Political donations – allegations concerning ALP NSW branch officials, Chinese Friends of Labor and others (Operation Aero)

Year: 2022 Status: Completed

The ICAC investigated whether, from January 2015, Australian Labor Party (ALP) NSW Branch officials, members of Chinese Friends of Labor, political donors and others had entered into, or carried out, a scheme to circumvent prohibitions or requirements under Part 6 of the Election Funding, Expenditure and Disclosures Act 1981 relating to political donations.

In its report on the investigation, made public on 28 February 2022, the Commission makes findings of serious corrupt conduct against Ernest Wong, a former member of the NSW Legislative Council.

The ICAC is of the opinion that the advice of the Director of Public Prosecutions should be obtained with respect to the prosecution of Ernest Wong, Xiangmo Huang, Jonathan Yee, Kenrick Cheah, Valentine Yee, May Ho Yee, Emperor’s Garden Pty Ltd, Lei Mo, Patricia Siu, Teresa Tam, Ming Tam, Wei Shi, Johnnie Lin, To Yip, Harbour City Group Pty Ltd, Steve Tong, Alex Wood and Maggie Wang for various offences.

The Commission has made seven recommendations to assist the NSW Government to strengthen the laws, policies and procedures concerning political donations in NSW.

 

Findings of corrupt conduct

The Commission found that Ernest Wong engaged in serious corrupt conduct by using the privileges to which he was entitled as a member of the Legislative Council:

  • between about February 2015 and at least September 2018, in the course of carrying out a scheme for the purpose of circumventing the requirement of the Election Funding, Expenditure and Disclosures Act 1981 to the effect that the true source of a “reportable political donation” received or made must be disclosed to the NSW Electoral Commission; and

  • •on 17 September 2018, at a meeting with Steve Tong in Mr Wong’s Parliament House office, during the course of which Mr Wong attempted to procure Mr Tong to give false testimony to such investigative authorities as may make enquiries of him in relation to the question of whether he had made a donation in connection with the Chinese Friends of Labor dinner held on 12 March 2015.

Recommendations for prosecutions

Download the Operation Aero recommendations for prosecutions (pdf)

Recommendations for disciplinary action

The Commission does not make any recommendations for disciplinary action in this matter.

Policy recommendations

The Commission conducted a review of policy issues identified in the course of this investigation. The Commission makes the following seven recommendations to assist the NSW Government to strengthen the laws, policies and procedures concerning political donations in NSW.

Recommendation 1

That the NSW Government amends the Electoral Funding Regulation 2018 to provide for the NSWEC to issue penalty notices for less severe breaches of the prohibition on cash donations under s 50A of the Electoral Funding Act 2018.

Recommendation 2

That the NSW Government, in consultation with affected parties, initiates an amendment to the Electoral Funding Act 2018 so that payments from the Administration Fund are contingent on the achievement of acceptable standards of party governance and internal control. A working group should be established to determine the relevant governance and control standards, which could relate to:

  • accounting for, receipting and banking donations
  • the organisation of fundraising events
  • identifying prohibited donors and donations that
  • exceed statutory caps
  • the roles and responsibilities of staff, including volunteers
  • risk management and internal audit
  • whistleblowing and complaint-handling
  • management of gifts and conflicts of interest
  • compliance and ethical obligations of senior party officials.

Recommendation 3

That the newly established working group should seek input from the NSWEC to ensure the efficient administration and implementation of standards. That is, consideration should be given to:

  • applicable minimum standards
  • whether the standards should take the form of model rules, which an individual party would be free to modify only if the NSWEC agreed that the modified rule did not adversely affect the party’s governance. This would prevent small, or new, parties from incurring the expense of drafting rules from scratch
  • the limits on the type of standards that could be required. That is, in order to avoid topics and areas that the state has no legitimate interest in regulating (for example, the way a political party formulates its policies)
  • the desirability, or extent to which, the standards take the form of specific rules, so as to meet the reasonable satisfaction of the NSWEC
  • the need for a proportionate approach that does not unreasonably penalise small, new political parties or independents
  • providing political parties with reasonable opportunities to address shortcomings in their governance and internal control frameworks before administration funding is withheld.

Recommendation 4

That the NSW Government amends the Electoral Funding Act 2018 to provide the NSWEC with the necessary powers to assess, audit and enforce non-compliance with standards of party governance and internal control.

Recommendation 5

That the NSW Government amends the Electoral Funding Act 2018 to require the NSWEC to publish findings regarding political parties’ adherence to established governance and controls standards.

