Alex Mitchell has been keeping Crikey readers up to date about the remarkable stand-off inside the NSW ALP over the vexed issue of power privatisation, which will probably see Premier Morris Iemma and Treasurer Michael Costa defeated at Saturday’s special ALP conference.

However, no one has yet mentioned the conflicts of interest involved, especially for key players such as Paul Keating and Bernie Riordan.

Riordan has a double act as ALP President in NSW and secretary of the Electrical Trades Union. He’s the Dean Mighell of NSW but rather than being expelled by the ALP he’s President of the whole show.

Riordan is a solid lefty who has led the campaign against energy privatisation. But how can a bloke who represents a special interest group known as electricity workers dictate the policies of government as they relate to those same workers?

Riordan’s conflicts go to the very heart of the ALP’s gerrymandered structure which guarantees unions 50% of the votes at party forums, irrespective of how many members the unions or the party has.

The heavily conflicted Riordan is exploiting that gerrymander for all it’s worth right now when surely the ALP would have a code of conduct that prevents individual union leaders influencing party policies that relate directly to their industry.

Such a conflict would raise plenty of eyebrows in the corporate world. Then again, this is NSW and Riordan’s left wing supporters point to conflicts amongst his right wing pro-privatisation critics.

The biggest is this: Should Paul Keating be holding meetings with Unions NSW secretary John Robertson and Riordan when he is the international chairman of Lazard Carnegie Wylie, the advisory house which landed the lucrative energy privatisation gig with the NSW Government?

John Wylie is Australia’s leading energy privatisation exponent, as you can see from this list of power deals over the past 15 years.

He led the $30 billion worth of energy sector privatisations for Jeff Kennett and his old firm CS First Boston collected more than $100 million in fees. Wylie’s share is thought to have been well over $20 million.

Wylie left CS First Boston to establish the boutique adviser Carnegie Wylie with his old Oxford mate Mark Carnegie shortly after Kennett lost office. They then came together with Lazard last year which was led in Australia by Paul Keating’s long-time mate Mark Burrows.

If Keating stands to personally profit from NSW belatedly following Jeff Kennett’s lead, then surely he shouldn’t be using his ALP connections to get involved in the lobbying ahead of Saturday’s conference.

In the interests of full disclosure, perhaps the parties should place all the cards on the table. What is the nature of Lazard Carnegie Wylie’s contract with the NSW Government and what is the nature of Paul Keating’s contract with Lazard Carnegie Wylie?

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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