation, the ICAC heard that McCloy was involved in a clandestine meeting involving former Liberal MP Andrew Cornwell, held in the mayor’s Bentley, where a $10,000 wad of cash was given to the MP. The mayor denied the claims.

The Commission recommends the Director of Public Prosecutions (DPP) investigate the potential criminal prosecution of former resources and energy minister Chris Hartcher for larceny.

The allegation of stealing against Hartcher involves a $4000 donation from a Sydney accountant, made in three installments in an attempt to get around a cap on political donations to individuals cap. The ICAC concluded that the way the cheques were dealt with was “inconsistent with an intention on the part of Mr Hartcher to apply the $4000 for the benefit of the NSW Liberal Party”.

The ICAC also recommended criminal charges be considered against Cornwell and his wife, Samantha Brookes, for giving false or misleading evidence to the commission, as well as similar charges for businessman Timothy Gunasinghe, former Gallacher advisor Timothy Koelma and building industry supplier William Saddington.

Cornwell and Brookes allegedly lied after receiving $10,120 from developer Hilton Grugeon. Cornwell told the ICAC that he was was about deliver Christmas presents, worth between $20 and $100, to a number of people when he realised he was one present short. He said that, on the spur of the moment, they decided to include a painting his wife had been given by his parents earlier that year, believing it was worth a few hundred dollars. He gave the painting to Grugeon, whom he barely knew, saying it was “dumb luck” that the developer scored the painting.

Cornwell said Grugeon subsequently rang and insisted on paying for the painting. The $10,120 was deposited in an account belonging to his wife and subsequently used to pay the MP’s tax bill.

The ICAC concluded that Cornwell’s testimony was untrue and the painting was procured after his wife’s birthday to use for political fundraising.

“Andrew Cornwell, Ms Brookes and Mr Grugeon were parties to an arrangement involving the pretence that a payment of $10,120 made in early 2011 by Mr Grugeon, a property
developer, was for a painting. The $10,120 was in fact a political donation made by Mr Grugeon to fund Andrew Cornwell’s 2011 NSW state election campaign,” the Commission found.

“In participating in this arrangement, Mr Grugeon intended to evade Election Funding Act laws relating to the ban on the making of donations by property developers and the requirement for disclosure of political donations.”

The ICAC did not make any adverse findings against federal senator Arthur Sinodinos, who was honorary treasurer of the NSW Liberal Party during the period under investigation.

Here’s part of what else the ICAC says in its media statement today:

The ICAC’s findings include that Raymond Carter, Andrew Cornwell, Garry Edwards, the Hon Michael Gallacher MLC, Nabil Gazal Jnr, Nicholas Gazal, Hilton Grugeon, Christopher Hartcher, Timothy Koelma, Jeffrey McCloy, Timothy Owen, Christopher Spence, Hugh Thomson and Darren Williams acted with the intention of evading laws under the Election Funding, Expenditure and Disclosures Act 1981 (the election funding laws) relating to the disclosure of political donations and the ban on donations from property developers.

Messrs Grugeon, Hartcher, Koelma, McCloy, Owen, Thomson and Williams were also found to have acted with the intention of evading the election funding laws relating to caps on political donations.

The Commission also found that Craig Baumann, Nicholas Di Girolamo, Troy Palmer and Darren Webber acted with the intention of evading the election funding laws relating to the disclosure of political donations and that Bart Bassett knowingly solicited a political donation from a property developer.

The ICAC found that during November and December 2010 the Free Enterprise Foundation was used to channel donations to the NSW Liberal Party for its 2011 state election campaign so that the identity of the true donors was disguised. A substantial portion of the $693,000 provided by the foundation and used by the NSW Liberal Party in the campaign originated from donors who were property developers and, therefore, prohibited donors under the election funding laws.

The ICAC also found that there were payments made by property developers, who were prohibited donors, to help fund NSW Liberal Party candidates’ campaigns in the Hunter. The true nature of these payments was disguised, for example, as consultancy services or funnelled through another company with the intention of evading the election funding laws.

The above are findings of fact, not findings of corrupt conduct.

You can read the full ICAC report here.