It’s Only a Rort if You’re Not in on it…..

The oldest profession in history is a topic that stimulates a lot of debate. Many have long held the view that the title goes to prostitution. An argument that seems logical, given the service provided is one that has been in hot demand since the beginning of time, has no competition worth considering and will probably never go obsolete. Quite the opposite in fact! Personally, I dispute this claim based on the fact that if these services were being paid for via currency, the client would have needed to acquire these funds through another method. Presumably gainful employment of some kind. But that’s a discussion for another time.

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Whatever the world’s oldest profession truly is, there is one thing that has existed equally as long and possibly even pre-dates the concept of employment itself. That is of course, the human desire to provide for themselves by any means possible. The human concept that wherever there is something to be gained, there is a desire to gain more than one’s fair share. Even if that means taking advantage of one’s fellow man. I’m referring of course, to scams, rorts, swindles, hustles, fraud and fleecing. Or to use the modern umbrella term for all such dastardly deeds, corruption.

Corruption is rife in modern society all around the world. Whether it be judges being paid off by crime bosses, police in dodgy holiday spots ripping off tourists, businessmen buying favour or sporting teams trying to break the rules; where there is a buck to be made there will always be someone willing to bend the rules to do so. Many of these cases we will never fully know about, but for every one that we do their downfall is usually due to a whistle blower who after knowing about wrongdoings for so long has decided enough is enough and goes to the authorities. These people obviously weren’t in on it.

icac pick

The Independent Commission Against Corruption has been in the headlines a lot over the last couple of years for a number of reasons. At this time, their very future is at stake as Commissioner Megan Latham’s investigation into Deputy Senior Crown Prosecutor Margaret Cunneen continues.  Ms Cunneen is one of the Crown’s top silks and is responsible for prosecuting Bilal Skaf, Paul “Collar Bomb” Peters, the Khan brothers and Robert “Dolly” Dunn amongst many others. The investigation suggests Ms Cunneen attempted to pervert the course of justice regarding a traffic matter involving her son and his girlfriend. ICAC is already facing accusations of being a Kangaroo Court and will surely suffer a huge blow to their credibility if their investigation proves fruitless. If it goes the other way, who knows what the ramifications could be. In most cases ICAC investigations stem from anonymous tips.

tip

The ICAC also has two ongoing investigations that are of great interest involving NSW public officials and members of parliament. Allegations concerning corrupt conduct involving Australian Water Holdings Pty Ltd (Operation Credo) and allegations concerning soliciting, receiving and concealing payments (Operation Spicer). In January, ICAC curiously dropped major allegations against Arthur Sinodinos and Nick Di Girolamo related to their involvement with Australian Water Holdings, a company accused of being involved in dodgy donations to the Liberal Party while defrauding Sydney Water. Nick Di Girolamo in particular has been mentioned a lot, but is perhaps best remembered by his gift to former NSW Premier Barry O’Farrell. I’m of course referring to that infamous bottle of 1959 Grange that was the catalyst for the state leader resigning in disgrace.

baz resign

 

Barry O’Farrell seems to be a forgotten man in NSW politics at the moment, with Premier Mike Baird currently under fire for the actions of his predecessor. Baird has been under siege ever since his social media brain explosion and subsequent response. It seems about as much thought was put into that Facebook post as there was into the legislation it was attempting to justify. Regardless of how poorly this was handled last week, many seem to forget that O’Farrell was in fact the one who implemented these laws not long after mocking the very idea of lock outs. Two months later he would step down in shame and Baird would be in the hot seat. More on that topic later on.

ICAC AUSTRALIAN WATER HOLDINGS
Former CEO of Australian Water Holdings Nick Di Girolamo arrives at the Independent Commission Against Corruption (ICAC) hearing into Australian Water Holdings in Sydney, Friday, April 11, 2014. (AAP Image/Daniel Munoz) NO ARCHIVING

The story of Australian Water Holdings and the alleged key players is a fascinating one that I have spent a lot of time looking reading about over the past couple of years. There is so much to this particular story it would be worthy of a lengthy book. I’ll keep it fairly succinct for the purposes of this publication, but if there happen to be any publishers reading, I’m most certainly open to offers!

