Labor and that 100k bribe — we may never know what really happened

The Independent Commission Against Corruption has found that the NSW Labor Party took a $100,000 donation from Chinese agent of influence Huang Xiangmo and tried to hide it by co-opting a bunch of randoms to claim they were the donors.

The guy at the centre of the scheme, former Labor MLC Ernest Wong, has been referred to the Director of Public Prosecutions (DPP).

The 288-page report produced by ICAC leaves some questions dangling, however, particularly around what happened after NSW Labor officials discovered the dodge, but before the authorities started digging.

The fraudulent declarations which Wong procured were designed to circumvent the funding disclosure laws which prohibit donations by property developers. This happened in 2015. In September 2016, Wong told Kaila Murnain, then general secretary of NSW Labor, that there had been a false donation declaration and Huang was the real donor.

Murnain immediately called Labor’s lawyer of choice, Ian Robertson AO (national managing partner of the firm Holding Redlich), and they met that evening for about 20 minutes in Robertson’s office. Robertson had no recollection of the meeting. He disputed much of what Murnain said they had discussed, and his lawyers submitted that the subject matter of the meeting must have been something completely different.

ICAC concluded that the meeting was in fact about what Wong had told Murnain, and that Murnain had passed substantially the same information on to Robertson.

On what Robertson said to Murnain in reply, Murnain swore that he had questioned her closely about whether Wong had shown her any evidence to support what he was telling her about Huang’s donation. She said no. Robertson, she claimed, then said this:

Don’t, there is no need to do anything from here. Don’t record this meeting, don’t, don’t put it in your diary. Forget the conversation happened with Ernest and, and I, I won’t be, won’t be billing you for this either. Don’t tell anyone about it.

Murnain said she accepted this advice and, basically, buried the information she’d received from Wong, taking no further action.

Robertson, although he didn’t recall the meeting, squarely denied saying to Murnain what she had alleged.

ICAC had to decide whether Murnain’s claims were true. Its own counsel assisting submitted that it should not, because “it would be extraordinary [indeed, scandalous] for a practitioner of Mr Robertson’s standing to advise someone to, in effect, encourage Ms Murnain to conceal evidence of potential wrongdoing. Strong evidence would be required,” but wasn’t available.

ICAC makes its factual findings on the civil standard of proof: the balance of probabilities. Where these findings would involve serious conduct such as impropriety or criminality, the law adds a gloss — the so-called Briginshaw principle, which says that the decision-maker should consider the gravity of a positive finding before it reaches reasonable satisfaction. Essentially, tread very carefully when you’re holding a person’s reputation, career or liberty in your hands.

The only direct evidence of Murnain’s conversation with Robertson was her testimony. Her credibility wasn’t good, because she had lied to ICAC when first interviewed.

So while Robertson did give Murnain some advice about what Wong had told her, the evidence fell short of “sufficient cogency” to permit it to conclude that that advice was what Murnain had claimed. What he’d actually said to her, ICAC couldn’t say.

Later in 2016, the NSW Electoral Commission had started investigating the Huang donation, issuing compulsory notices to Labor. Murnain palmed the task of responding to another official, and said nothing about what she knew. She did, however, instruct that the response should be run past Robertson for approval.

The response was false and misleading, lying about the source of the donation. It was also patently non-responsive to some questions. A rudimentary inspection of the donation records would have told anyone that something was very fishy. However, nobody (who didn’t already know) apparently looked.

The response went to Robertson, who passed it on to a colleague at his firm with a note saying it looked OK to him. Holding Redlich advised Labor that the response was “fine to be sent” to the electoral commission.

Robertson conceded to ICAC that his “cursory approach” to reviewing the response was regrettable in hindsight. ICAC’s report notes that, because of what it found Murnain had told Robertson a few months earlier, Robertson “had reason to suspect that [that information] might have related in some way to the subject of the [electoral commission] notices”. However, “the evidence suggests that he lacked sufficient particulars to draw a conclusion to that effect”.

Conclusion: “Mr Robertson’s cursory approach to reviewing the draft responses, including the 20 donation declaration forms [which, the commission has found, were on their face suspicious] is hard to fathom in light of the suspicions that he had reason to hold. However, on balance, the commission is not satisfied that the evidence permits a finding that Mr Robertson counselled the making of false or misleading statements in response [to the electoral commission notices].”

ICAC also found itself unable to conclude that Murnain or anyone else in NSW Labor had committed an offence in providing the false and misleading responses to the electoral commission.

It is often said that the cover-up is always worse than the crime. In this case, not so much. Wong and his original co-conspirators in the fraudulent donation scheme have been sent off for likely criminal prosecution (including for giving and procuring false testimony to ICAC).

However, as to the piece in the middle — when Labor HQ became aware of the problem, before the lid was blown off by the authorities — nobody, it appears, is to blame for the party’s failure to self-report.

What actually happened will have to remain a mystery. Legally speaking, that’s not unreasonable on the available evidence. Not very satisfactory though, in terms of the truth.