Watchdog struggles to net elusive big fish

ICAC exposed NSW Labor’s donor scandal but we don’t know who’ll be left holding the bag.

Jamie Clements leaves the NSW Independent Commission Against Corruption public inquiry into allegations concerning political donations in Sydney on October 11.

The story of a Chinese property developer strolling into the NSW Labor Party’s head office off Sydney’s Sussex Street carrying an Aldi supermarket bag stuffed with $100,000 cash was a headline grabber from the moment it surfaced.

It was late August, day one of a corruption inquiry’s public hearings. The NSW Independent Commission Against Corruption was delving into whether a dozen “fake” donors had been used to hide billionaire Huang Xiangmo as the true source of the cash following a Chinatown fundraiser in March 2015.

Huang, like all developers, legally could donate to political parties for federal elections but was banned under NSW laws from giving money to that state’s campaigns. Almost two months later, what has ICAC unearthed in its quest to get to the bottom of the Aldi bag? Drama, ruined relationships, even a shocking tragedy exposed, but few indisputable facts.

One is certain: the NSW ALP head office had in its possession $100,000 cash on April 9, 2015. We know this because Jenny Zhao, the NSW ALP’s finance deputy, banked the cash in two equal amounts of $50,000 in party accounts.

The compelling evidence of “fake” donors could give ICAC grounds for recommending criminal prosecutions related to an illegal scheme to circumvent the state’s electoral funding laws — but more of that later.

When it comes to the headline claim Huang walked into ALP head office carrying a bag of cash and gave it to party secretary Jamie Clements, the search for truth gets murky. It is one person’s word against another’s, conflicting versions of Clements and Kenrick Cheah.

So far, Cheah, still employed as NSW Labor community relations director, has stuck to his version that he saw Huang give the Aldi bag with cash to Clements. Alas, there were no witnesses in the open-plan office on a Tuesday or Wednesday immediately after the Easter long weekend in April 2015. Cheah has said Clements handed him the bag after Huang left and told him to count the money, all $100 bills held together with strips of stapled green paper. By day’s end, Cheah had not finished counting and, bizarrely, took the bag home to finish the job because there was no safe in the office. The money was banked the next day.

Cheah’s evidence might seem too authentic in its prosaic detail to be made up. Yet Clements says it all untrue. Indeed, Clements says he did not involve himself in donations and knew nothing about the cash until much later, despite being party general secretary with ultimate responsibility for fundraising. The hotly disputed story leaves only one man who could help — Huang — by answering two simple questions: Did he deliver a bag of cash? Did he give it to Clements? If Huang answered yes to both, then Clements would have a problem explaining why he accepted $100,000 from a property developer.

ICAC has invited Huang to give evidence, by videolink, but he has refused. He now lives in Hong Kong, his Australian residency cancelled after ASIO rated him a “foreign interference” risk. There is circumstantial evidence helpful to ICAC, but still not enough to make definitive findings on Clements. First, Huang did attend Clements’s office for a brief meeting on April 7 or 8 in the company of then executive assistant Tim Xu.

Xu agrees it was possible Huang was carrying a bag, most likely containing a customary gift of wine. As translator, Xu recalls Huang wanting help from Clements to “smooth the way” with Victoria’s Labor government for a visiting Chinese delegation.

Clements has a somewhat different version: he recalls Huang wanting help to arrange a meeting with Bill Shorten. He called Shorten while the property developer was in the room, and the trio dined some weeks later at Master Ken’s Seafood, a pricey Chinatown restaurant that would become a regular for Clements as he became very close to Huang.

So close that by May 2015 Clements felt able to ask Huang for $10,000 cash to help a union leader needing money for his election. In August 2015, Clements says he was summoned to Huang’s mansion in Mosman where the billionaire gave him $35,000 cash in a wine box to help pay his legal bills in a police common assault case.

When that matter involving a female Labor staffer cost Clements’s job in January 2016, Huang paid him a $624,000 retainer over three years and gave him a free office. Financial transactions were central to their relationship. Clements’s successor in NSW ALP head office, Kaila Murnain, has now lost her job because she learned of the $100,000 cash scandal afterwards and did nothing about it. She risks prosecution, and a possible two years’ jail, for giving misleading information to the NSW Electoral Commission when it investigated before ICAC.

The man with most to lose is probably Ernest Wong, a NSW Labor MP until March this year and co-organiser of the fundraiser at the heart of the scandal. Wong, formerly close to Cheah, has stuck to his story he gave Huang a bag of cash collected from others on the night of the Chinatown fundraiser because Huang said he had a scheduled meeting with Clements and would deliver it personally.

The problems with this scenario? No one remembers large sums of cash at the fundraising dinner; no one saw Wong give Huang a bag of cash; and a month passed before Huang met Clements.

Wong has many more problems. Surviving “fake” donors — Yee family owners of the Emperor’s Garden restaurant, their low-paid staff, a souvenir shop owner and a retired building project manager — have said under oath Wong pressured them to stick with false evidence they donated to Labor when they gave nothing.

One fake donor, Emperor’s Garden restaurant manager Jonathan Yee, has gone further, saying he “masterminded” the cover-up with Wong, told others to sign false donation declarations and then helped Wong arrange secret meetings where fake donors were told to keep lying.

It would be a sad, unfair outcome if people put under duress to be pretend donors faced prosecution. All the same, Murnain aside, ICAC is struggling to ensnare any big fish. So far it’s down to Jonathan Yee and Ernest Wong.