A doctored cabinet minute, a political smear campaign and millions of dollars milked from a public utility: the corruption inquiry into the company linked to crooked former Labor kingpin Eddie Obeid punched above its weight in delivering shock claims.
Operation Credo, the Independent Commission Against Corruption inquiry into Australian Water Holdings and its links to the Obeid family, always posed the threat of claiming scalps from both sides of politics thanks to glittering Liberal Party identities such as Arthur Sinodinos on its board.
But nobody could have predicted that after 23 days and 56 witnesses, a Liberal premier would become collateral damage in the final day of the public hearings – not over corruption, but a $3000 bottle of wine.
Senator Sinodinos, the former chairman of Australian Water Holdings who stood aside as assistant federal treasurer pending the inquiry, had appeared the early favourite to walk the plank among Liberals, again owing to reputational damage rather than corruption.
He testified that he did nothing to investigate why AWH was billing huge expenses to the state-owned Sydney Water when its work delivering water and sewerage infrastructure to new housing estates in the north-west was winding down.
The inquiry has heard Sydney Water was unwittingly footing the bill for millions of dollars in dubious costs including limousines, luxury accommodation and donations to the NSW Liberal Party.
In a torrid day in the witness box, Senator Sinodinos claimed he was unaware the party of which he was then honorary treasurer was receiving donations from the company that was paying him $200,000 a year plus bonuses for less than 50 hours’ work a year as a director.
He could not recall the then head of Sydney Water, Kerry Schott, warning him in 2009 to be careful of the company he was keeping at AWH ”because they may be dishonest”.
But his evidence was almost a sideshow. At the centre of ICAC’s investigation were allegations the Obeid family were ”secret stakeholders” in AWH and stood to make up to $60 million from a proposed public-private partnership with the state government. There is evidence both the former Keneally Labor and the O’Farrell Coalition governments were lobbied to support the proposal, but neither did support it.
In a plotline seemingly ripped from a political pot-boiler, Mr Obeid’s political allies, former ministers Joe Tripodi and Tony Kelly, allegedly doctored a cabinet minute in 2010 to advance the PPP project.
Mr Obeid snr was accused of being involved in an attempt to smear Dr Schott, who was standing in the way of the proposal, with a false corruption complaint. He allegedly told Phil Costa, the water minister in the Keneally government, to ”sack that bitch” – but Mr Obeid claimed he did not use those words and said Mr Costa wouldn’t have ”the guts to sack a tea lady”.
The former chief executive of AWH, Liberal fundraiser and Obeid associate Nick Di Girolamo, was the source of the pricey bottle of 1959 Penfolds Grange Hermitage that brought former Premier Barry O’Farrell undone.
His testimony, backed with phone and courier records and a thank-you note, contradicted Mr O’Farrell’s uncategorical denials on Tuesday that he had received the gift after his March 2011 election victory, and ultimately triggered the resignation of Mr O’Farrell the following day for unwittingly misleading ICAC.
Mr Di Girolamo faces a rocky road ahead. Counsel assisting the commission, Geoffrey Watson SC, dropped ”the F-word: fraud” over claims AWH billed Sydney Water for expenses unrelated to its work in north-west Sydney. He has accused Mr Di Girolamo of being an ”old-fashioned shyster fraudster” who milked Sydney Water after he joined the AWH board full-time in 2007.
The commission will release its findings later this year.KEY POINTS
ICAC is investigating claims the Obeid family are ‘‘secret stakeholders’’ in infrastructure company Australian Water Holdings.
Arthur Sinodinos joined the AWH board in October 2008 and resigned in 2011 to take up a Senate position. He claims he was unaware the company was improperly billing Sydney Water for limos and political donations.
Eddie Obeid’s allies Joe Tripodi and Tony Kelly allegedly doctored a cabinet minute in 2010 to support an AWH proposal.
After the March 2011 election, AWH lobbied the O’Farrell government over the proposal.
The company’s former chief executive, Liberal fund-raiser Nick Di Girolamo, sent a $3000 bottle of wine to Barry O’Farrell. Mr O’Farrell did not declare it on the pecuniary interests register. He has resigned.