By sheer number of resignations, the NSW Coalition government goes to next weekend’s election as one of the most scandal prone in history. By Mike Seccombe.

A brief history of Liberal Party scandals

NSW Premier Dominic Perrottet walking down a street in a white shirt and tie. He carries a blazer over his shoulder.
NSW Premier Dominic Perrottet in Sydney on Wednesday.
Credit: AAP Image / Bianca De Marchi

Steve Cansdell was the first. Less than six months after Barry O’Farrell led the biggest election victory in New South Wales history, the Nationals MP announced he was resigning.

In 2005, after a speeding offence, he had someone falsify a statutory declaration. Now, as parliamentary secretary to the minister for police, he was being asked to step down.

O’Farrell’s win had been built largely on the promise of integrity in government, especially following the appalling corruption of the Eddie Obeid and Labor era.

Twelve years down the track that promise has been shredded. Dozens of Coalition politicians have been driven out in disgrace.

Measured by the sheer number and variety of incidents of misbehaviour and malpractice, and the number of resignations, the current Coalition government is truly exceptional.

Two premiers – O’Farrell and Gladys Berejiklian – and a host of lesser figures have left politics as a consequence of investigations by the Independent Commission Against Corruption. Many more have fallen to scandals of various kinds: financial, sexual, factional and other.

For all of O’Farrell’s promises to reform politics, a significant number of Coalition MPs were tainted by malfeasance from the day they won office. Indeed, even before they won office.

Despite the fact everyone knew long before the 2011 election that it was going to be a “bloodbath” for Labor, says former counsel assisting ICAC, Geoffrey Watson, SC, a cohort of people in the Liberal Party cheated anyway.

“Those Liberal Party guys … weren’t prepared to leave it in the hands of the voters,” he says. “So, they organised schemes where they were taking money illicitly from property developers.”

The complex web of relationships, involving dozens of MPs, their staff and business figures from the Central Coast and Hunter Valley, was untangled by ICAC three years after the event, across nine weeks of riveting public hearings.

“They all come to see me for money,” said one developer, Jeff McCloy, in his evidence. “I feel like a walking ATM some days.”

McCloy handed over tens of thousands in cash from the back seat of his Bentley. Other money passed through a dodgy front company named Eightbyfive, set up by a former staffer of senior cabinet minister Chris Hartcher via sham invoices. The party sought to skirt the state’s ban on political donations from property developers by washing almost $700,000 through a federal fundraising body, the Free Enterprise Foundation.

That donations scandal ended the political careers of 10 MPs, including Hartcher and the Police and Emergency Services minister, Mike Gallacher – although Gallacher hung around the parliament until 2017. It also, says Watson, served to illustrate how those seeking to win political favour move “seamlessly” between political parties, depending on who is in power.

The trail that led to those illegal campaign donations began with another investigation, into the involvement of corrupt Labor powerbroker Eddie Obeid in an infrastructure company named Australian Water Holdings (AWH), which stood to make tens of millions of dollars if it could secure a government contract.

The Obeid family had a 30 per cent stake in the company, but AWH fostered connections with both sides of politics. Its chief executive, Nick Di Girolamo, was a major donor to the Liberals. Arthur Sinodinos, former chief of staff to prime minister John Howard and then treasurer of the NSW branch of Liberal Party, was installed as chairman of the board, on $200,000 a year.

In the end, there was no corruption finding against either Sinodinos or Di Girolamo, but enormous collateral damage was inflicted. The inquiry also cost O’Farrell his job.

In evidence to ICAC the then premier denied having been given a $3000 bottle of wine by Di Girolamo. He was then shown a handwritten thankyou note he had sent. He claimed a “massive memory fail” and a day later, on April 16, 2014, resigned as premier, after having served just over three years.

O’Farrell’s demise was unfortunate. There was no suggestion of any quid pro quo for the Penfolds Grange, nor that his failure to mention it was anything more than oversight. He actually was a stickler for propriety, as he had demonstrated the previous year, when he sacked his Finance minister, Greg Pearce, over a series of indiscretions.

Pearce was found to have wrongly claimed $200 in travel entitlements. Shortly thereafter, he had turned up drunk and incoherent to a late-night parliamentary debate, following a party function. The final straw was a perceived conflict of interest in Pearce’s appointment of a board member at Sydney Water.

O’Farrell was replaced by Mike Baird, who took the Coalition to the 2015 election. By that time, the government had lost more than a dozen of its number to scandal, plus another handful of frontbenchers as a consequence of internal machinations, some controversial if not actually scandalous.

Baird lost 15 seats but retained government. Two years later, he also resigned.

It was not ICAC that did in Baird. Rather it was a succession of contentious decisions, which saw his and his government’s poll numbers fall sharply in 2016. One was the imposition of lockout laws, intended to stop drunken violence, which were strongly opposed by city entertainment venues and their customers – and which controversially did not apply to the Star casino. Another was a ban on greyhound racing, imposed out of concern for animal cruelty. It did not go down well with the Nationals in particular, and was subsequently reversed.

When Baird announced his retirement in January 2017, the Coalition parties were starting to look a lot like the previous Labor government, which had cycled through leaders at a rapid rate in its dying years.

Baird was replaced by his treasurer, Gladys Berejiklian, who for a while seemed to steady the ship. She appeared competent and committed and straight. Under her, the Coalition barely squeaked back into government in 2019, but the scandals kept piling up, she kept losing troops and by March 2021 hers had become a minority government.

