Taxpayers’ water body paid for Obeid and co’s exploratory jaunts north to expand

TAXPAYER-owned Sydney Water was inadvertently funding Nick Di Girolamo and the Obeid family’s ambitions.

FOR Nick Di Girolamo and the Obeid family, Queensland was the new frontier — and taxpayer-owned Sydney Water was inadvertently funding their ambitions.

As Australian Water Holdings lobbied successive NSW governments for a proposed $1 billion public-private partnership contract, it was splashing Sydney Water funds on plans to make money in the booming resource sector and urban growth corridors of Queensland. Among the high-flyers who got into business with AWH were: the current head of Queensland’s public service, Jon Grayson; former Queensland Treasury official and chairman of three listed companies, Tony Bellas; Howard government minister Santo Santoro; veteran energy company director Wayne Myers; and developer and big Liberal donor Steve Williams.

Leading the expansion were disgraced former NSW Labor MP Eddie Obeid’s son, Eddie Jr, and Mr Di Girolamo, who set up wholly owned AWH subsidiary Australian Water Queensland in 2006, a year before he began working for the company full-time. In 2010, Mr Bellas, a former state under-treasurer, and Mr Myers, who had well-known ties to the Queensland Labor Right faction, were appointed to the AWQ board.

After the Bligh Labor government was wiped out in the March 2012 poll, Mr Di Girolamo began courting Mr Santoro, a lobbyist and until recently federal Liberal vice-president, through their roles heading the Italian Chamber of Commerce in each state.

Mr Santoro served on the board from June until September 2012, when he resigned amid opposition attacks over his lobbying of the Newman government.

NSW Independent Commission Against Corruption hearings indicate that Mr Di Girolamo allegedly paid a $5000 re-election donation to secure a meeting with then Brisbane lord mayor Campbell Newman in 2007. It is suspected the $5000, along with more than $12,500 spent on political fundraising events, was secretly billed to Sydney Water.

Over the past month, ICAC has heard that AWH’s political donations, as well as possibly hundreds of thousands of dollars worth of expenses to expand into Queensland, were billed to Sydney Water as part of costs to provide water infrastructure in Sydney’s northwest.

Documents show bills for flights to Queensland, restaurant meals at Brisbane’s casino, taxi fares and stays at the Cairns casino. The hearing was told that, in 2009, an employee was told by then AWH director Bill MacGregor­-Fraser to pay Mr Di Girolamo $20,000.

“Nick’s been to Queensland, he’s incurred some out-of-pocket expense in relation to the activities of the company up here and he wants to be reimbursed for them,’’ Mr MacGregor-Fraser reportedly said.

When the employee said Mr Di Girolamo needed to submit an expense form, Mr MacGregor-Fraser is alleged to have smiled and said: “Oh, but Bruce, there’s no expense, it’s just around $20,000 and Nick wants to be paid today … just pay it.’’

Documents produced at ICAC show similar “expenses’’ payments made to Mr Di Girolamo.

AWH initially approached Mr Newman for work in Brisbane, but it appears the focus for Mr Obeid and Mr Di Girolamo from 2007 was Ipswich — a growth corridor west of the city similar to that of Sydney’s northwest.

Ipswich Mayor Paul Pisasale told The Weekend Australian Mr Di Girolamo had courted his council for work. His register shows that AWH or Mr Di Giro­lamo had paid for dinners and Mr Pisasale even went to Sydney to inspect their work at the council’s expense. “We were in drought at the time and we were desperate for water, and looked at their reticulation systems,’’ he said. “We hadn’t decided anything and then it flooded — we pulled out.’’

After that, AWH began to focus on a greenfield housing development by Sekisui House, run in Australia by Mr Williams. AWH and Mr Grayson also started joint-venture company Gasfields Water Management, with Mr Grayson taking a 25 per cent stake and AWH 75 per cent. Mr Di Girolamo was a director, along with Mr Bellas and Mr Myers.

GWM, which was deregistered late last year along with AWQ, had a proposed $5 million contract with Sekisui House. It didn’t work out.

While both companies were closed as allegations about AWH heated up last year, ambitions to exploit the new frontier remained.

A new company, Gasfields Water and Waste Services, was created last year with equal shareholdings held by Mr Grayson, Mr Obeid, Mr Di Girolamo, Mr Bellas, Mr Myers and Dennis Jabour — a cousin of Mr Obeid who also worked for AWH.

Mr Obeid and Mr Di Girolamo have since transferred their shareholding to Mr Jabour, now the sole director.