ICAC, Watson and the Coalition slush funds

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The NSW ICAC has sent a shiver through the Federal Liberal Party as Geoffrey Watson SC starts to hone in on its network of slush funds, writes Sydney bureau chief Ross Jones.

A SHIVER has just run through the Coalition.

It took a little over two hours for counsel assisting the NSW ICAC, Geoffrey Watson SC, to lay bare the modus operandi of the Liberal Party’s fundraising laundromats.  

Experience says Watson does not make allegations he can’t substantiate with proof to spare.

Here’s a rundown.

On an almost minor, local level, fronts like Eightybyfive sent sham invoices for work not done to outfits who needed a favour:

If Watson is right (see above) the following NSW State MPs: Darren Webber, the member for Wyong; Chris Spence, the member for The Entrance; and Chris Hartcher, the member for Terrigal, all obtained their seats corruptly.

Too late now to overturn the results, apparently, but the NSW Libs will need to look out next round — or perhaps even in the by-elections that may be brought about by some stints in Cessnock Correctional.

The now infamous Australian Water Holdings (AWH) gave them a few bob, as did the now floundering mining tycoon Nathan Tinkler. Watson said Tinkler hoped Hartcher could smooth the way for the construction of a coal loading terminal in Newcastle.

The $5,000 Marie Ficarra accepted from property developer Tony Merhi – the same five grand that saw her stand aside as a member of the Liberal Party – went straight to Eightbyfive.

(Incidentally, ICAC heard that the name Eightbyfive was randomly-generated and has, in itself, no meaning at all.)

Once ICAC moved beyond the allegations of small town graft, things start to become much more interesting.

Hartcher’s office, Watson related, also channelled $165,000 to an entity called the Free Enterprise Foundation

The operation was set up as a discretionary trust in 1981 and, according to Watson:

Watson alleges the foundation’s main activity is to funnel funds from anonymous dirty donors straight into the Liberal Party's coffers.

But where did all this black money go?

Between 1 July 2010 and 30 June 2012, the NSW Liberal Party received $693,000 (mostly in the lead up to the 2011 state election); $30,000 to the SA Liberal Party, $11,000 to the Dame Pattie Menzies Liberal Foundation (which according to Watson, "found its way directly back into the coffers of the NSW Liberal Party"; and $388,000 to the Federal Liberal Party,

The $388,000 to the Federal Libs stands out.

Who put this money in and who benefitted from it?

Joe Hockey has his select little fundraising group, The North Sydney Forum, which at one time had AWH as a member. It later repaid money received from AWH.

We know it is only a hop step and jump, via Arthur Sinodinos, from AWH to the very heart of the Liberal Party.

Are the Federal Libs any different? With a bit of luck we will see.

Back in April 2011, Sandi Keane and Barry Everingham wrote a significant piece on IA discussing secret donations to the Liberal Party through the Free Enterprise Foundation, the Liberal Party investment entity, the Cormack Foundation, as well as the Greenfields Foundation, which the AEC investigated in 1998.

The AEC found the following concerning Greenfields:

Interestingly, this variable rental cover story seems to follow a similar pattern to another slush fund appearing in the media recently — that of Altum Pty Ltd, a wholly owned subsidiary of the LNP in Queensland. Altum allegedly played a key role in funding the election campaigns of several Sunshine Coast MPs, including Mal 'Ashbygate' Brough.

Apart from the Keane/Everingham piece, we recommend reading 28-04-2014 Operation Credo-Spicer transcript pp. 02620-02656 from 11.00am to 1.04pm (120.89 kB).

As ICAC starts to sniff around the edges of the Federal Liberal Party, you can imagine the pressure that will be brought to bear on the astounding and revelatory NSW Corruption Commission, which has performed its work with immense diligence and skill, and with neither fear nor favour.

We nominate Geoff Watson for Australian of the Year, hands down.

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