Greasing Wheels, Greasing Palms

NSW Premier Barry O’Farrell resigns, 16 April 2014

So now, it’s the conservatives’ turn.

This site over the last few years has been unapologetically scathing about systemic, entrenched corruption within the Australian Labor Party. Financial irregularities surrounding the Australian Workers’ Union, particularly in Victoria and Western Australia, have embroiled federal ministers, including a former Prime Minister. Misuse of union funds by two former bosses of the Health Services Union have now resulted in jail terms. And now, the upcoming Royal Commission into “registered organisations” (that is, trade unions), headed by Chief Commissioner, former High Court Justice Dyson Heydon, threatens to uncover a veritable mountain range of sleaze, stretching back over decades.

But this week, Prime Minister Tony Abbott may stop and ponder just what it is that he’s begun here. Because right now, a similarly putrid stench is starting to rise from the NSW branch of the Liberal Party. Two weeks ago, at a hearing of the state Independent Commission against Corruption (ICAC), Premier Barry O’Farrell denied under oath receiving a bottle of 1959 Penfolds Grange Hermitage, valued at about $3,000, as a gift from Nick Di Girolamo, chief executive of Australian Water Holdings, a now-notorious firm linked to disgraced former Labor politician and kingmaker Eddie Obeid. Having denied receiving it, a hand-written note from O’Farrell was produced, thanking Di Girolamo for the gift, along with mobile phone records showing several calls at the time from O’Farrell to Di Girolamo. As he had not declared the gift, as required, into the parliamentary Register of Pecuniary Interests, and had been caught out, red-handed in a lie, he had no choice but to resign.

Conservative commentators were sympathetic to O’Farrell’s “memory lapse”. As if a politician would ever forget receiving a $3,000 bottle of wine from a businessman who contracted with his own government agencies. Abbott almost fell over himself praising O’Farrell’s “utterly honourable” stand in resigning, and then monstered a journalist who dared utter the word corruption. And thereby—as he was about to discover—handcuffed himself to the whole mess.

O’Farrell’s “memory lapse” in receiving such an extraordinary gift was not only inexplicable, but an almighty coincidence. Because a few days after O’Farrell’s resignation and this press conference, it emerged that only a few months after the gift was received, this very same Nick Di Girolamo just happened to be the front-runner being considered by O’Farrell for a directorship of the Sydney Ports Corporation, a $100,000 per year sinecure requiring very little work. E-mails from staff in O’Farrell’s office appeared to indicate that Di Girolamo’s appointment was all but assured.

Pretty good return for a three-grand bottle of plonk, I’d say.

The stench doesn’t evaporate with O’Farrell’s departure, either. Environment Minister Chris Hartcher, who appeared before ICAC this week is at the centre of a funding scandal, in which it appears that a substantial proportion of all recent political donations to the NSW Liberal Party originated with illegal sources (such as property developers, who are prohibited by law from making such donations, for obvious reasons), funnelled through sham front companies. Parliamentary Secretary Marie Ficarra has already stood down from her ministerial rôle, as well as the parliamentary Liberal Party, in connection with the same scandal. Another state Minister, Anthony Roberts, has been caught out accepting graft, in the form of a holiday on a luxury yacht, from a wealthy commercial property developer. From what I’ve read of the ICAC hearings to date, it’s looking like these examples are merely the tip of the iceberg.

Excuse me for a moment while I go and stick my fingers down my throat.

As all this involves conservative politicians, the MSM in this country have abandoned their recent peculiar reticence to investigate political corruption, and are charging in with all guns blazing. And for once, I agree with them whole-heartedly. This won’t go away until all the sludge is flushed out of the sewer, and that won’t happen without a free, fearless and relentless press. Now, what do you think might have brought about their strange, though welcome conversion on the road to Damascus (via Sussex and Macquarie Streets) in the last few months?

According to Transparency International,

Corruption is the abuse of entrusted power for private gain. It hurts everyone who depends on the integrity of people in a position of authority.

A pretty fair starting point. And if anyone can show me how that definition does not apply to the current NSW government, I’d love to know. As a Libertarian, I believe the size and scope of government is one of the major systemic factors behind such corruption. If governments didn’t regulate every minute detail of our lives, into areas considered unthinkable just a few decades ago, the potential for bribery would be significantly reduced. In the case of Australia, the structure and history of party politics is also a major factor.

