‘Source of truth’: The mystery of who drew up a $37m list of promises for every NSW electorate

In late March, one of Premier Chris Minns’ key confidants faced a barrage of questions from MPs in an upper house inquiry over a document which has come to be known as “the source of truth”.

The committee has been examining a controversial grants program devised by Labor in the lead-up to the 2023 state election that gave its candidates $400,000 to fund small-scale projects in all 93 electorates.

A Herald investigation has raised questions over grant funding directed to the seat of independent Sydney MP Alex Greenwich.Credit: SMH

The inquiry wanted to know where the “source of truth” document, known as the Local Small Commitments Allocation scheme, which listed the $37.2 million worth of commitments, had originated.

Despite being closely involved in managing the scheme after Labor came to government in 2023, Cherie Burton, Minns’ predecessor in the seat of Kogarah and now one of his senior advisors, couldn’t tell them. “Wherever it came from, it was given to me,” she said, noting the list had come to her in hard copy in about April 2023.

As the committee has found, the “source of truth” has mysterious origins, and details about where it came from and who was responsible for overseeing it have been strangely difficult to establish. Bob Nanva, the former NSW Labor secretary and now member of the NSW upper house, said he had never seen it.

“I assure you, I’m intrigued by the list,” he said. “I’ve never seen the list.”

Labor set up the LSCA in the context of a series of grants scandals under the former Coalition government. It was supposed to be an anti-pork-barrelling scheme, promising the same funding to every electorate regardless of whether Labor won the seat.

“The question literally was, ‘what would John Barilaro do, and can we please do the opposite?’, NSW Special Minister for State John Graham said, referring to the former Nationals leader and deputy premier John Barilaro, who became associated with pork-barrelling during his time in government.

But a string of revelations in this masthead – including accusations that grants were promised to groups in exchange for political support and Labor candidates who awarded money to organisations they had close ties to – have prompted serious criticism of the fund.

On Thursday, an auditor-general’s report into the scheme said “key steps” in administering the grants could not be scrutinised because they were carried out before Labor was in government, while also finding there was “insufficient evidence” that some allocations represented value for money.

Special Minister for State John Graham said the scheme was set up to be an anti-pork-barrelling program for every electorate. Credit: Dion Georgopoulos

Now, a Herald investigation has found evidence that some conflicts of interest were never investigated and that changes were made to the “source of truth” document after the election, which has prompted the opposition to demand Minns explain “whether he doled out taxpayer money for political favours”.

The Herald has also found dozens of cases in which grants were cancelled, in some cases because the organisation did not know it had been nominated. One $130,000 grant to a charity in the electorate of Charlestown, in the Hunter region, was cancelled after the organisation went into liquidation, forcing the government to line up as a creditor.

Among numerous examples of questionable grants is a $50,000 commitment made by Riverstone MP Warren Kirby to charity North West Community Services for a vehicle to conduct outreach services.

Kirby was vice president of the charity until late 2022, when he resigned to contest the marginal north-western Sydney seat. Kirby told the Herald he disclosed his former involvement in the charity. After he won the election, Kirby also hired one of the charity’s then-board members, Suzanne Lawrence, as a senior electorate officer.

In his inaugural speech to parliament, Kirby described Lawrence as a “dear friend” whose influence as an advocate for the Riverstone community “ultimately is what led me into politics”.

Besides their involvement in the community centre, Kirby also served as the vice president of the North West Business Chamber until 2022. Lawrence was its president at the same time.

The chamber and community centre have a close relationship. In a social media post spruiking the grant before the election, Kirby described the community centre’s purchase of a “resilience bus” as being “in collaboration with” the business chamber.

The chamber has been an active supporter of the Riverstone MP. In the lead-up to the 2023 election, he held a fundraiser attended by members of the chamber, and in June last year, it made a $1500 donation to Kirby via a “gala dinner” fundraiser headlined by Minns. The fundraiser was also advertised on the chamber’s website, in a post which described Kirby as a “long-time community advocate” and invited members to support him.

Kirby did not disclose his relationship with Lawrence, but his declaration of his involvement with the charity raises new questions about the LSCA scheme because Riverstone was not one of the electorates subjected to probity checks after the election.

