(Images: AAP/Erik Anderson; AAP/Joel Carrett)

The New South Wales premier’s secret relationship with former MP Daryl Maguire led to a fundamental but undeclared conflict of interest at the top of the government, with Gladys Berejiklian controlling the funding of the very body which revealed Maguire’s corruption.

That conflict has been made more pressing over the past 18 months, as the Independent Commission Against Corruption (ICAC) has pleaded with the premier’s office for extra funding for its survival.

ICAC made its case in increasingly desperate terms in late 2019 as the government’s funding cutbacks over successive years hit hard. It warned that without a funding boost it would be forced to make 31 full-time employees redundant from its 120-strong workforce with an “immediate and devastating” impact on its ability to fight corruption.

As ICAC made its case to Berejiklian, no one was aware that she was in a close personal relationship with Maguire who had already been the subject of an ICAC investigation and public hearings in 2018. (Maguire admitted trying to earn payments by setting property developers up with investors, particularly large Chinese firms.) 

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In May this year, with Berejiklian still secretly seeing Maguire, ICAC released a report from leading NSW SC Bret Walker which said the government’s funding arrangements exposed it to the risk of undue influence, given the central role of the premier’s office in deciding funding.

It said the Department of Premier and Cabinet had “reluctantly” agreed to provide an extra $2.5 million in 2019 so its work could continue.

ICAC’s relationship with the NSW government took a sharp turn for the worse in 2015-16 when the government slashed its funding by more than 25% — from $27.5 to $20m. It has still not recovered. 

Berejiklian was then treasurer and deputy leader of the NSW Liberal Party. The cuts came at a time when the budget was more than $5 billion in surplus and were widely seen as payback for a series of high-profile investigations which had exposed staggering levels of corruption in the Liberal government.

Between 2011 and 2015, ICAC investigations forced the resignation of more than a dozen Liberal MPs, including two ministers. Most were revealed to have accepted or arranged secret donations from property developers in the 2011 election which brought the Coalition to power. 

The most senior ICAC casualty was then premier Barry O’Farrell who resigned after admitting he had received a $3000 bottle of vintage Grange as a gift from Australian Water Holdings, which he had initially failed to declare.

The same inquiry implicated senior NSW Liberal Party identity and then federal senator Arthur Sinodinos.

O’Farrell’s resignation in April 2014 was a cataclysmic event for the Liberal government. 

Yet the ICAC’s high-impact investigations appear not to have alerted Berejiklian to the risks of corruption. 

The evidence shows that in February 2014 Berejklian was told by Maguire that he had received a $5000 commission from his role with a business partner in selling a motel. She greeted the news with a “woo hoo” and lots of exclamation marks. And then kept her relationship with Maguire a secret for the next five years as he continued to tell her news she apparently didn’t want to know.

That decision is proving fateful and it raises serious questions about the public’s right to know.

Here are some:

  • The ICAC first conducted hearings into Maguire in July 2018, revealing a level of corruption which shocked the premier. Eight months later, in March 2019, there was a state election. Why didn’t Berejiklian declare the relationship prior to the election? Was it to avoid potentially fatal publicity? 
  • Did the ICAC have surveillance material on Berejiklian before the election? And if so, why didn’t it hold hearings back then? (The ICAC told us it didn’t comment on investigative matters.)
  • When it came to pleas for increased funding, did Berejiklian excuse herself from discussions given she was determined to keep the relationship to herself?

We have approached the premier for answers.

Will this be the end of the Berejiklian government? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication in Crikey’s Your Say section