The New South Wales premier’s secret relationship with former MP Daryl Maguire led to a fundamental but undeclared conflict of interest at the top of the government, with Gladys Berejiklian controlling the funding of the very body which revealed Maguire’s corruption.
That conflict has been made more pressing over the past 18 months, as the Independent Commission Against Corruption (ICAC) has pleaded with the premier’s office for extra funding for its survival.
ICAC made its case in increasingly desperate terms in late 2019 as the government’s funding cutbacks over successive years hit hard. It warned that without a funding boost it would be forced to make 31 full-time employees redundant from its 120-strong workforce with an “immediate and devastating” impact on its ability to fight corruption.
As ICAC made its case to Berejiklian, no one was aware that she was in a close personal relationship with Maguire who had already been the subject of an ICAC investigation and public hearings in 2018. (Maguire admitted trying to earn payments by setting property developers up with investors, particularly large Chinese firms.)
In May this year, with Berejiklian still secretly seeing Maguire, ICAC released a report from leading NSW SC Bret Walker which said the government’s funding arrangements exposed it to the risk of undue influence, given the central role of the premier’s office in deciding funding.
It said the Department of Premier and Cabinet had “reluctantly” agreed to provide an extra $2.5 million in 2019 so its work could continue.
ICAC’s relationship with the NSW government took a sharp turn for the worse in 2015-16 when the government slashed its funding by more than 25% — from $27.5 to $20m. It has still not recovered.
Berejiklian was then treasurer and deputy leader of the NSW Liberal Party. The cuts came at a time when the budget was more than $5 billion in surplus and were widely seen as payback for a series of high-profile investigations which had exposed staggering levels of corruption in the Liberal government.
Between 2011 and 2015, ICAC investigations forced the resignation of more than a dozen Liberal MPs, including two ministers. Most were revealed to have accepted or arranged secret donations from property developers in the 2011 election which brought the Coalition to power.
The most senior ICAC casualty was then premier Barry O’Farrell who resigned after admitting he had received a $3000 bottle of vintage Grange as a gift from Australian Water Holdings, which he had initially failed to declare.
The same inquiry implicated senior NSW Liberal Party identity and then federal senator Arthur Sinodinos.
O’Farrell’s resignation in April 2014 was a cataclysmic event for the Liberal government.
Yet the ICAC’s high-impact investigations appear not to have alerted Berejiklian to the risks of corruption.
The evidence shows that in February 2014 Berejklian was told by Maguire that he had received a $5000 commission from his role with a business partner in selling a motel. She greeted the news with a “woo hoo” and lots of exclamation marks. And then kept her relationship with Maguire a secret for the next five years as he continued to tell her news she apparently didn’t want to know.
That decision is proving fateful and it raises serious questions about the public’s right to know.
Here are some:
- The ICAC first conducted hearings into Maguire in July 2018, revealing a level of corruption which shocked the premier. Eight months later, in March 2019, there was a state election. Why didn’t Berejiklian declare the relationship prior to the election? Was it to avoid potentially fatal publicity?
- Did the ICAC have surveillance material on Berejiklian before the election? And if so, why didn’t it hold hearings back then? (The ICAC told us it didn’t comment on investigative matters.)
- When it came to pleas for increased funding, did Berejiklian excuse herself from discussions given she was determined to keep the relationship to herself?
We have approached the premier for answers.
Will this be the end of the Berejiklian government? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication in Crikey’s Your Say section
There is a wonderful sense of karma to this story.
If ICAC brings down yet another LNP premier, that will be a very just reward for their determined efforts to nobble the anti-corruption body.
Thanks David, great report,.
Independent Commissions of Corruption should be incorporated into all the constitutions of Australia, state and federal.
To prevent corrupt politicians from constraining such commissions by impoverishing them, there should also be a provision that such commissions would be guaranteed a proportion of the cost of running the legislative organs of government. This would include all costs including parliamentary services.
The bigger and more complex the government the larger the funds for an ICAC or equivalent.
These costs for the NSW government are at least $115 million per annum. A proportion of 25% of the cost of parliament in NSW case would appear to be appropriate.
The federal government costs us in excess of $400 million per annum. In this case a 10% figure would seem about right.
Until there are these sorts of protections, enforceable by the High Court Of Australia, I won’t feel safe.
Only protections provided in the constitution are a guarantee of protection from corrupt politicians, anything else is putting the fox in charge of the hen-house.
I’m unsure as to that recommendation being the panacea, Robert, but it is the case that standards are barely in existence nowadays (the lying of Cash – a serving Minister of the Crown – to identify one example.
Nowadays, there is (I suggest) an even-money chance that Bond would have received a suspended term. As for Connell, Dowding returned to NSW to (ironically?) practice law; the Rothwell saga notwithstanding.
Excellent suggestions, Robert.
Thank you for this article, David. Crikey is knocking them out of the park today.
I am not a Liberal voter, and aspects of Gladys premiership I have disliked. However it is her loneliness, and her naivety, that puts her in this position, unlike the greed and criminality of so many other ICAC witnesses such as say the Obeids etc.
As a premier I am sure she has given everything she could and is an honest if naive person.
However as citizens of NSW we need to be sure that we are protected from corruption occurring, by any means.
Corporate Board members can’t expect to get away with “I didn’t know it was happening on my watch”
How much we need an invigorated ICAC pales into insignificance for the absolute desperate need we have for a well fanged Federal equivalent.
Yeah but – she claims to be 110% dedicated to stopping corruption, but has turned a blind eye to a lot here, and quietly assisted elsewhere.
Bradley has her nailed, and there is an innate cunning to her performance in the last few days.
Honourable pollies have resigned for a lot less.
Threatening to restack an entire ministry with Libs only in regard to the koala bear issue is an initiative of an accomplished street fighter. Then there is the effect of the action with her knowing that the deputy is more interested in his salary than in kolas (or mates come to that).
O’Farrell’s fate should have set a precedent. It seems less problematic failing to declare a one-off bottle of Grange than offering private plaudits to a rorter boasting of his lucrative ongoing spoils. For five years.