The NSW Liberal Party’s ex-chief fundraiser says he tried to ensure funds from banned donors did not end up in state campaign coffers, the ICAC has heard.
The NSW Liberal Party’s one-time top fundraiser has told the corruption watchdog he now realises his efforts to comply with donation laws were wanting.
Paul Nicolaou said he tried to ensure funds from banned donors did not end up in state campaign coffers but his efforts only went as far as reading the names on cheques to decide if they sounded like property developers.
“In hindsight I should have done more but there were no procedures in place,” he told the Independent Commission Against Corruption (ICAC) on Friday.
Counsel assisting, Geoffrey Watson SC, told the ICAC the former Millennium Forum chairman appeared to have missed some howlers.
“What did you think Big Country Developments did?” he asked, before adding that “blind Freddy” would have guessed a company with a name like Elmslea Land Developments might be involved in property development.
The ICAC is investigating allegations a front organisation, the Free Enterprise Foundation (FEF), was used to funnel banned donations to NSW Liberal fighting funds ahead of the 2011 state election.
It’s alleged that donors who wanted to contribute to the NSW party – but were prevented under 2009 laws that prohibited property developers – would give to the FEF instead.
The ICAC has heard the trust would then pass the money back to NSW, thus obscuring its true source.
The NSW Liberal Party’s finance director Simon McInnes told the ICAC that about $180,000 in cheques – some as small as $500 – were channelled in this way after being “collected or solicited” by ex-minister Chris Hartcher’s office.
“I couldn’t understand why, why would you go to this trouble? And I was also concerned that there may be donations that could have come from prohibited donors, who would have been prohibited from directly donating to the party,” Mr McInnes said.
He said that when he raised concerns with Mr Nicolaou, he was told: “What Hartcher wants, Hartcher gets.”
Mr Nicolaou has denied ever saying this or hearing any other NSW Liberal figure say it.
He told the inquiry that Mr McInnes’s predecessor had told him of the existence of the FEF and that it was sometimes used to discreetly accept money from donors who wanted to stay anonymous.
When the NSW political donation restrictions were ushered in he put forward the idea that the FEF could play a role and he assumed legal advice would be sought, he said.
But although he initially said sidelined federal minister Arthur Sinodinos – then the NSW Liberal Party’s treasurer – was present when he made the suggestion, he later agreed that the proposal he raised when Senator Sinodinos was present did not involve re-routing funds to NSW.
Mr Sinodinos’ barrister Robert Newlinds SC challenged Mr Nicolaou: “There was a meeting of the finance committee where the possibility of developer donations being made to the federal secretariat via the FEF was discussed … it was about money going to the federal secretariat,”
“That’s correct,” Mr Nicolaou said.
“It was never about money going to the state division for use in the state campaign,” Mr Newlinds continued.
“But some of the money did come into the state campaign,” Mr Nicolaou replied.