NSW: CORRUPT POLITICAL SYSTEM

Sydney Morning Herald 29 April 2014

Hundreds of thousands of dollars in illegal political donations were used to bankroll the Liberal Party's 2011 state election campaign after being funnelled through slush funds linked to former minister Chris Hartcher and fund-raiser Paul Nicolaou, a corruption inquiry has heard.

The Independent Commission Against Corruption inquiry into fund-raising and influence-peddling in the NSW Liberal Party, codenamed Operation Spicer, opened on Monday with explosive allegations that Mr Hartcher and fellow central coast Liberal MPs Chris Spence and Darren Webber corruptly solicited more than $400,000 in campaign donations in return for political favours. 

Among the donors were Nathan Tinkler's property development group Buildev, the Obeid-linked company Australian Water Holdings and Gazcorp, the developer behind the controversial Orange Grove shopping centre development in Liverpool. 

Mr Hartcher, who quit cabinet last year after the ICAC raided his central coast electorate office, allegedly laundered some of the cash through a Central Coast law firm, which was "dragged ... unwittingly into an illicit enterprise".

The payments were made to Eightbyfive, a "sham" company set up by Mr Hartcher's former adviser Tim Koelma to disguise the donations as payment for services by providing fake invoices. The bulk of the money came from property developers, who have been banned from donating to political parties in NSW since 2009.

Marie Ficarra, the former parliamentary secretary to Premier Mike Baird, stood aside on Monday and moved to the crossbenches after the inquiry heard allegations she directed prominent developer Tony Merhi to donate $5000 to Eightbyfive.

Her spokesman said she "denies the allegations completely" and would present evidence to show she was innocent and "acted in good faith at all times".

But counsel assisting the commission, Geoffrey Watson, SC, said that both Ms Ficarra and Mr Merhi "knew they were doing the wrong thing". 

Mr Watson suggested that as result of the payments, Mr Hartcher assisted the Gazals to get the Orange Grove shopping centre approved. Mr Roberts, who did not declare the trip on the pecuniary interests register, insisted it was a private trip and he paid his own airfares and costs.

The inquiry heard Mr Hartcher's office used the Liberal Party's chief fund-raising body, the Millennium Forum, and an organisation called the Free Enterprise Foundation to "re-channel" about $165,000 in donations from banned donors.

The foundation was allegedly used by members of the NSW Liberal Party to disguise illegal donations by "washing and re-channelling" payments, and it received $700,000 before the state election.

"Not all of that came from prohibited donors, but a substantial part of it did," Mr Watson said.

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