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Probing the political culture of corruption in NSW

  • 09 May 2014

The Independent Commission against Corruption in New South Wales is continuing to provide stunning insights into the compromised relationship between the major political parties and government in that state. It has moved on from Labor to the Liberal party and from political lobbying to political donations. But the essence of the story remains the same.

NSW Labor's reputation for probity could hardly fall any further given the revelations surrounding Eddie Obeid and Ian MacDonald, not to mention union leaders. Now it is the turn of the Liberal Party and the hearings have claimed the scalp of the Liberal State Premier, Barry O'Farrell over his failure to declare on his pecuniary interests register and to even recollect the gift to him of a $3000 bottle of 1959 Grange wine.

The gift came from Nick di Girolamo, the chairman of Australian Water Holdings and a Liberal Party fundraiser, and was given shortly after the Liberals' success in ousting Labor at the March 2011 state elections.

Previously Senator Arthur Sinodinos was forced to stand down as Assistant Minister for Finance in the Abbott Government in relation to his role in dealings with the same company. Three Central Coast MPs, including former minister Chris Hartcher, are now sitting on the cross-benches because of the wider donations scandal. And Marie Ficarra, once parliamentary secretary to the new Premier Mike Baird, has also just stood down.

At the heart of the donations scandal is the laundering of donations to the Liberal Party for its 2011 election campaign through the use of dodgy front companies. The MPs in question have set out to breach the 2009 rules specifically outlawing donations from developers. In general they have laundered up to $700,000 in donations by passing them through front companies, Eightbyfive and the Free Enterprise Foundation.

Not only have these MPs been implicated but so have party officials. Another Liberal Party fundraiser, Paul Nicolau has now resigned as chairman of the official Liberal Party fundraising organisation, the Millenium Fund. Nicolau is NSW executive director of another enthusiastic lobbyist, the Australian Hotels Association.

Even the new post-O'Farrell government is not squeaky clean as Girolamo was appointed to a government board by Baird when he was Treasurer, and reports circulated that his new deputy, Gladys Berejiklian, was close to certain Liberal-affiliated lobbyists. It was almost impossible for MPs not to be associated with lobbyists such as former Liberal MP, Michael Photios, because they were so influential in