Sam Dastyari has discovered the perils of sticking his neck out too far — and perhaps his hand as well. At 33, the diminutive Labor senator from NSW with the signature black quiff hairstyle was clearly enjoying his stellar, if so far short, political career until this week.
In the three years since leaving his job as head of the ALP’s party machine in Sydney for a Senate seat in Canberra, Dastyari had built an impressive profile with his sharp-tongued, much-reported criticism of corporate greed. He missed no opportunity to bash the power and political influence of banks.
Bill Shorten rewarded Dastyari’s help on the campaign bus during the recent election marathon by elevating him to the frontbench and making him manager of opposition business in the Senate.
The media loved Dastyari, too, or seemed to. His star undoubtedly was shining brightly, as Barnaby Joyce neatly encapsulated: “Sam Dastyari is Canberra’s version of Hollywood all in one package.”
Dastyari still may hope to resume his rise up the party ladder like others before him who have toughed out crises. But he looks badly damaged politically, and possibly “compromised” by a worsening scandal over his acceptance of large donations from companies with strong links to the Chinese government.
It began as a decision that Dastyari now admits was foolish: he agreed to — even solicited — payments from a company called Top Education Institute totalling $1640 to cover travel bills for his staff last year because he had exceeded the limit payable under his parliamentary entitlement. Dastyari declared the donation — but that was not the end of it.
He knew the payment did not reflect well on him when it came to public attention, otherwise he would not have conceded this week: “I should have paid that amount myself.”
Dastyari’s embarrassment was compounded when he tried to compensate for the lapse by personally donating an equivalent sum to an indigenous charity. The charity returned the funds, saying it did not want to be “compromised” by accepting the money. Dastyari had to find another willing recipient.
There the matter could have rested, despite taunts in parliament from Liberal senator Cory Bernardi that Dastyari was Labor’s “Manchurian candidate” and Bernardi’s further claim, also protected by parliamentary privilege, that the matter had the “stench of corruption”.
Dastyari’s problem was that the $1640 drew attention to the much larger question of donations to Labor, and political parties generally, from Chinese businesses that have the backing of the communist government regime. It’s often called soft diplomacy, but the Chinese or any other foreign government offering financial help to politicians in Australia might reasonably hope to expand their influence, even if not requesting something directly in return.
Dastyari had to hope this week that the load could be spread if opponents in the Liberal and National parties were found to have received similar help.
In the meantime, his own problems compounded. It emerged that another Chinese company, Yuhu Group, paid $40,000 to cover Dastyari’s legal bills when he was sued over an advertising account dispute in 2013. Two separate Dastyari trips to China were paid by the China Institute of Foreign Affairs and the International Department of the Communist Party. Two bottles of wine from the Yuhu Group were given to Dastyari, who passed them on to the Exodus Foundation, a homeless support group. It’s not that long ago that a NSW Liberal premier, Barry O’Farrell, resigned over accepting a bottle of Penfold’s Grange.
Dastyari’s connections with the Chinese might have been dismissed as nebulous if it were not for extraordinary views he expressed, as reported by Chinese media, that were most welcome in Beijing but completely contrary to the policies of the Coalition and his own party.
It seemed only to reinforce Bernardi’s gibe about the “Manchurian candidate” that on June 17 — in the midst of this year’s federal election campaign — Dastyari was reported as lending his support to China’s claims over islands in the South China Sea. “The South China Sea is China’s own affair. On this issue Australia should remain neutral and respect China’s decision,” Dastyari was quoted as saying.
At the time he made the remarks, Dastyari was speaking at a press conference in which he stood next to Huang Xiangmo, a Chinese political donor and coincidentally the man whose Yuhu Group company paid his $40,000 legal bill. He went further in a separate Chinese media article in 2014, saying the “Australian government” must abandon its “hostile stance” on China’s air defence identification zone around the contested islands.
At an official level, federal Labor has had no choice except to effectively rebuke Dastyari. The party shares the Turnbull government’s acceptance of The Hague’s international law ruling against China’s territorial claims in the South China Sea — one ignored by China.
Dastyari has since clarified his position, saying “there is no difference between my position and Bill Shorten’s position on the South China Sea — the best outcome is where the rule of law is recognised”. In other words, the Hague decision. But the clarification would seem a little belated.
David Burchell, senior lecturer in history and political thought at the University of Western Sydney, identified the overarching problem in comments to The Australian this week by pointing out that electoral laws and the parliamentary procedure rules have been vague about political donations in general, but donations from overseas citizens in particular. Burchell meant from China, or any other country. He reserved his sharpest criticism for summing up the young Labor senator’s predicament: “Sam Dastyari has made an imbecile of himself by appearing to offer China support in its spurious South China Sea claims, at the same time as receiving money for uncertain purposes from Beijing connected groups.”
Several of Dastyari’s Labor colleagues are perplexed at what they regard as his lapse of judgment in accepting Chinese cash.
“It was pretty stupid,” one senior figure tells Inquirer. “Why not just pay the money himself? He’s not just a hyperactive backbencher any more — he’s a frontbencher as shadow minister for consumer affairs and manager of opposition business in the Senate. So he’s an obvious target for the Liberals.”
Another Labor insider questioned the mentality not only of Dastyari but others in politics who might be affected by a “sense of entitlement”. He asked: “Why did he have to do that? Does he have a hefty mortgage?”
