We’re in a terrible state: Labor leader

Jodi McKay says she “cannot fathom” how a donations scandal has been allowed to fester.

NSW Opposition Leader Jodi McKay. Picture: AAP

NSW ALP leader Jodi McKay has declared her party is in a ­“terrible state” and she “cannot fathom” how a ­donations scandal involving “bags of money being brought into Labor headquarters” had been allowed to fester for five years.

Declaring a lack of confidence in her party’s campaign organisation, Ms McKay yesterday warned that Labor would not win government again until it earned the trust of voters.

Referring to an Independent Commission Against Corruption investigation that uncovered ­illicit donations to the NSW Liberal Party in 2014, Ms McKay said: “How does this keep happening? (ICAC) had just finished and yet here we were with bags of money being brought into Labor headquarters. I cannot fathom that … right now our party is in a terrible state.”

The Opposition Leader was commenting a day after ordering the suspension of NSW party head office boss Kaila Murnain, who had admitted in ICAC hearings on Wednesday that she kept quiet in September 2016 when told Chinese property developer Huang Xiangmo had made an illegal donation to the NSW ALP.

During her second day of ICAC evidence yesterday, Ms Murnain broke down as she ­admitted she had lied to the NSW Electoral Commission during initial inquiries in December 2016 about donation irregularities.

Kaila Murnain leaves the ICAC hearing yesterday. Picture: John Grainger

Under intense questioning, Ms Murnain admitted to having given “misleading” information to the electoral authority about a $100,000 cash donation.

She confirmed she had signed a letter in response to the electoral commission’s questions about a Chinese Friends of Labor ­fundraising dinner in March 2015 that falsely said the $100,000 ­donation was brought to the NSW ALP’s head office by a party official, Kenrick Cheah.

Ms Murnain did so, she said, despite Labor MP Ernest Wong telling her three months earlier that the party had received an illegal donation following the 2015 fundraising dinner. Mr Wong also told her Mr Huang was the “true source of funds”.

ICAC counsel assisting, Scott Robertson, accused Ms Murnain yesterday of deliberately misleading her NSW ALP head office governance director, Julie Sibraa. He said Ms Murnain had delegated the job of preparing the letter she signed to the electoral commission to Ms Sibraa.

Ms Murnain had misled Ms Sib­raa by not telling her the “full facts” needed to accurately disclose what happened.

Ms McKay described Ms Murnain as a “broken person” and said she would not be returning to her job as party secretary ­following moves to suspend her on full pay on Wednesday night. Nor would she ever be a state or federal MP, she added.

Federal Labor leader Anthony Albanese continued to remain ­silent on the issue. His spokesman said Mr Albanese “was not making any comment at this point” in response to The Australian asking whether he planned to take any action regarding the ALP branch in his home state, including possible appointment of an administrator to take charge.

On Wednesday, Ms Murnain said she kept quiet about the donations scandal involving Mr Huang because the NSW Labor Party’s lawyer, Holding Redlich national managing partner Ian Robertson, told her “don’t tell anyone about it”. Yesterday, Ms Murnain said she stayed silent because she was following the advice ­“religiously”.

Former ALP senator Sam Dastyari arrives by share bike to give evidence at ICAC yesterday. Picture: AAP

She was “scared” for her party after it had endured court battles and fought by-elections and internal upheaval related to her predecessor, Jamie Clements. She said she sought advice from Mr Robertson after then senator Sam Dastyari told her to see a lawyer about the information she had received from Mr Wong.

It was illegal — and remains so — for property developers to donate to NSW political parties.

In evidence to ICAC yesterday, Mr Dastyari agreed with Ms Murnain’s account that he told her to see the NSW ALP lawyer for advice shortly after Mr Wong informed her of an “improper” party donation. He also said in private evidence to ICAC last week that he told her: “My advice would be to cover your arse and tell everything to Ian Robertson.’’ He agreed Ms Murnain had mentioned Mr Huang’s name to him when they met in his car to discuss the issue.

Yet several contradictions and inconsistencies in the pair’s evidence emerged yesterday. Records obtained by ICAC showed Ms Murnain met Mr Dastyari shortly after she had seen Mr Robertson about the donation irregularities, and not before as Ms Murnain originally claimed.

It also appeared according to Mr Dastyari’s evidence that Ms Murnain did not tell him she had seen Mr Robertson when they met. Also according to his evidence, it appeared Ms Murnain did not tell him when they met that Mr Robertson had allegedly told her, as she claimed in the ICAC on Wednesday, to “forget all about” Mr Wong’s claims on possibly illegal donations.

ICAC yesterday demanded Mr Dastyari hand over his mobile phone for a full download of its contents after Ms Murnain’s lawyer, Ian Neil SC, made new claims that she had two meetings with the former senator on September 16, 2016 — one before seeing Labor’s lawyer, and one after. Mr Dastyari insists they met only once for 90 minutes, when he advised her to see Mr Robertson.

Ms Murnain has said she did not know Mr Huang or anything about him at the time of the March 2015 Chinese Friends of Labor dinner. She says she first met him in early 2016, as the new party secretary, when she went to his then Sydney office with Labor frontbencher Chris Bowen.