“When we were first notified of this grant I mentioned it and said, you know, if this is perceived as a conflict of interest I won’t pursue it, but it’s something I know they’re keen on,” he said.

“I assume the people who sit in dark rooms spinning wheels or whatever they do assessed it and decided it was not significant.”

He did not disclose his close ties to Lawrence because he viewed his role as vice president of the community centre as “a more glaring conflict of interest” and because, he said, Lawrence did not know about the donation until a few days before the election, when she was photographed standing alongside him in the social media post announcing the grant.

“She was not part of the process at all,” he said. “And you have to remember she did not work for me then.”

Kirby is not alone in having a potential conflict. The Herald has previously revealed that dozens of grants made under the LSCA were flagged during a probity process instituted after the election. The now-MP for Camden, Sally Quinnell, donated $75,000 to the Camden Musical Society despite being a founding member of the group and a member of its committee until June 2022.

The government has defended that grant because Quinnell declared a conflict, and the donation was subject to an independent probity review. The auditor-general’s report found the checks on that donation and others were too focused on whether the candidate would obtain a monetary benefit.

In the case of Quinnell, it found the probity checks “did not adequately address perceived or potential conflicts of interest, which are important from a probity and public trust perspective”.

It also found that while the scheme had been “effectively administered” by the public service since it was handed responsibility for the program in July 2023, “key steps” in the guide governing grants could not be audited because they were carried out by Labor before the party was elected.

Before the election, Labor candidates were asked to fill out forms asking them to explain, among other things, “the campaign plan to make the most of this commitment”. The form also included a conflict of interest declaration.

The grants were then approved by Labor’s shadow expenditure review committee. The government has refused to answer questions about how that committee – made up of MPs who are now senior ministers – made decisions about conflicts, citing shadow cabinet confidence.

Following criticism of some of the grants after the election, the government set up a probity scheme run by the Premier’s Department. But those checks were only carried out in 17 of the 93 electorates, despite department officials saying they offered to conduct a more thorough screening.

”We did flag for the minister that we could do that if he wanted us to, but it would hold up the process of the grants administration assessment,” Alison Morgan, a senior official in the Premier’s Department, told the inquiry.

“The response from the minister was that it wasn’t necessary.”

Graham, however, told the inquiry he had been “very open to doing conflict of interest checks across the program” but was “given advice by the agencies that that would be very burdensome, and I was discouraged from doing so”.

He said he thought “any conflicts that were declared” by candidates should have been part of the probity process, but couldn’t “personally guarantee you that has happened”.

“I haven’t done that check, but that is what I have asked to be done and that’s what I understand has happened,” he said.

However, unlike Camden, Riverstone was not one of the 17 electorates subject to checks. Liberal MP Chris Rath, who has been leading the opposition’s probing of the scheme in the inquiry, said the failure to include Kirby’s electorate raised new questions about the integrity of the grants.

“How many other Labor candidates have dodged these necessary checks?” he said.

Labor has played down criticism of the LSCA by pointing out that the eventual sources of funds have not been criticised, even where conflicts might have existed. North West Community Services, for example, has not been the subject of any criticism.

The scheme, a government spokesperson said, was “decisions taken by Labor candidates prior to the election”.

“Following the election, the special minister of state took advice from the department which advised the best and most appropriate way to implement the election commitment made from opposition, in conjunction with the department.

“There is a comprehensive and appropriate process within the department and with external probity advisors.”

NSW Liberal MP Chris Rath has raised questions about how the $37 million worth of funding has been distributed. Credit: Rhett Wyman

But the Herald’s can reveal cases where grants were altered in a potential breach of guidelines, raising accusations of “political favours”.

Under the LSCA guidelines developed by the Premier’s Department, the grants had to be “election commitments”. According to Morgan, those were determined by the “source of truth” document.

But, as the auditor-general noted, the department “did not perform its own assessment of whether this requirement had been met”.

Before Burton was given responsibility for handling it, Josh Wright, a former staffer in Minns’ office who now works as a lobbyist for Eamonn Fitzpatrick’s Labor-aligned firm, was involved in managing the document. He told the Herald he had “accepted the committee’s invitation to provide evidence”.

Despite basing grant eligibility on the “source of truth”, though, Morgan said the document has been subject to a “number of corrections … over some time”.

