ICAC finds former premier and then member for Wagga Wagga corrupt
Thursday 29 June 2023
The NSW Independent Commission Against Corruption (ICAC) has found that the former premier of NSW, Gladys Berejiklian, and the former member of Parliament for Wagga Wagga, Daryl Maguire, have engaged in serious corrupt conduct.
In its report released today, Investigation into the conduct of the then member of Parliament for Wagga Wagga and then premier and others (Operation Keppel), the Commission finds that, between 2012 and August 2018, Mr Maguire improperly used his office, and the resources to which he had access as a member of Parliament (MP), to benefit G8wayInternational Pty Ltd, a company of which he was in substance a director, and whose profits he had an arrangement to share with others. Mr Maguire also failed to disclose his interest and position in G8wayInternational and/or all the sources of his income, as he was required to do under the Constitution (Disclosure by Members) Regulation 1983.
He also misused his role as an MP to advance his own financial interests, as well as the commercial interests of his associates, in connection with an immigration scheme that he promoted to his constituents and others connected with his electoral district. Also, as an MP and chair of the NSW Parliament Asia Pacific Friendship Group, Mr Maguire misused those roles to advance his own financial interests and the commercial interests of his associates. Other misuse of his office as an MP included attempting to advance his own private financial interests and/or those of people associated with him in connection with the sale and/or development of land in NSW.
Mr Maguire was an enthusiastic advocate for grants of public monies for the Australian Clay Target Association (ACTA), and the Riverina Conservatorium of Music (“the RCM”), two Wagga Wagga-based institutions. Ms Berejiklian had presided over and/or been a member of the Expenditure Review Committee (ERC) meetings that had approved the grants, which comprised $5.5 million for ACTA and $10 million for refurbishing and repurposing a new government-owned site to make it fit-for-purpose for the RCM (RCM Stage 1). At the same time, Mr Maguire and Ms Berejiklian were in an undisclosed close personal relationship.
The Commission finds that Ms Berejiklian engaged in serious corrupt conduct by breaching public trust in 2016 and 2017 through exercising her official functions in relation to funding promised and/or awarded to ACTA, without disclosing her close personal relationship with Mr Maguire, when she was in a position of a conflict of interest between her public duty and her private interest, which could objectively have the potential to influence the performance of her public duty. The Commission also finds that in the same period, Ms Berejiklian partially exercised her official functions, in connection with funding promised to ACTA, influenced by the existence of her close personal relationship with Mr Maguire.
The Commission finds that Ms Berejiklian took a number of actions in relation to the ACTA proposal in circumstances where she knew that Mr Maguire was its principal proponent. These included, when she was treasurer, causing the proposal to be included on the agenda and supporting it at the ERC meeting on 14 December 2016 and when she was premier, causing steps to be taken by staff from her office to follow up on the progress of the ACTA proposal following the ERC ACTA decision. This included by communicating a request that the initial benefit–cost ratio (BCR) calculation of 0.88, by the Department of Premier and Cabinet Investment Appraisal Unit, be revisited. This ultimately led to it achieving a BCR satisfactory for Infrastructure NSW to approve its funding.
In 2018, Ms Berejiklian also partially exercised her official functions, influenced by the existence of her close personal relationship with Mr Maguire, or by a desire on her part to maintain or advance that relationship, in connection with funding promised and awarded to a proposal to build a recital hall for the RCM (RCM Stage 2). The Commission finds that she breached public trust by exercising her official functions in relation to decisions concerning the RCM proposal which she knew was advanced by Mr Maguire.
Her conduct regarding the RCM proposals included participating in decisions at ERC meetings in April 2018 about the RCM proposal Stage 1 to transfer land for the conservatorium, and in relation to the funding granted to the RCM, without declaring a conflict of interest as required by the NSW Ministerial Code of Conduct (“the ministerial code”). Ms Berejiklian also determined to make a $20–million funding reservation for Stage 2 of the proposal, and approved the letter arranging for that funding reservation to be made, without disclosing her close personal relationship with Mr Maguire. This meant the reserved funds, which entailed a significant sum of public monies, could not be spent on other projects until they were released.
