“I think they are whale hunting. We just don’t know yet which whale they will hit,” one Liberal insider said after the end of the second week of hearings before the New South Wales Independent Commission against Corruption.
The corruption watchdog is inquiring into allegations a group of young Liberals, known as the Reformers, took illegal donations – including from Catholic Schools NSW, a hotelier, and a fugitive property developer, Jean Nassif – in order to fund branch stacking. The Reformers were intent on gaining control of the Liberal party and ultimately delivering more conservative policies on abortion, euthanasia, marriage equality and climate change.
Property developers and the hotel industry are banned donors in NSW. Donations are also capped and must be declared. All three donors would have breached these requirements – if the donations are found to be political donations.
Some senior Liberals, such as the federal party president, Tony Abbott, this week dismissed the Icac inquiry as an inappropriate probe into standard party shenanigans. But a number of senior figures in the NSW Liberal party are much more worried. Icac inquiries have an uncanny knack of sprawling in unexpected directions.
They fear Icac would not not have spent four years investigating branch stacking and illegal donations by a group of young men unless it was also able to show how the illegal donations infected political decision-making in NSW.
The “whales” of the party whose names have surfaced so far at Icac are the federal opposition leader, Angus Taylor; former premier Dominic Perrottet; former NSW finance minister and right power broker Damien Tudehope; and former planning minister Anthony Roberts.
Two other Liberals are also likely to be caught up: the moderate power broker Chris Rath and former fair trading minister Eleni Petinos.
To be clear: none of these people are named as persons of interest in the three published allegations involving breaches of the Electoral Funding Act, and none are under investigation by Icac.
Sometimes Icac doesn’t need to make a finding to demonstrate serious weaknesses in the democratic process. As one Liberal put it: “It’s the shame that is the punishment.”
A rugged two weeks
Before looking at the “whales” and how they surfaced, first, a recap.
In the first two weeks, Icac heard from the most junior of the Reformers. Dylan Whitelaw, now 25, was employed at Catholic Schools NSW in late 2019 after graduating high school that year. He later worked at Beckington, a public relations firm owned by another Reformer, Christian Ellis.
He gave evidence about donations from Catholic Schools and the sort of work he did recruiting young conservatives to the party. In the absence of Ellis, who is in the UK and has declined to return, Whitelaw gave the first insight into some of the money flows.
Icac also heard from another Catholic Schools employee, Rob Assaf, who was more central to the establishment of the Reformers. He gave evidence about the use of fake invoices to disguise payments to the Reformers.
On Wednesday and Thursday, Jean-Claude Perrottet, the 29-year-old brother of the former premier Dominic Perrottet, was in the witness box.
Text messages recovered by Icac indicate Jean-Claude’s role included seeking donations to fund Reformer work from the businessman Frits Maré (who declined) and the hotelier Michael O’Hara, and helping disguise payments through fake invoices. He also was quizzed on texts indicating his job was to work out which branches new members would be stacked into.
Jean-Claude’s evidence also revealed how government positions may have been used to fund the Reformers. At the time Jean-Claude and Ellis were working in Damien Tudehope’s ministerial office as policy advisers. He was grilled about reports they were mainly doing political work, a breach of the ministerial staff rules.
He was questioned about a document which appeared to be a far more extensive plan to place more young Reformer operatives in part-time roles in Liberal MPs’ offices as a way of paying them for branch stacking. The plan included a placement in the premier’s office.
Sign up for the Breaking News Australia emailBut the bombshell came right at the end of Thursday when Jean-Claude was played a phone intercept of him talking to the developer Nassif, while he was working at Medallion Financial and managing Nassif’s share investments.
Icac alleges Nassif paid three of the Reformers $2m, raising questions about what he wanted in return.
The tapped calls revealed Nassif boasting about getting “the boys” to abolish a Liberal party branch in the seat of the former NSW police minister David Elliott, whom he described as “the worst bulldog bully” and a “lying piece of shit”.
Nassif, whose buildings have been found to be riddled with serious defects, also said in one call: “Take a message to Charlie or to Dom – the building commissioner, we need to stop him. He’s a bully. He’s attacking me left, right and centre.
“I’ve been promised that commissioner will be fucking stopped or changed or fucking done something to him.”
Jean-Claude Perrottet described the call as “crazy talk” and “nonsensical”.
Now to the whales.
Tudehope and the leaked report
During Tudehope’s evidence, he admitted to having introduced O’Hara, a prohibited political donor, to the Reformers and to having some knowledge of their branch recruitment operations.
The biggest revelation came at the end of his evidence when he admitted that he had shared a draft 2023 parliamentary report into the branch stacking by the Reformers in the Hills with one of the men under investigation.
Leaking a draft parliamentary report is a serious breach of parliamentary rules. Tudehope was not on the committee, which raises the question: who gave him the report?