Recommendation 6

That the NSW Government, in consultation with the NSWEC, gives consideration to:

a) amending section 100(1) of the Electoral Funding Act 2018 to require senior office holders of political parties to report reasonably suspected contraventions of the Act

b) increasing penalties associated with the offence under section 100(1) of the Electoral Funding Act 2018 to bring it into line with the penalties set out in sections 141 to 146 of the Act.

Recommendation 7

That the NSW Government amends the Electoral Funding Act 2018 to give the NSWEC power to publish the results of its compliance audits, investigations and regulatory actions.

Media Releases

ICAC finds former MLC Ernest Wong corrupt, Huang Xiangmo true source of $100,000 cash donation to NSW Labor & Country Labor

28 Feb 2022

The NSW ICAC has found that former NSW MLC Ernest Wong engaged in serious corrupt conduct by misusing the privileges to which he was entitled as a member of the Legislative Council in relation to a scheme to circumvent electoral funding laws and by attempting to procure a witness to give false testimony.

MEDIA ALERT: Operation Aero public inquiry into allegations concerning political donations resumes Monday 9 December

6 Dec 2019

The NSW Independent Commission Against Corruption’s (ICAC) public inquiry into allegations concerning political donations, the NSW Branch of the Australian Labor Party (ALP), members of Chinese Friends of Labor and others will resume on Monday, 9 December 2019 at 12:00 pm for one week.

MEDIA ALERT: Public inquiry into allegations concerning political donations starts Monday

23 Aug 2019

The NSW Independent Commission Against Corruption’s (ICAC) public inquiry into allegations concerning political donations, the NSW Branch of the Australian Labor Party (ALP), members of Chinese Friends of Labor and others will start next Monday, 26 August 2019 at 10:00 am.

Public inquiry into allegations concerning political donations

31 Jul 2019

The ICAC will hold a public inquiry starting Monday 26 August 2019 as part of an investigation it is conducting into allegations concerning political donations, the NSW Branch of the Australian Labor Party (ALP), members of Chinese Friends of Labor and others.

Witness Transcripts

View all transcripts associated with this investigation. The Commission makes every effort to post the daily transcripts of its public inquiries on its website by 8:00 pm each day when possible. If the Commission sits later than 4:00 pm, the daily transcripts, particularly the afternoon session, may not be available until the next working day.

 