The most significant were in the electorate of Sydney, held by the influential independent MP Alex Greenwich. Before the election, Labor’s candidate in the seat, Skye Tito, had allocated $400,000 to various homelessness charities in Sydney.

But documents unearthed through a parliamentary call for papers show that funding was later altered. In an email, Morgan wrote that the premier’s office had asked her to “correct” funding amounts in Sydney “7 months after we received the Master list”.

That request followed lobbying by Greenwich, and a separate document shows amendments to the donations with the handwritten note “AlexG/PO”.

The changes altered the amounts given to the charities. In one example, a $10,000 grant to a charity called Will2Live increased to $100,000. But the reasons for the changes remain unclear. Despite the changes being described as “corrections” in parliament this week, Greenwich said he had asked for Will2Live’s funding to be reallocated to other charities because it was not in his seat.

He angrily rejected suggestions in parliament that funding changes in his seat were politically motivated and accused Liberal MP Ray Williams, who has questioned the grants in parliament, of being a “coward”. He demanded Williams “either apologise or make those allegations … without the protection of parliamentary privilege”.

“I will happily see him in court,” he said. “I have taken down far more cunning clowns than him.”

After follow-up questions from the Herald, Greenwich did not explain why the funding to Will2Live appeared to have increased following his intervention.

“Funding allocations are all a matter for government,” he said.

Following the changes to Sydney’s allocations, charities for which Greenwich said he had been seeking grant increases, such as the Wayside Chapel, had their allocations reduced under the LSCA.

Those amounts were then supplemented via a separate grant, called the Premier’s Discretionary Fund.

Documents obtained through parliament show that in February 2024, Minns wrote to at least one affected charity to say that while the organisation had made a “submission” to the LSCA, the grant “cannot be approved” due to “funding constraints”.

Instead, he authorised a grant through his discretionary scheme. The auditor-general noted that in its report, but said the “payment and approval of grants” from the fund was outside the scope of its review.

Bur Rath said the changes raised questions about whether the Minns government – which governs in minority and often relies on crossbench MPs including Greenwich to pass bills – had “doled out taxpayer money for political favours”. The Coalition also argued that the top-up funding means Greenwich’s seat received more funding than other electorates, undermining the government’s claim that LSCA funds were distributed equitably.

In a statement, a government spokesperson said: “We reject that premise and characterisation entirely.

“The grants paid to the Sydney electorate were in line with what was approved prior to the election.”

In a speech to parliament on Wednesday, Greenwich said it was “deeply offensive” and a “conspiracy theory” to suggest the government “bought my vote”. He noted that a supply agreement he and two other lower house crossbench MPs have with the Minns government was signed several months before the changes to the grant funding.

“Any premier I’ve worked with will tell you funding for homelessness services is a top priority for me. However, my confidence and supply agreements with various governments, Coalition or Labor, has never been contingent on this funding,” he told the Herald in a statement.

However, other MPs were not so lucky. In July 2023 Jenny Leong, the Greens MP for Newtown, wrote to the premier’s office asking for changes to donations in her electorate, which included a combined $355,101 to the City of Sydney and Inner West Councils.

Greens Newtown MP Jenny Leong says she failed to get the government to change how the $400,000 was distributed in her electorate. Credit: Anna Kucera

Leong instead asked if “some of this funding” could be made available to public school P&Cs in the electorate. She said one school in the area, Erskineville, had been given a $15,000 grant by the Labor candidate, David Hetherington, and that “there did not appear to be an application process for these other P&Cs to request funding support”.

Hetherington was a former president of the Erskineville Public School P&C. He was contacted for comment. Erskineville Public School’s P&C eventually withdrew its application for LSCA funds.

But Leong was told it was not possible to change the funding.

“At the time, I was troubled by the idea that public money would be allocated to only one of our public schools at the exclusion of others,” she said. “I was verbally informed by Minister [John] Graham, in response to my written request to the premier’s office, that it was not possible to make that change.”

In a statement, a spokesman for Graham said the department would consider developing new guidelines on cost estimates for future grants. The spokesman said the Cabinet Office would review the grant guide and implement recommendations from the auditor-general.

Start the day with a summary of the day’s most important and interesting stories, analysis and insights. Sign up for our Morning Edition newsletter.