Tudehope has already stepped down from his frontbench position as shadow attorney general, but the leaking will likely spell the end of his political career.
To date, the NSW opposition leader, Kellie Sloane, has not called for his resignation from the Liberal party – and even indicated prior to his evidence that he could return to the frontbench in the future.
Dominic Perrottet and what he knew
The question that hovers over the inquiry is: what did the former premier Dominic Perrottet know of his siblings’ activity?
His much younger brother has been shown to be an active member of the Reformers. But Charles Perrottet, the brother one down from Dominic in the family of 12 children, is still to give evidence.
Charles has been named as a person of interest in the allegation relating to the $2m from Nassif.
Charles has been Dominic’s political wingman since their days at the University of Sydney, though there are also some who say they have fallen out badly in recent times.
“Joined at the hip,” was how one Liberal described them. “His political sounding board,” said another. “Dom was the singing, dancing frontman. Charles was a really talented political operative in the background.”
Some in the party are particularly concerned by the 2021 cabinet reshuffle that Dominic announced when he became premier. Another phone tap played to the inquiry suggested Nassif had advance warning of the reshuffle, seemingly aware that Petinos would replace the then fair trading minister, Kevin Anderson – and be responsible for the building commissioner.
“I’m gonna step on his neck and strip him from his job,” Nassif was heard saying of the commissioner, David Chandler. “Just give me two months because the consumer affairs minister, she’s gonna be my girl, and the fair trading minister, she’s gonna be one of my girls too, you know?”
After Petinos became fair trading minister, Chandler resigned. In a letter released publicly he cited a breakdown in relations with his minister and concerns about the influence of developers.
When Petinos resigned for unrelated reasons, Chandler was reinstated.
Also a casualty of the reshuffle was the planning minister, Rob Stokes. He was replaced by Anthony Roberts.
Whitelaw, who briefly worked in Roberts’ office while he was planning minister, said Roberts’ chief of staff, Chris Spence, had wanted Petinos to use a video Spence obtained to damage Chandler.
But there were also reasons why Nassif might have been delighted with a change of planning minister.
Before his removal, Stokes had been considering how much density would be permitted on a site near Cherrybrook station that was owned by the state government. Local Liberals said Nassif was not pleased that the site might provide competition to his own developments in the Hills district that were nearing completion.
Matt Kean was also mentioned in a tape as a moderate Nassif believed needed to be pulled into line. Kean had helped Perrottet become premier by delivering moderate numbers. But a reputed deal to make Kean deputy leader was nixed by the right.
Instead, Kean became treasurer and energy minister and the Reformers continued on their mission to take over the party from the moderates.
There have also been suggestions from Tudehope that the premier knew Jean-Claude had gone to Fiji to sit out the parliamentary inquiry into the Hills.
“I went because I was not in a good place and I didn’t want to partake in what I believed was a sham inquiry,” Jean-Claude explained on Thursday.
At the time, Dominic Perrottet indicated he did not know where his brothers were.
Taylor and questions over payments
The involvement – or not – of the federal opposition leader in the Reformers is likely to become clearer next week when the former CEO of Catholic Schools NSW Dallas McInerney gives evidence.
A longtime Liberal power broker, McInerney also was Taylor’s campaign manager in his seat of Hume.
The inquiry has been shown a message from Whitelaw to the Reformers saying: “Dallas has told me he got the commitment from Angus for the 15k injection plus a 3k monthly donation.”
Taylor said last week: “No payment was made.”
This careful form of words does not rule out the possibility that Taylor promised financial support for the Reformers, but withdrew it. There was a hint in Jean-Claude’s evidence that Taylor had a dislike for one of the Reformers, Assaf.
Branch stacking and the power of the right
As one senior Liberal said of the portrait of the right of the party that is emerging at Icac: “This is not John Howard’s right.”
By the end of the second week, we have learned how a very conservative sub-faction of the right worked to dominate the Liberal party in NSW.
A year ago the NSW Liberals installed Sloane as the new leader, in an effort to save as many seats as possible, as they battled the headwinds of a deeply dysfunctional federal Liberal party.
The thinking was Sloane was a better communicator than her predecessor, Mark Speakman, who would be able to differentiate the NSW Liberals from their federal colleagues.
Her job was to sell the message that, at state level, the Liberals were a modern party in touch with the broad community and its concerns about cost of living, that it was a party that believed in climate action, and that it was welcoming of minorities.
But the news that the right may now control branches through these stacking activities will undercut that message.
The South Australian and Western Australian Liberal parties have already seen takeovers by religiously aligned rightwing cooperatives. The result has been they have been reduced to a handful of seats in their state parliaments.
The NSW Liberals would be well advised to look at those examples and deal with the aftermath of the stacking as soon as possible.
