State Labor boss to quit as ICAC donations fallout spreads

Kaila Murnain is expected to quit as she faces a ­grilling over an alleged donation law breach.

NSW Labor General Secretary Kaila Murnain. Picture: AAP

NSW Labor boss Kaila Murnain is expected to quit as she faces a ­grilling today over allegations that Chinese billionaire Huang ­Xiangmo gave an Aldi shopping bag stuffed with $100,000 cash to staff at the party’s headquarters in ­Sydney where she worked.

Leaders from a group of right-wing NSW unions and NSW ALP president Mark Lennon met for a ­special briefing yesterday to ­discuss a worsening crisis for the state ALP over electoral funding irregularities, and the timing of Ms Murnain’s likely exit.

The leaders of at least six ­unions that control numbers in the dominant NSW Labor Right, with the power to choose the party ­organisation’s chief, said Ms Murnain’s resignation had become a central issue.

One senior official at the meeting, hosted by Unions NSW in Sydney’s old Trades Hall building, told The Australian: “No one is going to move on her, but she’s ­indicated she’s going — that’s the advice we’ve received.”

The officials yesterday canvassed possible successors for the position of NSW party general secretary, with Rail Tram and Bus Union national secretary Bob Nanva and well-regarded party staffer and army reservist Andrew Downes considered the favoured candidates at this stage.

At a hearing of the NSW Independent Commission Against Corruption today, Ms Murnain will be questioned about what she knew of allegations that Mr Huang personally delivered $100,000 to then party secretary Jamie Clements several weeks after a Chinatown fundraiser for the March 2015 state election.

Kaila Murnain. Picture: Adam Taylor

At the time, Ms Murnain was the deputy to Mr Clements and ­allegedly at the party’s Sussex Street office on the day Mr Huang arrived with the cash-filled bag.

Scott Morrison yesterday called on federal Labor leader ­Anthony Albanese to reveal who else was aware of the party donations scandal.

“Anthony Albanese should answer the ­question … what does $100,000 buy you?” the Prime Minister said.

“I’m not suggesting he was involved­ in it but it’s happened in his own branch and I would expect him to take some significant action­.”

Mr Morrison also highlighted the fact Mr Huang was a ­Chinese national who was refused re-entry to Australia by the government in December, following advice from ASIO that he was a security risk.

The Prime Minister said the links to foreign interference were a deep concern and that intelligence agencies were alert to it.

“They have been alert to this … yes there is the issue of the return of the bagman but there is the issue of how it relates to an individual who had been under observation,” he said.

“Cash in bags is one thing but there is a more serious undertone and that of foreign interference … this is very disturbing.”

ICAC is hearing evidence to ­determine whether donations to NSW Labor were made legally by individuals, or by one or more “straw” donors behind a Chinese Friends of Labor event in March 2015.

A key ICAC witness, NSW party official Kenrick Cheah, told the hearing yesterday that Ms Murnain saw the Aldi bag that Mr Huang brought to the office.

Kenrick Cheah. Picture: Richard Dobson

Mr Cheah claimed that after Ms Murnain saw the bag and asked about it, he told her that it was full of cash. He said he was “pretty sure” that Ms Murnain told him to be careful, in terms of ­safety, when he took the bag home overnight after failing to finish counting the cash on the day it ­arrived, as Mr Clements had alleged­ly asked.

Several possibly contradictory accounts of what Ms Murnain knew and what action she took, if any, are likely to be tested today.

In an earlier private ­compul­sory examination by ICAC investigators, Ms Murnain said that then NSW Labor MP Ernest Wong had told her Mr Huang was the “true source” of funds that were said to have been donated by others.

But Ms Murnain suggested something different when she signed a ­separate letter, in ­response to a reques­t for inform­ation during an initial investig­ation into the matter­ by the NSW Electoral Commission.

In that letter, Ms Murnain did not identify Mr Huang as the donor or the delivery man, instead agreeing that Mr Cheah, who reported­ directly to her as the NSW ALP’s community relations director, had himself brought the funds into the office.

Leaders from NSW right-wing unions including the Transport Workers Union (by phone), the Health Services Union, the Shop Distributive and Allied Employees Association and the Australian Workers Union agreed yesterday to assess the situation again after Ms Murnain’s two days of scheduled ICAC evidence.

Ernest Wong. Picture: AAP

One senior party insider said the donations scandal was causing such political damage that it threatened prospects of rebuilding and gaining support from voters, after a shocking defeat at the March state election that had seen the party’s primary vote slip ­further.

Party officials are also concerned­ that internal damage to NSW Labor from the donations scandal could prompt unwanted national ALP intervention in the affairs of the state branch.

Officials meeting yesterday said they expected Ms Murnain’s deputy, Pat Garcia, to take over as interim party secretary after her departure until a long-term successor­ was found.

“We’re going to be seeking undertak­ings from any successor, in writing, that they intend to stick with the position,” one official said.

“No more revolving door, or using the position as a stepping stone into politics.”

The NSW ALP has suffered a quick turnover of party leaders over the past decade or more.

Office-holders Mark Arbib, Karl Bitar, Matt Thistlethwaite, Sam Dastyari, Mr Clements and now possibly Ms Murnain all served in the key campaign and fundraising job for short periods.

The only long-term holders of the job in the past 40 years have been Graham Richardson and John Della Bosca.

Ms Murnain has adopted the social media nickname­ “Boss Lady” and boasted of her party ­organisation as “Fortress NSW”, despite scoring no electoral wins during her tenure­ or those of her immediate predecessors.

She declined to comment last night on high expectations that she would be leaving her post, or yesterday’s meeting of senior union officials from her dominant faction.

Nor would she comment on recen­t reports circulating in the NSW ALP that she had put her name forward with corporate headhunters for possible jobs outside­ her party.

A spokesman for Ms Murnain said she was “focused on assisting the ICAC with their inquiry”.