How money talks in Victorian politics: Five lessons from the Casey corruption scandal

From cash drops in far-flung suburban Subway restaurants to political schmoozing at soirees in Chinatown’s Flower Drum, the saga of the Casey land deal has revealed just how loudly money talks in Victorian politics.

More than  $1 million changed hands, some in suitcases and shopping bags, securing allegedly corrupt decisions by a local council.

Hundreds of thousands in donations have been poured into Labor and Liberal coffers to sway state and federal MPs.

Either way, cash was spent to secure outcomes. Over the past 12 months, the truth – or parts of it – has been dragged from key players by the Independent Broad-based Anti-corruption Commission in hearings that have now concluded.

Secret phone taps, grainy photographs and footage have shown the protagonists in action. Unprecedented weeks of testimony have laid bare their lies and distortions.

So what have we learned from IBAC’s Operation Sandon, which centred on issues first publicly raised by The Age in 2018? And what can be done to address the weaknesses of our political and planning systems?

The Cranbourne West farmland at the centre of IBAC’s probe relating to Casey Council.Credit: Joe Armao

1. Money, money, money: Donations

As the public hearings of Operation Sandon drew to a close, an increasingly frustrated IBAC Commissioner Robert Redlich, QC, described political donations as a form of “corruption”.

“Can we not put to rest once and for all the notion that people don’t make substantial donations in the expectation that they will get support in return from the party or from ministers when there’s a need?” he pleaded.

IBAC had heard how flamboyant developer and planner John Woodman showered local, state and federal politicians with donations, targeting local MPs and candidates from both major parties in the locales where he was seeking planning approvals. The key case study was his bid to rezone land in Cranbourne West to residential, a move that would have netted the landowners and Woodman as much as $150 million.

IBAC heard Woodman had met Premier Daniel Andrews at Labor fundraising events.Credit:

Over a decade, Woodman poured $400,000 into political parties at state elections alone, splurging almost $160,000 on Labor and about $60,000 on the Liberals in 2018 in his bid to win support for the rezoning.

An analysis by The Age shows that just $139,800 of these donations were disclosed by Woodman’s companies and/or the two political parties.

IBAC discovered Woodman had used the common practice of “splitting” donations across assorted companies so no single contribution exceeded $14,300 in value.

Under federal law, that meant the parties did not need to disclose them. In one case, he gave $60,000 to Labor’s Progressive Business through donations of $10,000 from six different companies.

So effective was Woodman in winning access and influence that IBAC heard he had made Casey councillors his “puppets” and a group of sitting and aspiring state MPs effectively part of his “team”.

Former Cranbourne Labor MP Jude Perera even conceded to IBAC that Woodman’s lawyer had written a submission in Perera’s name in support of the Cranbourne West rezoning, a situation described as “spectacularly inappropriate” by counsel assisting IBAC Michael Tovey, QC.

Former Labor MP Jude Perera allowed a Woodman staffer to write official submissions for him.Credit:

While the Andrews government introduced laws from November 2018 capping all donations at $1000 a year (it is now $1040), there is no cap on donations at the local or federal level, providing loopholes for highly motivated people on both sides of the donation to exploit.

Dr Yee-Fui Ng, a political finance specialist and Monash University law lecturer, described Australia’s donation laws as a “big mess”. The only thing that would fix it would be uniform and strict regulation across the country and at all levels of government.

She also backed a total ban on developer donations and called for a cap on campaign spending to reduce the “arms race” between the political parties.

2. To declare or not? Conflicts of interest

The Bunjil Place Civic Centre at Narre Warren that houses the Casey council chamber is right next door to the sprawling Fountain Gate shopping centre, famously frequented by TV duo Kath & Kim.

Until their sacking in February this year, councillors at Bunjil Place presided over one of the biggest and fastest-growing municipalities in Australia. Instant fortunes are made whenever councillors and planning ministers earmark humble cow and veggie fields as new housing estates.

Like Kath & Kim, however, Casey councillors weren’t too fussed about life’s fine print.

Former Casey major Sam Aziz allegedly took hundreds of thousands of dollars from Woodman companies before making decisions in their favour.Credit:

At the local level, councillors are required to declare conflicts like gifts, payments and donations from an individual or company involved in matters before the council. Councillors over many years failed this simple task.

IBAC revealed that former mayor Sam Aziz received payments from a slew of developers and others doing business with the council, including Woodman and a company linked to Kuwaiti sheikh Mubarak Abdullah al-Sabah. IBAC heard how Aziz rarely, if ever, declared the most glaring conflicts over many years.

Sheikh Mubarak Abdullah al-Sabah, whose company paid $230,000 to one-time Casey mayor Sam Aziz before making a killing on a property deal in the municipality.Credit:

A parade of now ex-Casey councillors, including former Liberal MP Gary Rowe and one-time Liberal state candidate Amanda Stapledon, conceded to IBAC their failures to declare conflicts generated by Woodman’s donations.

All this also appears to have escaped the notice of authorities, including council watchdog the Local Government Inspectorate.

Philip Shanahan, a former Darebin and Maribyrnong council chief executive turned consultant, told IBAC that the rules should be tightened to require councillors to identify conflicts, “spell out” their exact nature and prohibit those with conflicts from lobbying other councillors about the issue that presents a conflict of interests for them. He also called for “strong punitive measures” for those not meeting their obligations.