AWH was initially a not for profit firm tasked with managing infrastructure in Sydney’s north-west. Due to its status it could obviously not earn a profit, instead it just claimed expenses from Sydney Water related to water and sewerage facilities. In the 90s AWH was so insignificant, the NSW Government handed over the company to two long term employees for a token amount of $20. It was not thought to be viable in any sense and that was supposed to be the end of it.

Through a twist of fate one of those now owners, John Rippon, happened to have an interest in thoroughbreds and purchased a horse with a partner at law firm Colin, Biggers & Paisley – Nick Di Girolamo. This would lead to Di Girolamo coming on board with AWH as a director and set off the chain of events that would eventually draw the attention of ICAC and bring down a premier. The name of the horse for those who were wondering, was Partner in Crime.

horse

According to what counsel assisting the ICAC, Geoffrey Watson SC alleged, Di Girolamo quickly realised the potential this little company from the north-west offered and set about making himself the CEO with a salary well in excess of $1 million per year. He rewarded the two long term employers, Rippon and William MacGregor Fraser increased salaries of around $750k each. MacGregor Fraser would later go on to say this made him feel slightly uncomfortable, but it seems that wasn’t the case at the time. Cash was splurged on $50k junkets to Queensland, corporate boxes, chauffeurs and all sorts of entertainment. After all, these were just reasonable business expenses Sydney Water would be footing the bill for. Never mind AWH had around 10 employees and one single, solitary contract.

geoffrey watson

Given their legal relationship with Sydney Water, Di Girolamo allegedly set about utilising this facade of credibility to aggressively expand the company, shedding the NFP status in the process. According to ICAC documents, funding was initially obtained using convertible notes, a type of investment where financiers loan an amount to a business and are then entitled to have the debt repaid via share capital in the company.

By this stage Di Girolamo owned 60% of the company shares but this would soon be reduced to 30%. According to ICAC transcripts, Di Girolamo was the recipient of a $3 million loan from none other than family friends, the Obeids. The Obeids and Di Girolamo deny this loan was anything to do with AWH and claimed this was a personal matter, despite standing to earn a $100 million pay day. Rather than summarise myself, here are Watson’s remarks –

ICAC AWH Obied

Watson questioned the documents at the inquiry, with following exchange taking place –

Mr Di Girolamo – a former managing partner at law firm Colin Biggers & Paisley – appeared to contradict himself over details of a controversial deal with members of the Obeid family.

The Obeids have insisted they were lending Mr Di Girolamo $3 million despite the heading “Sale of Shares” in a November 2010 contract and the listing of Mr Di Girolamo as the “vendor”.

“You’re saying that you think it could be a loan despite the fact that there was no reference to a borrower, no reference to a lender, no reference to a principal, no reference to a repayment date, no reference to a debt and not even a reference to a loan?” Mr Watson asked incredulously.

“You’re telling us that as an experienced lawyer you still signed the document believing that to be the fact, are you?”

“Yes,” came the reply.

Source 

sinodinos

Arthur Sinodinos was involved with AWH as Chairman from 2008-2010, a role that raised several eyebrows given his glowing reputation with prominent individuals in state and federal politics. He had served as the Chief of Staff for none other than John Winston Howard himself as his chief of staff and was liked and respected amongst all this colleagues and associates.

