The NSW Liberals have lost $4.4m after operating an illegal slush fund

Barry O’Farrell was leading the Liberal Party at the time.

The NSW Electoral Commission has ruled that the Liberal Party operated a hefty, illegal slush fund during the 2011 state election campaign. As a result, the party has now been refused access to $4.4 million in government campaign funding for the next election.

A NSW Electoral Commission dispute panel, led by former NSW Appeals Court judge Keith Mason, yesterday rejected the Liberal Party request for access to the money, arguing the party was still refusing to supply the details of who made significant payments through the Free Enterprise Foundation.

$787,000 was funneled into the party through the foundation, which the panel was skeptical over, believing the money could have been donated by property developers, which was banned under NSW law.

The panel said it believed the Free Enterprise Foundation was “used by senior officials of the Liberal Party and an employed fund raiser to channel and disguise donations by major political donors some of whom were prohibited donors.”

The Liberal Party tried to claim that the Free Enterprise Foundation was a charity, which the panel quickly rejected.

The Electoral Commission said that it gave the Liberal Party an opportunity to fully disclose its donors for the 2011 election, but the party did not comply, resulting in the freezing of the funds.

As the federal election looms, the decision by the Electoral Commission could pave the way for more questions to be asked about where certain donations are coming from and concealed donors.

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