Corruption Matters - June 2022 | Issue 59
$100k cash, cover-up and corruption
In February, the ICAC released its report on Operation Aero, finding that businessman Huang Xiangmo was the true source of a $100,000 cash donation to NSW Labor and Country Labor, and that former MLC Ernest Wong engaged in serious corrupt conduct.
In the report, Investigation into political donations facilitated by Chinese Friends of Labor in 2015, the ICAC found that Mr Wong misused the privileges to which he was entitled as a member of the Legislative Council in relation to:
- 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)
- his attempt to procure a witness to give false testimony in connection with a 2015 Chinese Friends of Labor (CFOL) fundraising dinner.
The investigation focused on a CFOL dinner held on 12 March 2015 to raise money for the Labor Party’s campaign for the NSW state election. Mr Wong and Jonathan Yee, who with his family owned a restaurant business, 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 that dinner. The aim was to conceal the true source of donations.
Forms were procured from those people (some of whom were restaurant employees), which falsely stated they had each donated sums of $5,000, the applicable cap under the Election Funding, Expenditure and Disclosures Act 1981.
The ICAC found that Mr Huang was the true source of the donation, and that the money came from his “junket account” at The Star Sydney casino. 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. As Mr Huang was not on the Electoral Roll at the relevant time, he was also not a person from whom political donations could be accepted.
Mr Wong and Jonathan Yee each took numerous steps between April 2015 and the commencement of the ICAC’s public inquiry in August 2019 to monitor and influence investigations into this matter by the NSWEC and ICAC with a view to concealing the falsity of the donor declarations.
In August 2019, following the announcement of the ICAC’s public inquiry, and at Mr Wong’s request, Jonathan Yee arranged for those members of his family and staff, whom he had procured as fake donors, to individually meet with Mr Wong. At those meetings Mr Wong told those persons that, at the ICAC public inquiry, they should continue to tell the false story they had previously told the NSWEC and ICAC, to the effect they had each donated $5,000 in connection with the 2015 CFOL dinner.
This investigation exposed a number of governance failures within NSW Labor and Country Labor. The ICAC made seven recommendations to assist the NSW Government to strengthen the laws, policies and procedures concerning political donations in NSW.
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