However, this company was a mess before, during and after Sinodinos tenure. Former state treasurer Michael Costa somehow got himself involved as the next Chairman and said in trying to overhaul the company’s finances he felt like Winston Wolfe, the cleaner who disposes of dead bodies in the Quentin Tarantino cult favourite, Pulp Fiction. He said the company had massive tax debts and that executives on salaries exceeding $1 million were back paying themselves.

winston wolfe

According to the ICAC hearing, Sinodinos was paid $200k for his role as Chairman. Counsel calculated that based on work required, his annual salary was based on 25-45 hours of actual work per annum. This humorous exchange was taken from a story in Good Weekend

For chairing AWH, a company with just 10 employees and one contract, Sinodinos was paid $200,000 a year. At ICAC’s April hearing, counsel assisting the commission, Geoffrey Watson, said he had calculated that, for this fee, Sinodinos was required to put in between 25 and 45 hours’ work per annum. Sinodinos responded with a question for Watson: did that include the time he spent travelling from central Sydney to board meetings at the company’s offices at Bella Vista, in the city’s north-west? And what about the time he spent boosting the company in conversations at social functions?

Watson seemed slightly taken aback. “What, should we add on 90 seconds over a gin-and-tonic to the other 45 hours a year?” he asked.

It was alleged Sinodinos was involved to leverage his vast connections and assist with obtaining a key contract with Sydney water worth an estimated amount of $1 billion. For his role, it was alleged he would pocked upwards of $20 million.

sinodinos memory.jpg

The following observations extracts also taken from Good Weekend –

Memory is a funny thing. Listening to Sinodinos reminisce about his time in Howard’s office, I am struck by his detailed recollection of events long past. Talking about Andrew Peacock’s successful 1989 challenge to Howard’s leadership, he says, “It would have been May 9, I think. It was either a Monday or a Tuesday.”

Yet at ICAC hearings, he struggled to recall key incidents and conversations from his time as chairman of AWH and treasurer of the NSW Liberal Party. In five hours in the witness box in April, he said “I don’t remember” or “I don’t recollect” more than 60 times. “It’s a real issue, I agree,” he tells me.

Sinodinos himself seems to subscribe to the theory that he swam with sharks and is suffering the consequences. “What would you call that?” he asks. “A certain naivety? A certain wish to believe the best of others?”

sinodinos JWH

John Howard says, “I’m certain that Arthur has not done anything dishonest or corrupt.” Still, his old boss doesn’t see Sinodinos as a patsy: “He’s not in any way duplicitous himself, but that’s not to suggest that he is naive.” Howard laughs. “He’s awake to spivs.”

Whilst chairman of AWH, Sinodinos was also serving as honorary treasurer of the NSW Liberals and during this time there was a $74k donation from AWH to the party. Naturally, Sinodinos did not recall this unusual transaction between both organisations he was representing. Sinodinos has recently been cleared of corruption allegations and is believed to be resuming parliamentary duties soon. Di Girolamo has been also been cleared of one of his allegations, but others are still pending. What we do know is they never got their billion dollar bonus. But there was  The investigations are still in process, so who knows what else will come to light or what else will be proven. No doubt chapter two will be just as enthralling.

baz digo

One of the stranger aspects of this story is the relationship between O’Farrell and Di Girolamo. At some point in 2008 or 2009 during Nathan Rees brief tenure as premier, Rees was approached by former power broker, Eddie Obied in relation to setting up a meeting with Di Girolamo. The meeting was in regards to Australian Water Holdings, where Eddie Jr was an employee at the time. Nothing came of this and soon after Rees was succeeded by Kristina Keneally. According to testimony at the ICAC inquiry, Keneally was also lobbied by Obied in relation to this company. She too rejected this advance. Which begs the question, given the obvious concerns regarding this company and all who were involved or allegedly involved with it, what the hell was Barry O’Farrell doing maintaining a close relationship with one of the key players, Nick Di Girolamo some years later? Without suggesting anything untoward, one would think that after finally seizing power from a NSW Labor regime that had stunk up Macquarie Street for years, distancing oneself from anyone and everyone who could possibly shift that taint to the new government would be right at the top of the “to-do” list.

grange grange

 

When O’Farrell’s gift was first brought up in corruption investigations, he denied ever receiving it in no uncertain terms. He also denied making a phone call to express his gratitude.