But is some level of palm-greasing almost inevitable? Most business leaders will admit that doing business in many parts of the world is actually impossible without some form of graft, back-handers, call it what you will. In 2004, the government-owned Australian Wheat Board, which holds a statutory monopoly on all wheat exports from my country, was discovered to have paid bribes for many years to senior members of the Saddam Hussein regime in exchange for vast, exclusive grain contracts, all in defiance of international conventions concerning Iraq, in particular the oil-for-food program. Some would argue that Australian wheat farmers, and hence the Australian economy generally, did very well out of those deals, which would otherwise have gone to other, less scrupulous nations. But if we sanction corrupt dealings with foreign governments, excusing them on the grounds of the levels of endemic corruption over there, surely we are thereby green-lighting the corruption of our own government officials by third parties overseas?

Transparency currently ranks Australia 9th overall, out of 177 countries, on its corruption index (behind New Zealand, Switzerland, the Netherlands, Singapore and the Scandinavian countries). Unless a real effort is made to clean out the rorting this time round, regardless of which side of politics is behind it, that rating—and more importantly, the international perception it represents—is sure to take a battering.

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11 Responses to Greasing Wheels, Greasing Palms

  1. farmerbraun says:

    Ya gotta feel sorry for him eh? The poor bastard.
    He could remember every bottle of Grange that he ever received except that one. I mean, I ask you. It’s hardly fair.

    I can’t remember every bottle of wine that I ever drank. I have to say though, I’m bloody sure I’ve never drunk a bottle of Grange because no bastard has ever given me one.

    Arrange a sinecure like that one for me, and I’ll have one sent straight over – Oz 😉

  2. Ozboy says:

    Right on cue – an annular solar eclipse over my home in Tasmania, due to peak at 1700 AEST (20 minutes). Unfortunately, thick clouds are preventing us from observing it directly.

    Getting dark early this afternoon:

  3. Ozboy says:

    And more OT, but the Australian Electoral Commission has announced the results of the Western Australian Senate election, re-run due to a set of lost ballot papers, totalling more than the margins of the first count. Of the six seats up for grabs, the Liberals have won three, with Labor, the Australian Greens and the Palmer United Party winning one each.

    This means that, from 1 July, Clive Palmer will control the balance of power in the Senate. After the Prime Minister, he will be the most powerful man in the country.

    Bloody hell.

  4. Ozboy says:

    Even Andrew Bolt is now conceding the Di Girolamo-O’Farrell relationship reeks.

    At the risk of being branded racist, the Irish really should hold the Italians at arm’s length 😆

    (BTW I’m of Irish extraction and many of my Italian friends would heartily agree with this sentiment)

  5. izen says:

    To ‘Rort’ is a wonderful addition to the English vocabulary.

    But the exchange of ‘favours’ in government, business and unions is such a deeply embedded aspect of the social order that it always seems rather unfair or arbitrary just who gets punished for it.
    That is one aspect that I find asymmetrical. So often the person who takes the bribe is punished much more harshly and seems to attract more moral opprobrium that the person or entity paying the bribe. Will Nick Di Girolamo, chief executive of Australian Water Holdings have to resign his position?

    And then there is the way in which overt bribery is rendered unnecessary for business to ensure regulatory capture, in the UK bribes are not required between people with the same ‘breeding’. No member of the Bullingdon club would be so impolite as to cause problems for the hedge fund owned by a fellow member….

    The other aspect that is often difficult to parse is the way that while a bottle of good wine might be seen, and punished, as a bribe, a political contribution, or the funding/sponsorship of a candidate, party or policy campaign is somehow legitimised as an acceptable part of the political process.

    While bribery for personal gain is obviously an ethical lapse, {on both sides?} I cannot help but regard it as a much less egregious social evil than the bribery by the financial centres of power for political advantage. Although again, where bribery stops and acceptable financial policy support starts can be a grey area.

    I think it was Talleyrand who when faced with accusations of taking bribes replied that of course he took money to more fully consider an important matter, preferably from both sides. However he never let the money influence his judgement.

    The point about asymmetry is well made. However, it is an optical illusion. The citizenry did not elect Di Girolamo to his post in Australian Water Holdings. He is the holder of no public trust, beyond his fiduciary duty as a company director. And on any fair reading of the situation, he was being faithful to that duty in currying favour with a newly-elected politician, short of an actual cash bribe; an action which could have only improved his company’s prospects, aside from his own. O’Farrell, on the other hand, was the holder of a public trust. The citizens of New South Wales (which no longer includes yours truly) expected him to make decisions, including government board appointments, in the best interests of the state, and not in payment of favours.

