ICAC finds former MLC Ernest Wong corrupt, Huang Xiangmo true source of $100,000 cash donation to NSW Labor & Country Labor
Monday 28 February 2022
The NSW Independent Commission Against Corruption (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.
In a report released today, Investigation into political donations facilitated by Chinese Friends of Labor in 2015 (Operation Aero), the Commission found that Mr Wong misused those privileges in two ways: by participating in a scheme to circumvent electoral funding laws that required the true source of a “reportable political donation” be disclosed to the NSW Electoral Commission (NSWEC); and when he met with Steve Tong in his office at Parliament House on 17 September 2018 and attempted to procure Mr Tong to give false testimony to investigating authorities in relation to whether or not Mr Tong had made a donation in connection with a 2015 Chinese Friends of Labor (CFOL) fundraising dinner.
The Commission found that the true source of the $100,000 cash donation, delivered to the NSW Labor head office on 7 April 2015, was businessman, Huang Xiangmo.
The Operation Aero investigation was brought about following a referral from NSWEC in January 2018 as to whether, from January 2015, officials of the NSW Branch of the Australian Labor Party (NSW Labor), members of CFOL, 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 (the EFED Act) relating to political donations.
The investigation examined an alleged unlawful scheme to secure for NSW Labor and Country Labor a $100,000 cash donation received in connection with a fundraising dinner held in the lead up to the 2015 NSW State Election. It also examined whether individuals involved in the alleged scheme conspired to give false evidence in attempts to prevent the NSWEC and the ICAC from exposing that scheme.
The investigation focused on a CFOL dinner held on 12 March 2015 (the 2015 CFOL dinner), at The Eight Modern Chinese Restaurant in Haymarket, to raise money for the Labor Party’s campaign for the NSW state election to be held on 28 March that year. Mr Wong and Jonathan Yee, who with his family owned a restaurant business, The Emperor’s Garden Pty Ltd, entered into an agreement where Mr Yee would procure “five to 10 people” to sign forms falsely stating that they had each donated $5,000 in connection with the 2015 CFOL dinner. The aim was to conceal the true source of donations that Mr Wong had arranged, or was intending to arrange. Forms were procured from those people, which falsely stated they had each donated sums of $5,000, the applicable cap under the EFED Act. Some of those people were then put forward by the orchestrators of the scheme as having donated two sums of $5,000, to each of NSW Labor and Country Labor, which were registered as separate political parties at the time, each entitled to receive political donations.
There were various components to the scheme, but the result was that 12 “putative” donors – 10 of whom were associated with the Emperor’s Garden restaurant, including staff, members of the Yee family and a neighbouring business, Harbour City Group Pty Ltd (operated by To Yip) – falsely signed declarations at the behest of Mr Wong and Mr Yee that they had donated cash which totalled $100,000. Two of the putative donors, Steve Tong and Quanbao Liao, were employed by Wu International Investments Pty Ltd. Mr Liao died the day before he was due to attend a compulsory examination before the Commission in June 2018.
The Commission found Mr Huang was the true source of the donation, and that the money came from his “junket account” at The Star Sydney casino, after it was withdrawn by Wun Chi Wong, a junket operator who was employed by Mr Huang. It was unlawful for NSW Labor and Country Labor to accept the $100,000 cash from Mr Huang because the donation exceeded the applicable $5,000 cap on political donations. Furthermore, as Mr Huang was not enrolled on the Electoral Roll at the relevant time, he was not a person from whom political donations could be accepted.
Mr Huang was the Chairman and a director of Yuhu Group Australia Pty Ltd. The Commission found that while there was little doubt that Mr Huang was a property developer in the ordinary sense of the term at the relevant time, the available evidence did not demonstrate that Mr Huang was a “close associate” of a corporation falling within the statutory definition of “property developer” in section 96GB(1)(a) of the EFED Act. Both Mr Huang and Wun Chi Wong were overseas during the public inquiry and declined to give evidence, either in person or via video link. Mr Huang was legally represented throughout the public inquiry.
The Commission found that Mr Wong believed Mr Huang to be a “prohibited donor” and knew he was the true source of the $100k cash at the time that Mr Wong and Jonathan Yee procured the donor declaration forms from each of the 12 putative donors. Mr Wong also told the putative donors, who were to give evidence at the ICAC in the lead up to the Commission’s public inquiry that started in August 2019, to keep telling falsehoods that they had previously told the NSWEC investigation and at ICAC compulsory examinations when they came to give evidence. The putative donors who gave evidence did eventually admit to the Commission that they had not been the source of the donations.
This investigation also exposed a number of governance failures within NSW Labor and Country Labor. The Commission has made seven recommendations to assist the NSW Government to strengthen the laws, policies and procedures concerning political donations in NSW, with particular focus on: cash donations; the governance arrangements of registered political parties; penalties and sanctions that failed to act as an effective deterrent against non-compliance with electoral funding laws; and public statements regarding the NSWEC’s compliance activities.
The Commission seeks the advice of the Director of Public Prosecutions (DPP) on whether any prosecution should be commenced. The DPP determines whether any criminal charges can be laid, and conducts all prosecutions. The Commission is of the opinion that consideration should be given to obtaining the advice of the DPP with respect to the prosecution of Mr Wong, Mr 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, Mr Tong, Alex Wood and Maggie Wang for various offences.
The Commission’s public inquiry was held over 37 hearing days from 26 August to 12 December 2019. Chief Commissioner the Hon Peter Hall QC presided at the public inquiry, at which evidence was taken from 27 witnesses.