“The ICAC has heard the 1959 vintage bottle – aged since the year of Mr O’Farrell’s birth – was delivered to his home in Roseville, on Sydney’s north shore, on or around April 20, 2011.”

“It’s the Don Bradman of wine. Unforgettable,” Mr Watson said. “Yes. If it had been received, I don’t believe I would have forgotten it,” Mr O’Farrell replied.”

“But Mr Di Girolamo has told the inquiry he received a thank you call from the premier after sending the wine – and on Tuesday afternoon, Mr O’Farrell was shown a record of a 28-second telephone call from his mobile number to Mr Di Girolamo’s, made about 9.30pm on April 20, 2011.

“I’ve no knowledge – I don’t know about this phone call,” Mr O’Farrell said.

“What I do know is if I had received a bottle of 1959 Penfolds Grange I would have known about it and I did not receive a bottle of Penfolds Grange.”

Never mind it was sent to his home address, obtained quite easily by Di Girolamo –

“He said he found the Premier’s private address by ringing his office. Challenged about why the premier’s office would hand out his home address, he said it was not surprising, given his relationship with the Premier.”

thank you

 

This did not add up, and sure enough a hand written note was soon found with O’Farrell graciously thanking Di Girolamo and his wife for the gift, on behalf of himself and his wife. It even made explicit reference to the wine in question. What is also noteworthy is the inclusion of the respective wives on this note. Based on this, it would have appeared they were all quite familiar, good friends even.  This is supported by one of Di Girolamo’s previous positions as a board member for O’Farrell’s beloved Wests Tigers. It’s unconfirmed if this is how they know each other, but what is known is that the Wests Tigers are a bastion of repute and certainly don’t have any questionable associates or property developments that have been newsworthy over the past few years!

Faced with this evidence, O’Farrell took the “honourable path”, claimed he must have had a “memory fail” and forgotten about wine and ultimately fell on his sword. The question that was never asked though, was even if he had indeed suffered a “memory fail” when asked about the gift why, after acknowledging its existence, had he not said anything at the time of receiving it? The NSW parliament’s pecuniary interest register requires all gifts over $500 to be declared, other than political donations and gifts from relatives. This bottle was worth almost $3000.

Before this confusing situation went down, O’Farrell had been setting his legacy up quite nicely. Not only had he cracked down on crime but he had also been responsible for green lighting one of the most ambitious developments in Australian history. James Packers vision for Barangaroo. Crown Sydney, a 6 star VIP casino would surely becoming his ahem, crowning achievement. Given these achievements, it seemed is bit strange he would be resigning over something seemingly so trivial.

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O’Farrell was a massive fan of the Packer casino from the get go. He said the government was excited about the economic prospects for NSW as well as the jobs it would create. Packer was excited to get another foot in to a very lucrative market. There were a few stumbling blocks though, or there should have been.

packer

When The Star first got wind of a then rival sniffing around they immediately sprung in to action, seeking an extension of their exclusivity agreement which dictated they would have the sole rights to casino operation in Sydney. This request was declined, in the interest of competition. From November 2019 Sydney would be open for business for a second casino. All that was needed now was for the NSW Government to begin accepting tenders for Barangaroo and with a bit of luck Packer and Crown would have a superior submission to the other interest parties and the ball would officially be rolling. Well, actually, that wasn’t the case either.

