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ANALYSIS

Arthur Sinodinos still has minor ICAC millstone around his neck

Kate McClymont

"You can't legislate for morality," quipped Senator Arthur Sinodinos.

The NSW Liberal senator was not talking about the moral decisions politicians make with regard to their entitlements. 

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Election 2016: Sinodinos' awkward interview

The Coalition frontbencher stumbles through a television interview, quizzed on taxpayer funds given to a company that donates to the Liberal Party.

​Instead, he was in the witness box at the NSW Independent Commission Against Corruption's Operation Spicer inquiry in 2014, where he was being grilled about who in the Liberal Party was responsible for laundering banned donations from property developers.

Sinodinos told the ICAC hearing he knew nothing about the practice even though he was chair of the NSW branch's financial committee.

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But as he looks set to be handed the health portfolio after Sussan Ley's resignation, it is another corruption inquiry – Operation Credo – that continues to be a millstone around his neck.

Credo examined corruption in the Eddie Obeid-linked water infrastructure company, Australia Water Holdings, for which Sinodinos was paid $200,000 to be deputy chairman, then chairman for three years up until he became a federal senator in 2011. 

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The AWH report cannot be handed down by ICAC while the recently-jailed former powerbroker Obeid is still facing prosecution. Obeid, his son Moses and former mining minister Ian Macdonald are due to stand trial later this year over the awarding of a coal lease that resulted in the Obeid family corruptly receiving $30 million.

Operation Spicer made no corruption findings against Sinodinos, and he is not due to face any when the AWH report is finally handled down. However, serious questions are likely to be raised about the adequacy of his actions as company director and his poor performance in the witness box.

Despite his reputation as an astute political operator during his nine years as then prime minister John Howard's chief of staff, Sinodinos could not get to the bottom of rorting on an enormous scale at AWH, a company that had one contract and 10 employees.

During his embarrassing testimony, which was punctuated by a flood of  "I don't recalls" or "I don't remember", Sinodinos admitted he did nothing to investigate why AWH was billing huge expenses to the state-owned Sydney Water when its work delivering water and sewerage infrastructure to new housing estates in Sydney's north-west was winding down.

This was despite two warnings, one from Dr Kerry Schott, then head of Sydney Water, and another from AWH investor Rod De Aboitiz, who met Sinodinos in 2010 to warn him of the company's parlous financial position.

"Arthur, you know that solvency is a big issue for a director," de Aboitiz told him.

Even more astounding was Sinodinos'  testimony that he knew nothing about AWH's $75,000 in donations to the Liberal Party at the very same time he was the NSW Liberal Party treasurer.

During 2011, as Sinodinos was eyeing a political career, the salary for a backbencher was about $140,000. This was not nearly enough to support the $100,000 a year rental payments on his Rose Bay house, or the lease payments on two cars, a Jaguar and a Mercedes.

The ICAC heard that Sinodinos stood to make up to $20 million if the incoming NSW Liberal government entered into a private-public partnership with AWH.

The corruption inquiry heard that, while Labor was in power, Obeid's close political allies Joe Tripodi and Tony Kelly, both of whom have subsequently been found to be corrupt in other ICAC inquires, although have yet to be prosecuted, had forged a cabinet minute in an attempt to get AWH the private-public partnership that would have made AWH a billion-dollar company and delivered an estimated $60 million to the Obeids.

While there was no suggestion Sinodinos was aware of Obeid's lobbying, he was questioned about his own failure to reveal he had "skin in the game" when he was lobbying then premier Barry O'Farrell and then finance minister Greg Pearce over the deal.

"I think they would have understood officers of the company would have benefited," Sinodinos told the corruption inquiry.

Fairfax Media has previously revealed that, in 2013, such was Sinodinos' precarious financial situation, key Liberal fundraisers sounded out major donors to the party about chipping in to buy a house for him.

Sinodinos said at the time he had "no knowledge" of this plan, which was later shelved.

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