ICAC: Liberal machine trapped by the corruption watchdog prying into its questionable 2011 election fundraising activities

ANALYSIS: In March, 2011, the very month Barry O’Farrell celebrated the biggest election win in NSW’s history, a single complaint was made that ended up costing 10 Liberal MPs their jobs.

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IN March, 2011, the very month Barry O’Farrell celebrated the biggest election win in NSW’s history, a single complaint was made that ended up costing 10 Liberal MPs their jobs, led to a former senior minister facing larceny charges and another being punted from the parliamentary Liberal Party.

Matthew Lusted, a failed former Liberals preselection candidate aligned to Senator Bill Heffernan, rather than Chris Hartcher, revealed to the party that he had been asked for a donation to the Libs that went to an organisation called Eightbyfive. When the party took that to ICAC in May, it led to a two-year investigation that racked up a whole lot of Liberal scalps.

ICAC found Eightbyfive was at “the centre of a … sophisticated arrangement to evade election funding laws”.

From there the dominoes fell.

The corruption watchdog found “the NSW Liberal Party had declared $787,000 in donations from an organisation named the Free Enterprise Foundation — an unusually large amount … by a single donor.

Liberal Party leader Barry O'Farrell celebrates his win in the 2011 NSW state election.

“The evidence suggested that the money … included substantial sums that had come from prohibited donors.”

For those who sat through the Operation Spicer proceedings, it was clear what had gone on prior to 2011’s election: Systematic cheating of the system. The Libs fell for former premier Nathan Rees and NSW Labor’s honey trap when they banned developer donations in state Parliament in 2009.

According to evidence before the commission, they decided to game the system — Hartcher on the Central Coast and characters in Liberal head office. Stupid, when you consider 2011’s landslide was so great they did not need those donations. The push was spurred on by the requirement of O’Farrell, the former leader, who insisted on setting targets for MPs and their donations.

And so a corruption watchdog bolstered by extra money from O’Farrell to look at the likes of Eddie Obeid and Ian Macdonald ended up ensnaring a whole bunch of government MPs. What emerged was a tale about cash being handed over to prospective MPs in ­envelopes and all the sorts of things you fear politicians get up to but hope they don’t.

Labor people have certainly complained to me about the fact there was only one formal corruption finding yesterday — and that was against former ALP minister Joe Tripodi — and that there are few prosecutions coming for so many ­illegal activities.

There are a couple of reasons for this: The Cunneen High Court judgment against ICAC, and resulting changes to ICAC laws that mean MPs cannot be found corrupt for electoral law breaches alone.

Another is a crazy original statute of limitations of three years for electoral law breaches (the government has changed this to 10 years but not made it retrospective).

What undid the Liberals in the end was greed. More and more money was raised in the hope of winning more and more seats to pulverise Labor into submission.

If O’Farrell had remained premier, he would have struggled to maintain office given the stench that lingers around that 2011 victory.