Murky machinations of the political-business nexus JANET ALBRECHTSEN THE AUSTRALIAN MARCH 26, 2014 12:00AM IT is true that Arthur Sinodinos is not the subject of investigation by the NSW Independent Commission Against Corruption as it investigates the sticky web of corruption involving former Labor minister Eddie Obeid. It’s true no allegation of corruption has been made against Sinodinos. He denies any wrongdoing and he has been summonsed only as a witness to ICAC. It’s also true Sinodinos, the former chief of staff to John Howard and now NSW senator, attracts high praise across business and politics as a man of integrity, sharp intellect and enormous ability. It’s true too that Sinodinos did the right thing, finally, by standing aside as assistant treasurer on Wednesday. It’s also true that voters hate this stuff. The “stuff” is what emerged last week during ICAC hearings: the easy money that Sinodinos and others sought by joining Australian Water Holdings, a company trying to make a financial killing from a state government contract; the extravagant salaries and high living expenses; the murky intersection between politics and business that allegedly saw others such as Liberal Left faction leader Michael Photios being promised a $1 million success fee if a deal was done; the substantial and secretive political donations paid to garner influence from the government of the day. To make matters worse, punters learned they were the mugs funding this smelly wheeling and dealing. Sinodinos, the savvy political operator who advised Howard for nine years, is astute enough to know voters hate this stuff. Even if Sinodinos has done nothing legally wrong, as he claims, his problems lay in the political realm where voters are entitled to ask whether Sinodinos’s judgment let him down by joining AWH. They might well ask why Sinodinos ignored a warning from Kerry Schott, chief executive of Sydney Water at the time, who claims she told Sinodinos in late 2010 “he might be careful with the company he was keeping” at AWH. “We thought they might be dishonest,” Schott told ICAC hearings on Monday. No matter his legal innocence, once Sinodinos was caught in the Obeid web, there was a significant risk to his position as assistant treasurer in the lead-up to a critical budget. Not to mention the harm done to the government’s messages along the way. There’s nothing wrong with Sinodinos earning $200,000 when he became chairman of AWH in November 2010. But voters might raise their eyebrows when learning it was easy money for around 100 hours work a year to attend monthly board meetings and meet with the occasional politician as AWH sought to win a lucrative public-private partnership with the state government. And voters won’t like reports from ICAC hearings that Sinodinos, though not a lobbyist, was brought in as a political heavyweight with gold-class political connections to “open lines of communication with the Liberal Party”. And they will look askance when learning Sinodinos stood to pick up between $10m and $20m from a 5 per cent stake in AWH given to him — plus a 2.5 per cent bonus — if the company won the $1.2 billion public-private partnership. The problem with easy money offerings at the meeting point between politics and business is there are sometimes nasty strings attached. In this case, the AWH string led directly back to the corrupt Obeid. It wouldn’t be unreasonable for voters to think if it sounds too good to be true, it probably is. For Sinodinos, the $20m payday was too good to be true. He relinquished his right to the shares in February last year when he says he learned Obeid had a 30 per cent stake in AWH. And that’s another thing that won’t impress voters. As chairman of AWH, a small company with 10 staff, is it too much to expect the chairman to know the identity of the company’s biggest shareholders? Sinodinos claims the deal to transfer a 30 per cent stake to Obeid the day before Sinodinos became chairman was done without his knowledge. But what, if any, questions did Sinodinos as chairman ask about the company’s shareholders? He knew Obeid’s son worked for AWH in Queensland on a plump $350,000 salary. And as claimed at ICAC hearings last week, a few months before becoming chairman, Sinodinos was told by Rod De Aboitiz, whose family invested in AWH, that the company’s costs were out of control and solvency was a real issue. The company had few assets, no free cash in the bank, and was bleeding money — allegedly through exorbitant salaries to its employees, ritzy lunches and hefty donations to the NSW Liberal Party. Let’s say it again: voters hate this stuff. Sinodinos says he knew nothing about a $75,000 donation to the Liberal Party by AWH when he was AWH director. Sinodinos was then also treasurer of the NSW Liberal Party. Should he, as a director, have asked questions about donations by AWH to his political party? Should he, and the other directors, have asked about all political donations by this company seeking a government contract that would make them all extremely wealthy? Voters will also hate reading that Sinodinos, who married late in life, had a new lifestyle to fund — a new young wife, children requiring private educations, $100,000-a-year in rent for a house with harbour views, leases on a Jaguar and a Mercedes. Sinodinos scored positions at Goldman Sachs JB Were and NAB and directorships that included AWH but the AWH shareholding promised the greatest riches. And here’s the other political crime confronting Sinodinos: he sits at the centre of a company that’s accused of billing the big salaries, the posh lunches, the limousines, the political donations as “administrative costs” to the state-owned Sydney Water — all paid for by NSW taxpayers. No wonder voters hate this stuff. On what we know so far from the ICAC hearings, had Sinodinos asked a few critical questions before he joined AWH or while he was director and chairman, he may have chosen a different path to avoid risking his good name and reputation. We will have to wait until Sinodinos gives his version of events to answer these questions fully, but you don’t need focus groups and online polls to tell you that voters are sick to death of these murky dealings at the intersection between politics and business where a nod and a wink can lead to big bucks that punters can only dream of. It is laudable that Tony Abbott has said he is standing by Sinodinos. But personal loyalty may need to give way to broader and deeper considerations about our body politic. The Prime Minister must know that it doesn’t stem the tide of voter cynicism about politics if a man otherwise known for his fine judgment and sharp intellect can make the mistake of being dragged into the Obeid sewer. Once judgment has been badly tarnished, it’s much harder to justify a front bench position.
Posted on: Wed, 26 Mar 2014 11:53:48 +0000
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