The member for Drummoyne, John Sidoti, moved to the crossbench after ICAC began investigating his property dealings. Two other MPs fell to accusations of sexual misconduct.

In March 24, 2021, Labor’s Trish Doyle used parliamentary privilege to allege that a Coalition MP had raped a woman in the Blue Mountains in 2019. The same day, the Nationals’ Michael Johnsen announced he was taking leave immediately and stepped aside from his parliamentary secretary role, while under police investigation.

Hundreds of explicit text messages between Johnsen and an unnamed sex worker were later obtained by the ABC, in which he offered her $1000 to come to parliament. The time stamps on the texts showed some were sent while he was in the chamber, including during passage of a reproductive health bill, when he sent the message “I want you and can’t wait to fuck you over and over again.” Another apparently contained video of Johnsen masturbating over an image of the woman while in a toilet.

He resigned six days later. No charges were laid.

Then there is the case of Gareth Ward, Liberal MP for the seat of Kiama.

In September 2017, Ward claimed to have been the target of an attempted mugging in New York City. He had ordered a massage at his hotel but, according to his version of events, two minors turned up and tried to extort from him $US1000.

A few years later Ward was in the news again after being seen naked outside his Potts Point apartment. Police were called and escorted him home. He said he was disoriented, having undergone surgery earlier in the day. An hour later police were called again when the minister for Families, Communities and Disability Services was found wandering the streets in his underwear.

A year later Ward was charged over the alleged historical sexual abuse of a 17-year-old boy in 2013 and a 27-year-old man in September 2015. The matters are yet to be decided in court and he continues to assert his innocence. He will stand as an independent at next week’s election.

As these scandals were unfolding, Daryl Maguire was appearing in ICAC. His first ICAC appearances were as part of Operation Dasha, which investigated property dealings involving Canterbury council. As part of this, Maguire resigned from the Liberal Party, and then from parliament, on August 3, 2018.

ICAC was not done with him, however. Based on evidence obtained through phone taps it began another inquiry, Operation Keppel, and from that inquiry came a startling revelation: Berejiklian was Maguire’s secret lover. She resigned as premier, citing ICAC’s investigation, which has still not published its findings. Later, Maguire was charged by police with conspiracy for his part in a corrupt visa scheme.

In October 2021, NSW got its fourth Coalition premier in just over 10 years: Dominic Perrottet. Unlike his three predecessors, he is from the right of the party, a conservative Catholic, one of 12 children and father of seven. For factional balance, the Liberals selected a moderate, Stuart Ayres, as his deputy.

The government they inherited was more tenuous and arguably more dysfunctional than ever. A major reason for that was the then deputy premier and Nationals leader John Barilaro, a man with a penchant for conflict.

In mid-2020 when then Liberal minister Victor Dominello floated the idea of introducing mandatory cashless gaming cards for all poker machines and subsequently declined to attend a function hosted by ClubsNSW, Barilaro texted to tell him he was “seriously a deadset dick …” He suggested Dominello should do his “fucken job”, adding: “What about just looking after your stakeholders. Like ClubsNSW …”

In September 2020, Barilaro led the Nationals into what came to be called the Koala Wars. A proposal to protect the endangered, iconic species, the Nationals believed, would severely limit the way property owners could manage their land. Barilaro threatened to break the Coalition agreement with the Liberals and move the Nationals to the crossbench. The Libs caved.

The Nationals leader gloried in the nickname Pork Barilaro, and in a scathing report from the auditor-general was found to have misallocated grants from the $100 million bushfire recovery fund. The report was handed over to ICAC.

By the time that happened, Barilaro was gone, having quit politics at the end of 2021. No doubt the government was pleased to see him out the door, but he continued to cause trouble even then. He was appointed to a $500,000 job as NSW trade commissioner in New York, in highly questionable circumstances.

After weeks of controversy, Barilaro was forced to relinquish the job, and Stuart Ayres, who had oversight as minister for Trade, was forced from his job. A few days earlier, Perrottet had sacked Small Business and Fair Trading minister Eleni Petinos over allegations of bullying.

The litany of dysfunction and misbehaviour involving the Liberal and National parties is too long to recite in full. There was the story of Perrottet’s 21st birthday Nazi costume, revealed by disaffected, dumped minister David Elliott. There was the month-long hunt for Perrottet’s brother, Jean-Claude, so he could be served a summons to front a parliamentary inquiry into branch-stacking.

There was the suspension from the party of upper house member Peter Poulos and his removal from the election ticket after he shared explicit photos of a female Liberal MP. The disendorsement of Liberals’ Wyong candidate, Matthew Squires, over his homophobic, Islamophobic and anti-vax posts on social media.

It goes on and on. If the Perrottet government is re-elected next Saturday, it will be a greater surprise than Scott Morrison’s “miracle” win in the 2019 federal poll.

Geoffrey Watson, having “served far too long” trying to clean up the Augean stables of NSW politics, hopes neither side wins decisively. He would like minor parties and independents to emerge with the balance of power. He has even launched the campaigns of a couple.

The tightening opinion polls suggest he might get his wish.

This article was first published in the print edition of The Saturday Paper on March 18, 2023 as "A brief history of Liberal Party scandals".

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