Filename Date pp. Time
12-12-2019 Transcript 12/12/19 02882-002934 02.30pm to 4.42pm
12-12-2019 Transcript 12/12/19 02826-02881 11.00am to 1.09pm
11-12-2019 Transcript 11/12/19 02775-02825 2.00pm to 4.07pm
11-12-2019 Transcript 11/12/19 02720-02774 10.15am to 12.44pm
10-12-2019 Transcript 10/12/19 02681-02719 2.10pm to 4.31pm
10-12-2019 Transcript 10/12/19 02623-02680 10.00am to 1.07pm
09-12-2019 Transcript 09/12/19 02609-02622 2.00pm to 2.45pm
09-12-2019 Transcript 09/12/19 02581-02608 12.00pm to 1.06pm
14-10-2019 Transcript 14/10/19 02573-02580 3.00pm to 3.27pm
11-10-2019 Transcript 11/10/19 02522-02572 10.00am to 12.42pm
10-10-2019 Transcript 10/10/19 02456-02521 2.00pm to 4.36pm
10-10-2019 Transcript 10/10/19 2406-2455 10.48am to 1.03pm
09-10-2019 Transcript 09/10/19 2392-2405 5.25pm to 6.16pm
09-10-2019 Transcript 09/10/19 02313-02391 2.00pm to 4.59pm
09-10-2019 Transcript 09/10/19 02253-02312 10.00am to 12.59pm
08-10-2019 Transcript 08/10/19 2211-2252 2.00pm to 3.52pm
08-10-2019 Transcript 08/10/19 02149-02210 10.30am to 1.03pm
04-10-2019 Transcript 04/10/19 02111-02148 2.00pm to 3.41pm
04-10-2019 Transcript 04/10/19 02082-02110 10.30am to 1.03pm
03-10-2019 Transcript 03/10/19 02065-02081 2.00pm to 3.19pm
03-10-2019 Transcript 03/10/19 02035-02064 10.00am to 1.03pm
02-10-2019 Transcript 02/10/19 01997-02034 10.00am to 12.53pm
01-10-2019 Transcript 01/10/19 01960-01996 2.00pm to 3.51pm
01-10-2019 Transcript 01/10/19 01903-01959 10.00am to 1.12pm
30-09-2019 Transcript 30/09/19 01857-01902 2.00pm to 4.10pm
30-09-2019 Transcript 30/09/19 01801-01856 10.30am to 12.59pm
27-09-2019 Transcript 27/09/19 01752-01800 2.00pm to 4.08pm
27-09-2019 Transcript 27/09/19 01697-01751 10.00am to 1.05pm
26-09-2019 Transcript 26/09/19 01657-01696 2.00pm to 4.08pm
26-09-2019 Transcript 26/09/19 01600-01656 10.00am to 1.07pm
25-09-2019 Transcript 25/09/19 01549-01599 10.00am to 12.55pm
24-09-2019 Transcript 24/09/19 01524-01548 2.20pm to 3.54pm
24-09-2019 Transcript 24/09/19 01485-01523 10.15am to 1.21pm
20-09-2019 Transcript 20/09/19 01470-01484 2.25pm to 3.12pm
20-09-2019 Transcript 20/09/19 01423-01469 10.30am to 1.43pm
19-09-2019 Transcript 19/09/19 01391-01422 2.15pm to 4.35pm
19-09-2019 Transcript 19/09/19 01331-01390 10.00am to 1.24pm
18-09-2019 Transcript 18/09/19 01294-01330 2.00pm to 4.05pm
18-09-2019 Transcript 18/09/19 01243-01293 10.00am to 1.03pm
17-09-2019 Transcript 17/09/19 01219-01242 2.00pm to 4.04pm
17-09-2019 Transcript 17/09/19 01188-01218 10.00am to 12.52pm
16-09-2019 Transcript 16/09/19 01113-01167 10.00am to 12.55pm
12-09-2019 Transcript 12/09/19 01062-01098 2.00pm to 4.03pm
12-09-2019 Transcript 12/09/19 00997-01061 10.00am to 1.00pm
11-09-2019 Transcript 11/09/19 00978-00996 2.30pm to 4.25pm
11-09-2019 Transcript 11/09/19 00951-00977 10.00am to 1.20pm
10-09-2019 Transcript 10/09/19 00919-00950 2.00pm to 3.18pm
10-09-2019 Transcript 10/09/19 00895-00918 10.00am to 12.15pm
09-09-2019 Transcript 09/09/19 00878-00894 1.30pm to 2.12pm
09-09-2019 Transcript 09/09/19 00835-00877 10.00am to 12.30pm
06-09-2019 Transcript 06/09/19 00819-00834 2.00pm to 2.46pm
06-09-2019 Transcript 06/09/19 00762-00818 10.00am to 1.00pm
05-09-2019 Transcript 05/09/19 00710-00761 1.50pm to 4.07pm
05-09-2019 Transcript 05/09/19 00674-00709 10.15am to 12.48pm
04-09-2019 Transcript 04/09/19 00650-00673 2.05pm to 4.19pm
04-09-2019 Transcript 04/09/19 00606-00649 10.00am to 1.04pm
03-09-2019 Transcript 03/09/19 00563-00605 2.00pm to 3.52pm
03-09-2019 Transcript 03/09/19 00509-00562 10.00am to 1.02pm
02-09-2019 Transcript 02/09/19 00461-00508 2.15pm to 4.01pm
02-09-2019 Transcript 02/09/19 00392-00460 10.00am to 1.08pm
30-08-2019 Transcript 30/08/19 00341-00391 10.00am to 11.57am
29-08-2019 Transcript 29/08/19 00300-00340 2.00pm to 4.07pm
29-08-2019 Transcript 29/08/19 00250-00299 10.00am to 12.43pm
28-08-2019 Transcript 28/08/19 00202-00249 2.00pm to 4.23pm
28-08-2019 Transcript 28/08/19 00172-00201 10.00am to 12.54pm
27-08-2019 Transcript 27/08/19 00150-00171 2.00pm to 3.06pm
27-08-2019 Transcript 27/08/19 00106-00149 10.00am to 12.30pm
26-08-2019 Transcript 26/08/19 00059-00105 2.00pm to 4.07pm
26-08-2019 Transcript 26/08/19 00001-00058 10.00am to 12.45pm
26-08-2019 Aero - Opening Statement 26/08/19 10:00am
Exhibits

The document uploaded on 9 September 2019 to the public website and described as Exhibit 218 has since been removed and the contents are subject to a non-publication order under section 112 of the Independent Commission Against Corruption Act 1988.

Public notices