The backroom player at the heart of the Zali Steggall donations affair

Warringah MP Zali Steggall’s former accountant charged several independent candidates $30,000 each to set up their financial structures while simultaneously acting as a director of the fundraising group that was bankrolling their campaigns.

Damien Hodgkinson is the founding director and sole shareholder of Climate 200 — a group convened by Simon Holmes a Court to support independent candidates at the federal election — as well as the creator of the financial vehicles that funded independent campaigns in Wentworth, Warringah, Kooyong and Flinders.

Damien Hodgkinson was Warringah MP Zali Steggall’s financial controller when she failed to correctly declare a $100,000 donation.

He has been blamed for incorrectly recording a $100,000 donation from coal investor John Kinghorn to Ms Steggall’s 2019 campaign, and has not responded to emails and phone calls.

Climate 200 said in a statement that there was no conflict with Mr Hodgkinson acting as a director of the fundraising body while also charging candidates for his services. The fact that Mr Hodgkinson was a supplier of services was disclosed to donors on the website, the statement said. The Herald does not suggest otherwise.

Mr Hodgkinson’s financial structures for each candidate involve the establishment of a public company, with a board of directors, to process and keep track of campaign money — a model that he prototyped in 2018 when celebrity doctor Kerryn Phelps ran for the blue ribbon seat of Wentworth.

Dr Phelps had originally planned to run for the office of Sydney Lord Mayor and, according to two sources close to the campaign, Mr Hodgkinson was going to be on her ticket.

Member for Warringah Zali Steggall.Credit: Allex Ellinghausen

But when Malcolm Turnbull was ousted as Prime Minister and resigned as the member for Wentworth, Dr Phelps decided to run as an independent at the byelection instead, and Mr Hodgkinson put aside his political ambitions to manage the financial side of her campaign.

He was running the change management company DEM Asia at the time, and had been treasurer of the Sydney Gay and Lesbian Mardi Gras, helping to bring the organisation back into surplus when it was near collapse.

Dr Phelps said the template had been put in place under immense time pressure and with none of the resources afforded to candidates from the major political parties, and its main aim was to monitor the money coming in and going out and ensure compliance with reporting rules.

“The issue of political donation reform wasn’t even on our radar at the time,” Dr Phelps said.

“What we were trying to do was to make sure we had a structure that made reporting and compliance straightforward, transparent and efficient. We had to keep within the rules.

“Independent candidates have to disclose every donation and expense related to their campaigns. Individual party members do not. Nobody will ever know how much was raised or spent on the 2019 campaigns in the electorates, for example, of Dave Sharma or Tony Abbott or Josh Frydenberg.”

Dr Phelps went on to win Wentworth, and Mr Hodgkinson recognised a business opportunity.

“We sat down and said, ‘Look, this is a gap in the market’,” Mr Hodgkinson told the Saturday Paper in 2019, in an interview that confirmed his $30,000 fee.

“You had a lot of independents who were interested in running but had no idea how to do it. And you had a group of concerned citizens ... saying, ‘We want change’.”

In the 2019 elections, he advised eight independent candidates, including Julia Banks in Flinders, Oliver Yates in Kooyong, Dr Phelps in Wentworth and Ms Steggall in Warringah and Anthony Pesec in the senate.

The assault on Liberal heartland prompted the NSW and Victorian divisions of the party to ask the Australian Electoral Commission (AEC) to investigate whether the near-identical structures used by the independents indicated that they were operating as a single party and circumventing donation laws, but the AEC made no adverse findings.

In April of that year, Mr Hodgkinson also set up Climate 200, which distributed about $450,000 in donations to 12 independents, including Ms Banks, Mr Yates and Dr Phelps. It is aiming to raise $15 to 20 million before the coming election, to be distributed among 10 to 12 candidates.

The candidates use the money to spend on their campaigns. Climate 200 said in their statement that it had not specifically provided money to any campaigns to cover Mr Hodgkinson’s fees.

Richard Beck, a director of Warringah Independents, the campaign vehicle for Ms Steggall, said the board had worked closely with the AEC over questions it had relating to donations and provision of services. “All this had been resolved to the AEC’s satisfaction and they have accepted our amended return,” he said.

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