The situation is arguably worse among state MPs and ministers.

IBAC heard of politicians meeting and mixing with developers and lobbyists who were donating to the MPs’ campaigns and also seeking support for planning approvals. In one case, Woodman offered MP Judith Graley a post-parliamentary job as she approached the office of Planning Minister Richard Wynne in support of the Cranbourne West rezoning.

None of these dealings are subject to conflict-of-interest rules and such meetings and communications are not recorded.

3. Behind closed doors: Transparency and accountability

In one secretly recorded telephone conversation from late 2018, Labor-linked lobbyist and Woodman ally Phil Staindl complained to Woodman that Perera had “spilled his guts” by telling The Age about Woodman’s donations.

Phil Staindl had a dual role as a planning lobbyist and a key fundraiser for Labor. Credit:

“Well, there’s not much transparency occurring ... where you are appalled at a politician telling the truth about his fundraising,” commissioner Redlich quipped to Staindl.

What few rules exist to reveal the money flowing into politics in Victoria, or the real work of political advisers, are weak and full of loopholes. Ng told IBAC that this lack of transparency increased the potential for corruption “because when things happen behind closed doors there is more of a risk that something improper might happen”.

She has called for the “proactive” disclosure of ministerial diaries and for a special commissioner to oversee the work of politically appointed ministerial advisers.

Woodman and his team had free access to private staffers in Wynne’s office.

‘Free access’: Richard Wynne had the ultimate power to decide on the Casey land deal. Woodman had a ‘back channel’ into his office through his staffer.Credit:

Internal emails between Woodman and his team show Staindl saying he had struck an agreement with Wynne’s chief of staff, Peter Keogh, about “protocols for back-channel communication”. Wynne ultimately turned down the Cranbourne West development application after The Age articles and the IBAC investigation.

Called as a witness, Keogh rejected Staindl’s claim but did concede that little of his work, including his dealings with lobbyists seeking lucrative approvals, was regularly recorded.

The role of the adviser emerged in the 1970s and 1980s. While public servants are appointed on merit, advisers tend to be part of the network of patronage in the governing party. In other words, they’re often party “hacks”. Ng says they are influential because “they are the minister’s eyes and ears”.

Yet in Victoria, there is no “real” public regulation of ministerial advisers.

Ng called for a publicly available code of conduct for advisers, overseen by an independent commissioner, and for clear guidance in advisers’ dealings with public servants, business and lobbyists.

4. The “back channels”: Lobbyists

Throughout its public hearings, IBAC paid close attention to the role of lobbyists. Staindl, a veteran Labor lobbyist, and former Liberal MP turned lobbyist Lorraine Wreford were key witnesses. Both were consultants to Woodman.

Staindl has long been a controversial figure in Victorian politics through his merging of roles as a lobbyist and party fundraiser. Phone recordings and seized emails revealed the importance of Staindl to Woodman’s operation. He rubbed shoulders with the Premier at swanky restaurants and sidled up to his ministers at Labor fundraising events. Then he boasted about his “back channels” into the government.

On the conservative side, Woodman used Wreford as a go-between with key Liberal-linked councillors Aziz, Stapledon and Geoff Ablett.

Former Liberal MP Lorraine Wreford was a go-between for Woodman with Liberal politicians and councillors.Credit:

In 2009, the Brumby government introduced a lobbyists’ code of conduct and a register on which lobbyists are supposed to list the companies, directors, owners and clients they represent.

But IBAC heard the register is outmoded and does little to improve transparency. Expert witnesses pointed to countries like the US and Canada, where lobbying is much more closely regulated.

In Scotland, the lobbying register has a searchable database that includes each contact a lobbyist has with government officials, including who they met and the subjects discussed.

Specialist witnesses told IBAC that Victoria needed more rigorous regulation of consultant lobbyists and those working “in house” for companies and organisations, and strictly enforced bans on success fees and gifts to government officials.

Dr Cameron Murray, from the planning school at the University of Sydney, recommended a four-year cooling-off period for departing government officials before they could take up lobbying.

The longer a politician spent away from the corridors of power, the less connected and influential a former MP or adviser would be. “Election cycles occur, the policy environment changes, their trusted personal friends retire or die,” he noted.

5. Taking the honey off the table: Windfall taxes

Planning remains a corruption risk because of the massive windfalls generated by a single decision, especially in rezonings.

Woodman told IBAC that one Cranbourne South property he helped rezone for housing appreciated in value from $5000 to $600,000 per acre. The owners, the Carpenter family, bought the property for about $70,000 in the 1970s and sold it for $55 million.

Critics have long argued that such profits are irresistible to speculators and developers and can be used in turn by a cashed-up property industry to pressure politicians to continue opening up the urban frontier, as has happened at Casey.

Murray estimates that such planning decisions generate about $3 billion a year in Victoria – massive windfalls for landowners.

“As long as you keep giving it away, there’s going to be this huge incentive for corruption and to curry favour with decision makers,” Murray told IBAC.

The answer, IBAC heard, is to remove the “honey pot” and institute a betterment tax or property licence. In the ACT, they do just that, with a 75 per cent levy on the uplift from rezoning and other planning decisions.

Such a tax would reduce speculative pressure and deliver big dollars for sorely-needed public infrastructure such as transport, schools and hospitals, IBAC heard.