Liberal MPs quit over ICAC hearings

August 15, 2014
MPs Andrew Cornwell and Tim Owen resigned from the party after Premier Mike Baird asked them to “consider their position”.

Two ministers and five backbenchers have been suspended from the Liberal Party in NSW as a consequence of Independent Commission Against Corruption (ICAC) investigations over the past couple of months.

The latest ICAC hearings, which resumed on August 4, are centred on illegal donations from property developers in Newcastle and the Central Coast.

When Labor Premier Nathan Rees banned these donations in November 2009, it was not well received by significant groupings in the Liberal and Labor parties.

Less than 12 months later Rees was deposed as premier, thanks in large part to the organising capacity of Labor MPs Eddie Obeid and Joe Tripodi, both of whom later became well acquainted with ICAC.

When Liberal MP Andrew Cornwell admitted that he should never have accepted the envelope from a property developer that contained $10,000 in cash and was asked why he had not told the police, or just handed it back, he said: “It was just a huge mistake. I just froze.”

By the time he had given the money to his Liberal Party branch treasurer, who then donated it to the Liberal Party under the name of a family company, he had obviously thawed out.

On August 12, both Cornwell and fellow Newcastle Liberal MP Tim Owen resigned from the party after Premier Mike Baird asked them to “consider their position”. Owen had admitted to lying to ICAC by fabricating a story that he had returned a $10,000 cash donation from developer Jeff McCloy who also happens to be the Lord Mayor of Newcastle.

The ALP and the Liberal Party both want the electorate to believe that those of its members accused and found guilty of corrupt conduct are just a few “bad apples” in an otherwise uncontaminated barrel. But what ICAC has really exposed is the existence of what looks remarkably like a criminal milieu in NSW whose origins go back many decades.

Rees imposed the ban on property developers after an ICAC inquiry into Wollongong City Council in 2008, which found that local developers had received favourable treatment from elected Councillors and staff.

ICAC referred briefs of evidence to the Director of Public Prosecutions (DPP) in relation to 11 people found to have acted corruptly. Convictions were eventually recorded against three of them. The one person to receive a custodial sentence served four months in prison.

But corrupt conduct has no more been wiped out by the ICAC inquiry in Wollongong than the enactment of the NSW Crimes Act in 1900 has eliminated crime in NSW.

Nor is there any reason to suppose that corrupt conduct in NSW is limited to Wollongong and Newcastle.

Criminal milieus are interlocking, overlapping and cooperating groups of the criminally disposed. They self-organise horizontally as opposed to the vertical organisation of criminal groups like the Mafia.

Today’s illicit drug market owes its lineage to the emergence of a criminal milieu in Sydney in the 1950s. It was built on sly-grog shops, illegal bookmaking and casinos and the illicit abortion racket. State laws based on a moral code that was out of step with community views corrupted both legislators and law enforcers alike.

By the early 1970s, a criminal milieu had emerged in Sydney’s booming property market. When it was challenged by community and union resistance in Victoria Street, Kings Cross, it was met by bribery, intimidation and murder.

As property boom turned to bust in the late 1970s, capital moved into the resources sector and the cycle of corruption continued.

The most profitable opportunities for capital accumulation remain in the resources and property sectors of the NSW economy. It is no accident that ICAC inquiries over the past four years have been concentrated in these areas.

One simple remedy for curtailing the corruption of politicians is to introduce legislation providing for the total public funding of elections, a proposition that Rees put forward in 2009.

The ALP now supports this position, but Baird has shunted the matter off to an inquiry, which will not report until December. This means any recommendations that may be made about public funding could not be implemented before the March election.

A prohibition on all corporate donations should also be introduced. Until serious reforms like this are introduced, politicians promises of “cleaning up their act” will be treated by the voters of NSW with the utter contempt they deserve.

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