This was at a time when she was in a position of a conflict of interest between her public duty and her private interest in maintaining or advancing her close personal relationship with Mr Maguire, which could objectively have had the potential to influence the performance of her public duty. Ms Berejiklian submitted to the Commission that, as premier, the ministerial code did not apply to her. The Commission rejects that submission, and finds that Ms Berejiklian substantially breached the ministerial code by failing in her duty to act honestly and in the public interest in her conduct regarding the RCM proposal. The Commission further rejects Ms Berejiklian’s submission that her close personal relationship with Mr Maguire could not amount to a private interest under the ministerial code.
The Commission also finds that Ms Berejiklian engaged in serious corrupt conduct by refusing to discharge her duty under section 11 of the ICAC Act to notify the Commission of her suspicion that Mr Maguire had engaged in activities which concerned, or might have concerned, corrupt conduct. At the time Ms Berejiklian failed to report her suspicions to the Commission, she was the premier of the state. The report notes that Ms Berejiklian must have known that she was not entitled to refuse to exercise her official functions for her own private benefit, or for the benefit of Mr Maguire. To do so to conceal conduct she suspected concerned, or have might concerned, corrupt conduct on the part of Mr Maguire, another member of Parliament, both to protect herself and him from the Commission exercising its investigative powers was grave misconduct. It undermined the high standards of probity that are sought to be achieved by the ministerial code which, as premier, Ms Berejiklian substantially administered.
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 about the prosecution of Mr Maguire, G8wayInternational director Phillip Elliott and Maggie Wang, an associate of Mr Maguire, for various offences. The Commission is not of the opinion that consideration should be given to obtaining the advice of the DPP with respect to the prosecution of Ms Berejiklian for any offence.
The Commission notes that due to the failure to promptly report suspected corrupt conduct identified in Operation Keppel, the investigation was initiated through the work of ICAC officers. This made it necessary for the Commission to exercise all of its coercive powers as the different layers of the investigation were discovered. Earlier reporting of suspected corruption could have prevented aspects of the conduct and shortened what became a complex, multi-stage investigation.
The Commission has made 18 recommendations addressing the codes of conduct that govern the conduct of MPs, improving their training and that of their staff, and improving the integrity of grant schemes. The recommendations aim to address systemic weaknesses found in this investigation and reinforce NSW Parliament’s ethical culture. This includes devising a permanent ongoing professional development program for members, and that relevant codes and sources are reviewed and updated in relation to the use of public resources to clarify the limited circumstances in which it is acceptable to intermingle parliamentary duties with personal or private activities. The ultimate goal is to improve and enhance the reputation of the NSW Parliamentary system to the betterment of the people of NSW through the adoption of the recommendations. The Commission notes that initial steps to commence a professional development program have been taken.
To help address the lack of reporting, the Commission will soon embark on an educative campaign to increase awareness among agencies of the importance of reporting suspected corrupt conduct.
The Commission held two public inquiries as part of this investigation, over 30 days, initially on 19 days in September and October 2020 at which 26 witnesses gave evidence, and then a further public inquiry over 11 days in October and November 2021, at which 14 witnesses gave evidence. Assistant Commissioner the Hon Ruth McColl AO SC presided at both public inquiries.
Following the close of evidence, a timetable was set for the filing of written submissions by Counsel Assisting and submissions in response on behalf of affected persons. All submissions in response to the submissions of Counsel Assisting were to be provided to the Commission by 28 March 2022. Some parties requested and were granted an extension of time in which to make their submissions. Those submissions in response were received on 9 May 2022. Additional submissions were provided by the Commission to selected parties on discrete issues on 27 April 2022 and 6 October 2022. Respective responses were received on 4 May 2022 and 18 October 2022.