The report of the NSW Independent Commission Against Corruption (ICAC) on the saga of the $100,000 donation from Chinese billionaire Huang Xiangmo to NSW Labor in 2015, and the attempts by Labor politician Ernest Wong to cover it up, often reads like bad comedy. There are bags and wine boxes full of money, cars doing laps of the Domain, clumsy suborning of witnesses, comically evasive suspects, wildly clashing testimonies, panicked officials and cameos by senior politicians.
But the scandal claimed a life, that of Quanbao Liao, who took his own life rather than be questioned by the NSW ICAC about his role — relatively minor, in the scheme of things — in hiding the origin of the donation. And Huang was intent on using political donations to get as close to power as he possibly could.
Despite the epic ICAC report, the story is relatively straightforward. ICAC found that Huang attended a March 2015 dinner organised by the Chinese Friends of Labor under the auspices of Labor MLC Ernest Wong in Sydney — also attended by then-federal opposition leader Bill Shorten and then-NSW opposition leader Luke Foley as well as shadow state and federal ministers — and later donated $100,000 to NSW Labor, provided in a bag to then-NSW Labor secretary Jamie Clements. As Huang was a prohibited donor under NSW laws — because, Wong believed, he was a property developer as head of the Yuhu property group — Wong arranged to have the origins of the money covered up using false donation declarations prepared for the occasion.
The NSW Electoral Commission — suspicious of how a number of the low-profile people pressed into service by Wong could afford a $10,000 donation each — investigated them, and referred the matter to ICAC. Wong’s plan began to fall apart, and according to ICAC he tried to convince the “donors” to give false evidence. ICAC, having found Wong engaged in serious corrupt conduct, has referred him to the NSW director of public prosecutions for multiple alleged offences — along with Huang Xiangmo and a number of others.
To add to the comic dimension, it turns out Huang wasn’t a property developer under the strict definitions of NSW donation laws, so the entire scheme was undertaken under a misapprehension. But, ICAC found, Huang’s donation was still illegal because he wasn’t on the electoral roll.
Huang Xiangmo was more than a property developer, however — he led a major Chinese Communist “united front” propaganda outfit, the Australian Council for the Promotion for the Peaceful Reunification of China. Huang is now banned from Australia. His close relationship with now-former Labor senator and NSW party secretary Sam Dastyari led to Dastyari quitting politics. Dastyari had a bit role in the Wong saga as well, having been consulted by a panicked party secretary, Kaila Murnane, after Wong told her Huang had made the donation and its origins had been hidden.
Huang was a generous man. In the course of the ICAC hearings, we learnt that he and Murnane’s predecessor, Clements, had grown so close that Huang would hand tens of thousands of dollars to him both for political and personal use — at one stage taking Clements upstairs at his Mosman home and giving him a wine box with $35,000 in it, “for your legal fees”, in cash direct from the Star casino. Clements arranged a meeting between Bill Shorten and Huang during this period. After Clements resigned as NSW ALP secretary in 2016, Huang put him on a $200,000 a year retainer. Coincidentally, the MLC that Wong replaced, Eric Roozendaal, had also been employed by Huang.
Huang was also a generous donor to the Coalition, it should be remembered. Just as he is pictured with Bill Shorten at the head table at the March 2015 dinner, he was pictured at events with then-Liberal leaders like Malcolm Turnbull and Gladys Berejiklian.
The ICAC report devotes its final chapter to the policy implications of what Clements agreed was the use of donations to gain influence and access to key party figures. Clement’s “inappropriate” (ICAC’s word) relationship with Huang created the possibility of “influence future government policy and decisions, in addition to the immediate access to senior NSW Labor figures that he was granted”.
ICAC makes some piquant observations about political funding laws across the country — particularly that “electoral funding systems are becoming more divergent than harmonised… The channelling of donations through different jurisdictions is a way of circumventing the intent of the rules in NSW. As a result, tracking the flow of money — and influence — from donors to campaigners to election expenditure is exceedingly complex.”
And, importantly, ICAC argues the federal donation laws actually work to undermine NSW laws:
a property developer looking to influence a political party can donate $14,499 at the federal level to be used for “federal purposes” and it need not be disclosed. By law, money for federal purposes must be kept in separate bank accounts; for example, one to be specifically used for “other/general purposes”. In practice, money from the “other/general purposes” account could be allocated for state purposes without being identified in any NSW audit.
Dasytari himself pointed this out to the inquiry:
…to me what’s incomprehensible about this entire enquiry, to be honest, is that, is if the series of events that have been purported are true, they could have just accepted the money into the federal campaign account, which is what, how you normally take money from prohibited donors or people above the limits. The federal rules allow you to take that money.
Dastyari knows what he’s talking about more than most politicians. He’s been in the room, he’s done the deals, he’s handled donations. He knows “how you normally take money from prohibited donors or people above the limits. The federal rules allow you to take that money”.
The report makes a number of excellent recommendations about improvements to NSW donation laws and imposing better governance on large political parties. But ultimately there’s no way around the fundamental problem. Federal political funding laws undermine the rules of jurisdictions like NSW and Queensland that have tried to improve transparency and curb the efforts of the likes of Huang — and hundreds of smaller domestic versions of him — trying to buy access and influence.