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January 2012 the NSW Government had released a new guide regarding Unsolicited Proposals published alongside the NSW Public Private Partnerships Guidelines. As you can see from the link and the image above, unsolicited tenders would be considered depending on a number of strict guidelines. With a number of global hospitality and gaming companies capable of creating an amazing hotel & casino in existence, this would surely be no fait accompli for Crown. Just look at the Marina Bay Sands hotel and casino in Singapore, or any number of facilities in Macau, Dubai and so on and you will see a number of modern marvels in architecture. What would Crown be able to offer that these other companies could not?

marina bay sands.jpg

 

Something, as it turned out. Packer and O’Farrell met to discuss potential plans for the casino in August 2012 and a week later the legislation had been changed. Unfortunately as you can see from the image above it’s tricky finding the old framework so I’m personally not sure what was changed exactly. But looking at the various contracts for Barangaroo it seems noteworthy that special mention of a ski resort in Perisher and a retreat in Ellerslie was made. It would appear that these two spaces, to be used as retreats for overseas VIPs would be the unique offering that allowed an unsolicited proposal to be considered. A weak reason, in my opinion. But it’s the closest thing I can find. In August 2015 part of the Packer estate at Ellerslie was sold to Crown for $60 million.

packer timeline

Fast forward to November 2013 and the legislation giving the casino the green light was good to go, and was finally available for public scrutiny (not that it mattered by this stage). However it was quickly noticed that large portions of the contract and the terms had been suppressed or redacted. Independent Legal Arbiter, the Honourable Keith Mason AC QC , a retired Supreme Court Judge was called in by the Privileges Committee to make sure everything was above board. These were some of his findings and recommendations

Crown privilige

Mr Mason found that there was no good reason for suppression and stated it would be poor government to continue denying full access. The Privileges Committee mainly rejected this and you can see the results for yourself here

Some uncensored documents have since come to light, including clauses specifically banning certain undesirable interests from having any direct involvement in the casino due to their links to organised crime. If that is such an issue more than half a decade before opening that it has to be written in to the agreement, I can only imagine what kind of interest the casino will attract when it actually opens.

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With that, the CASINO CONTROL AMENDMENT (BARANGAROO RESTRICTED GAMING FACILITY) BILL 2013 was passed with the full support of the opposition and Barry O’Farrell had secured a win for all.

The final say was had on November 12th 2013, and as per usual Alex Greenwich summed it up best so he can have the last word on Barangaroo…

Alex Greenwich Casino

You can read his full remarks here.

Full support of the Opposition indeed! Michael Pascoe from the Sydney Morning Herald said it best –

There should be little surprise about that. When the nominal Opposition Leader has no regrets about not reporting an alleged $3 million bribery attempt, he’s unlikely to be concerned about Packer’s exploitation of the “unsolicited proposal” mechanism to avoid an open tender for Sydney’s second casino.

It should have been a gift issue for the opposition – “the Premier in Packer’s pocket” – but hiring the right machine men meant Labor was already in there to welcome him.

It appears the forgotten forgetful man of NSW politics will indeed leave quite a legacy. Two pieces of extremely controversial legislation (one that he didn’t even agree with) will have a lasting impact on the City of Sydney and the entire landscape, both culturally and physically will never be the same again. So why on Earth did he resign over a seemingly innocuous bottle of wine?

barry

This article does not suggest any wrongdoing from Mr O’Farrell. It’s not like we have another Robert Askin on our hands. I’m sure you will agree after reading this that quite the opposite is the case and without his personal involvement things would be a lot different in Sydney 2016! Mike Baird (or Mike Faird as he became known in some circles due to his penchant for fair calls) has admittedly made some mistakes with handling of certain issues but when it comes to these two achievements, Barry O’Farrell deserves all the credit.

 

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17 thoughts on “It’s Only a Rort if You’re Not in on it…..

  1. Great read! I would how ever like to argue that in you’re introduction you state that you would need employment in order to pay for the service of a prositute. I would think trade of food or other important items for sex would have been the earliest for of paying for sex. I no way am I trying to detract from your artical, I would even think the idea of corruption would have had its place pre currency or employment in the form of trade.

    Like

    1. Nikfayard, you’re 100% right! A couple have echoed your thoughts to me so on this occasion I am happy to stand corrected (a rare occasion, even rarer that I’m doing so on record haha)

      Indeed, corruption would have been a scourge on the barter system as well. That’s of course if you weren’t in on it!

      Like

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