The broader problem, as many in Labor concede, is the extraordinary amount of money flooding into Australia from China as donations for all major political parties. On this score, Dastyari is not removed from the equation, either. He was general-secretary of the NSW Labor Party from 2010 to 2013 before entering the Senate. The Australian yesterday tabulated figures showing how the Liberals and Nationals had benefited, like Labor, from Chinese donations. But it also showed that Labor received vastly more. Top Education Institute, the same company that paid Dastyari’s $1640 excess parliamentary travel bills, donated $252,000 to the ALP in 28 separate payments between 2010 and last year. For much of this time, Dastyari was the man in charge of the NSW party machine. So the Top Education Institute’s historical link to the ALP, and Dastyari, runs much deeper than pocket money for last year’s excess travel bills that the Labor senator didn’t want to pay himself.
The best way to reform the system, say some of Dastyari’s own supporters, would be to restrict political donations to all parties by allowing contributions from individuals only. All foreign donations would be banned. In the short term, the ALP could suffer most because it would lose foreign donations (which totalled $3.8 million between 2013 and last year), but also miss out on funding from its organisational base, the unions. In the longer term, the system could even out. The Liberal-National parties, for example, could not receive foreign money or local corporate money.
Dastyari is not the first Labor MP to become entangled with Chinese “soft power” interests. Indeed the fact one of his senior Labor parliamentary colleagues managed to survive and remains an influential figure on Shorten’s team gives Dastyari some hope of beating off the calls of Bernardi and Attorney-General George Brandis for him to step down.
In 2009, Joel Fitzgibbon, then defence minister in the Rudd government, attracted considerable flak because of his relationship with Helen Liu, a businesswoman believed to have links with Chinese military intelligence. Liu paid for several Fitzgibbon trips to China that were not declared. There were also concerns raised about Fitzgibbon living in a Canberra house, when parliament was sitting, that was owned by a woman with links to the People’s Liberation Army.
Fitzgibbon resigned as defence minister several months later — but his exit was related to an admission that he breached the ministerial code of conduct on an entirely different matter: that his brother, as head of the health insurance firm NIB, was permitted to have discussions with defence officials and a US health company that also involved members of Fitzgibbon’s staff.
Fitzgibbon lived to fight another day: he became chief government whip and briefly Labor’s agriculture minister. He was one of Labor’s stronger performers during the recent election campaign as shadow agriculture minister, and is now Labor’s spokesman on rural and regional affairs.
Like Fitzgibbon, Dastyari has a good survival instinct — but his fate rests on whether the Chinese donations controversy dies down or keeps going if there are more revelations.
One of the difficulties for Dastyari could be to maintain the rage, with credibility, and as much vigour, on the issues that have thrust him to prominence as a senator.
He has blasted the power of big companies. He has accused the banks of unethical behaviour. After his election to the Senate, Dastyari accused financial institutions in Australia of bankrolling “a handful of crooks, criminals and conmen” who had pushed financial products on consumers that the banks knew were not good ones. He also has criticised banks for offering poor advice, branding them reckless: “They might try to again blame a few rogue elements, but this goes all the way to the top.”
It surprises some Dastyari supporters that he now finds himself in such trouble given his intelligence and street smarts. Emigrating from Iran in 1988 with his parents at the age of 4, Dastyari grew up in western Sydney in modest financial circumstances.
He performed well at school, sufficient to be accepted into medicine at the University of Sydney. He instead chose law but dropped out after becoming too immersed in Labor Club politics and becoming president of Young Labor. He later restarted his studies and graduated with a political science degree from Macquarie University.
Dastyari quickly rose inside Labor’s NSW machine — from party organiser to assistant secretary to general secretary. In that position he was well regarded. He was just 27. While party predecessors such as Eric Roozendaal and Mark Arbib attracted donations from the big end of town, Dastyari tried another tack of constant campaigning in which he sought $5 contributions from individuals, en masse. He tried to involve donors in the party, too. Corporate donations, including those from foreign interests, came on top.
Dastyari was deeply involved in the two leadership coups of recent Labor history, first in toppling Kevin Rudd as prime minister, and then Julia Gillard. His flair for the dramatic was evident in his willingness to re-enact his role for the shooting of the ABC’s Killing Season. That performance drew some guffaws from within Labor and questions about his judgment.
Dastyari was also deeply involved in Labor’s tribulations over former Labor MP Craig Thomson after the 2010 election. With Gillard relying on Thomson’s one vote to cling to office, it was Dastyari’s job to make sure the wayward MP was not declared bankrupt during costly legal proceedings as he sued Fairfax Media over allegations he had used union money for prostitutes. Dastyari took a purely pragmatic position, using ALP branch funds to pay Fairfax $240,000 and keep Thomson financially afloat when he ultimately withdrew his action against the media company. He paid another $100,000 of ALP funds to cover legal costs.
When Shorten ran for the leadership in 2013, Dastyari was his campaign manager. As Shorten faltered late last year, it seemed the Labor senator was swinging his support behind Chris Bowen or even Anthony Albanese.
But he was on Shorten’s campaign bus during the campaign, whispering wisdom that possibly helped Labor do better than expected. On election night, Dastyari caused a stir by offering Pauline Hanson a halal snack-pack to help overcome her misgivings about things Islam.
Dastyari, who calls himself a non-practising Muslim and likes a beer, has a knack for attracting media attention. He is often praised for his energy and is regarded as an expert networker. Until now, he has been Senator Everywhere. He was even at the side of NSW Opposition Leader Luke Foley when he went against the grain, siding with greyhound owners and opposing a statewide ban on the industry.
The chatty Labor senator is now silent, ducking media inquiries. It may pay to keep a low profile for a while.
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