Council grant scandal increases pressure on Berejiklian

NSW Premier Gladys Berejeklian. Photo: Wikimedia Commons

After being grilled as a witness by the New South Wales Independent Commission Against Corruption (ICAC), questions are now being asked about Premier Gladys Berejiklian’s involvement in, or knowledge of, other shonky decisions, specifically a $250 million council grants fund.

ICAC is investigating the activities of disgraced former Liberal MP Daryl Maguire, including a “cash for visas” scandal and dodgy land deals at the planned Western Sydney airport at Badgerys Creek.

NSW is polarised over Berejikilan’s testimony — in which she does not seem to recall much — with conservatives (largely) arguing that the premier is being targeted for having an undeclared relationship.

The issue, of course, is whether she protected Macguire, or turned a blind eye, enabling him to pursue his questionable business dealings.

Did Berejiklian commit breaches of the Crimes Act and the Independent Commission Against Corruption Act, which impose a duty for witnesses to report any matter they suspect “on reasonable grounds” may corrupt conduct.

The pressure mounted when Leader of the Government in the Legislative Council Don Harwin was suspended on October 20 after failing to produce the paperwork for more than $250 million doled out in council grants, just before the 2019 election, and after many councils had been forcibly council amalgamated.

Greens MLC David Shoebridge said: “We began investigating these grants in budget estimates, because there was zero public information on how the scheme was administered.

A majority in the Legislative Council “forced the release of documents which exposed a grant scheme that was hopelessly politicised with the Premier and Deputy Premier directly involved in handing grants to Coalition seats”.

He said schemes like this “shovel out public money and are supposed to go where they can do most good”. They have instead been used “to buy votes to secure seats for Coalition candidates”.

Berejiklian herself approved more than $100 million of these grants from the Stronger Communities Fund. But the only records of the approvals are emails from policy advisers: there appears to be no signed approvals. 

The October 22 Sydney Morning Herald reported that the premier’s office had approved and was preparing to announce a raft of grants before new guidelines were announced changing how the money could be distributed.

Labor MLC John Graham said the grants, worth “two-and-a-half times the federal sports rorts” scandal, were given almost exclusively to councils in Coalition-held seats.

The government has since confirmed that for 249 grants, rubber-stamped between June 2018 and March 2019, no signed approvals exist.

Greens MLC David Shoebridge said the government had effectively used “public money to bankroll their election campaign”.

“Working with a majority in the Upper House we forced the release of documents which exposed a grant scheme that was hopelessly politicised, with the premier and deputy premier directly involved in handing grants to Coalition seats.

“Schemes like this shovel out public money, and are supposed to go where they can do most good, but they have been used to buy votes to secure seats for Coalition candidates.”

ICAC Chief Commissioner Peter Hall told the Legislative Council parliamentary inquiry, "Integrity, efficacy and value for money of NSW Government grant programs", that the administrative methods used by the government “raise very serious questions”. Responding to a question from Shoebridge about whether such behaviour raised integrity concerns, Hall said: “If there’s a lack of a required development of a set of guidelines [that] obviously leaves the door ajar for corruption. That is, it’s a corruption-risk scenario.”

Shoebridge has been successful in forcing Berejiklian and treasurer Dominic Perrottet to produce documents from their previously secret email accounts relating to the grants program, which was originally set up in 2016 ostensibly to assist amalgamated councils.

However, millions ended up with councils that avoided forced amalgamations, such as Hornsby Shire. Its mayor is Philip Ruddock, a former federal Liberal MP.

In August, Ruddock said the council had “no interest in joining the debate over whether the government followed all of the regulations in providing the money”, that Hornsby “needed and deserved” the $90 million and that he hoped “further compensation” would be forthcoming.

“You got to ask why they were so committed to not leaving a paper trail for this scheme beyond a few emails,” Shoebridge said on Twitter.

The inquiry also wants answers as to whether Berejiklian declared a conflict of interest when in 2018, as part of a committee, she signed off on $30 million for a Wagga Wagga music conservatorium after being lobbied by Maguire, who was once its MP.

The inquiry was told on October 16 that the Regional Cultural Fund awarded $10 million and $20 million to the Riverina Conservatorium of Music for the construction of a new recital hall in 2017 and 2018.

Meanwhile, NSW Auditor-General Margaret Crawford found on October 20 that the government’s funding arrangements for ICAC threatened its independence because the premier can “restrict access” to the funds.

Last year the government ordered a review into the “effectiveness of the financial arrangements” for ICAC, the NSW Electoral Commission, the Ombudsman and the Law Enforcement Conduct Commission.

Crawford’s report found that funding for these agencies was not “transparent” and that there are “no mechanisms for the agencies to question or challenge decisions made”. She said “This risk has the potential to limit the ability of the integrity agencies to fulfil their legislative mandate”.

State Opposition Leader Jodi McKay said there needs to be an independent body to oversee funding arrangements for ICAC.

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