ICAC Inquiry: Gladys Berejiklian’s $20m grant approval ‘a potential conflict’

Gladys Berejiklian approved $20 million in funding for a second project advanced by her former boyfriend Daryl Maguire.

Gladys Berejiklian approved $20m in funding for a project advanced by former Liberal MP Daryl Maguire, and was instrumental in progressing another grant for his seat of Wagga Wagga, a senior bureaucrat who gave evidence to a corruption inquiry on Thursday said.

Chris Hanger, a deputy regional secretary with the Department of Regional NSW, told ICAC that he would have escalated the “potential conflicts” with his superiors had he known about Ms Bere­jiklian’s undeclared relationship with Mr Maguire while working on each project.

The Independent Commission Against Corruption’s investi­gation, Operation Keppel, is examining whether Ms Berejiklian breached the public trust by not disclosing her relationship during her deliberations as treasurer and premier over funding for Mr ­Maguire’s electorate.

Additional allegations being examined include whether Ms Bere­jiklian also withheld knowledge or suspicions of corrupt conduct, and whether she potentially encouraged that conduct by failing to act within her duties.

Mr Hanger was the bureaucrat tasked with overseeing two funding grants sought by Mr Maguire - a $5.5m grant approved for the Australian Clay Target Association, and $20m in funding that was set aside for the Riverina Conservatorium of Music.

Both grant requests were initially rejected by agencies within the NSW government, but these were later overturned through what Mr Hanger and other ­bureaucrats have described as the direction of Ms Berejiklian, either during her time as treasurer or as premier.

Other ministers were involved in these decisions, including the then sports minister Stuart Ayres, who will give evidence on Friday.

Mr Ayres was appointed NSW deputy Liberal leader earlier in October.

In relation to the ACTA proposal, the hearings have been told of elevated concerns from numerous public servants on account of glaring deficiencies with its business case. It also circumvented routine government safeguarding procedures, and was rushed on to the agenda of a subcommittee of cabinet for deliberation, a step not ordinarily taken for projects of such a modest size.

It was ultimately awarded the funding conditional upon an independent assessment of the project’s benefit-to-cost ratio, which was conducted in April 2017, scoring a BCR of 0.88, just below the 1.0 benchmark required.

Mr Hanger said he was instructed by the office of former deputy premier John Barilaro to reappraise the business case and it subsequently scored 1.1 in August 2017.

“Do we take it from that that the deputy premier’s office was quite desirous of getting this project off the ground?” asked ICAC’s counsel assisting, Scott Robertson.

“My understanding at that time (was) the interest was out of the premier’s office,” Mr Hanger replied, referring to Ms Berejiklian.

Asked whether it was advisers in her office or the premier, Mr Hanger said: “I understood it to be the interest of the premier herself.”

Mr Robertson turned later in the hearing to the Riverina conservatorium, which had been seek­ing to acquire a site on Simmons Street in Wagga Wagga to use as a permanent base.

This had been refused under the government’s unsolicited proposal process, but an alternative solution was offered by Ms ­Berejiklian.

She wrote to Mr Maguire informing him that she had instructed her department to work with the RCM board “with a view to establishing the RCM on the Simmons Street site”.

This would allow the land to remain government-owned.

Earlier Mr Robertson asked if Mr Hanger would have “done anything differently” had he known about the undeclared relationship between Mr Maguire and Ms Berejiklian.

He said he would have “put in place ways of identifying and managing potential personal conflicts of interest”.

“So at least you would see that matter as a potential conflict?”

“Yes.”