    Like you, I struggle to differentiate donations to political parties with out-and-out bribery. The best I could possibly say about it is that at least political donations are public, visible and limited by law. Some of the most insidious donors are large benefactors of both major parties – Oz

  6. Ozboy says:

    And now, ICAC has heard evidence of corrupt dealings between Mike Gallacher, the State Police Minister, and property development plutocrat Nathan Tinkler. Gallacher has stood down from the Ministry for the duration of the inquiry.

    FFS, this mob is making Labor look like a bunch of amateurs!

    Update 1621 AEST: No, Gallacher has now resigned his portfolio permanently, it was announced fifteen minutes ago. This just gets worse and worse.

  7. Luton Ian says:

    If the people, who are accused of sleeze, had not been in coercive / monopoly* positions. would we regard their actions as wrong?

    Let’s for example assume that O’Farrell was a private businessman, who was looking to place an order for a dozen computers and a 3 year support contract, and as one of the bidders, Di Girolamo, had sent him a very nice bottle of plonk.

    (Ok, I know that such a nice bottle before the contract would set alarm bells ringing in our heads, perhaps a bottle of malt at Christmas, after he got the contract).

    Even if O’Farrell was a manager or director of a multi owner company, while shareholders might be disheartened to find that he apparently made decisions influenced by a nice bottle of plonk, rather than the shareholders best interests. Those shareholders who were sufficeintly upset, could make arrangements to sell their shares and put their money behind people whom they held in higher esteem – or just spend their money on nice bottles of plonk for themselves.

    The problem isn’t so much the behaviour, as the context;

    The context is of an institution which we have no way of selling our part of. Infact it’s pretty unlikely that we get any “dividend” at all, and instead pay in around 45% to 55% of our annual incomes (under threat of serious retribution up to and including death at the hands of their thugs), into the hands of people who likely got there when those voters who couldn’t make their minds up who to vote for, decided for all of us on the basis of a last minute whim.

    Arguably, that whim is more moral than a cynical and cunning calculation of who is going to rob others to benefit you (is voting for someone else to rob your neighbours and give some of the proceeds to you, more moral than having the guts to go do it face to face for yourself?).

    Even assuming that all who seek “public” (established gangster) orifice were well meaning, that no psychopath ever got near such an institution – that psychopathy were a purely private sector phenomenon; banksters, stock market traders corporatrions. Given what we know about the superficial charm and cold manipulation, especially of emotions, practiced by high functioning psychopaths.

    Having anything short of omniscient and entirely good beings in coercive and monopoly roles – is asking for abuse and corruption. Anything below the level of angels will be lead astray.
    As for the lower ranks in coercive institutions, Milgram’s “prison” experiments in the 1960s (inspired by Adolph Eichmann’s defence of “I was only following orders”) shows that around 65% of the general population will administer a “lethal” electric shock, when pressed to do so by an “Authority figure”.

    It isn’t the behaviour, it’s the institution.
    *monopoly cannot exist without coercion.

    Nicely put. Yep, coercion’s the difference: we can’t sell off our shares in government, short of packing up and leaving (which I did a decade ago, though I still pay NSW land taxes and other fees). Although as I explained earlier, the state sanction of monopoly privilege granted the limited liability corporation for the last 150 years makes it genetically almost indistinguishable from its leviathan parent. So it’s unsurprising that similar levels of corruption are found among senior executives as cabinet ministers; the job attracts that type of venality, as moths drawn to a flame.

    The disgraced NSW Liberal MP count is now up to four. Trouble is, the NSW voters chucked out the last lot in 2011 due to their endemic corruption and incompetence. Next year’s state election is shaping up as a Hobson’s choice. Or maybe, Henry Ford’s – Oz

  8. Luton Ian says:

    There are so many [bad] meanings in those last two sentences:

    Wasn’t Henry Ford somewhat enamoured with “black” politics and its strong, centrally planning leaders? Or was that just for business purposes? he did after all build plants for ‘Dolph’s (and FDR’s) bossom buddy, Joe.

    Ford’s organizational abilities were also religiously worshipped in Huxley’s fictional “Brave New World” distopia.

    And, as floppy Freddy Hayek points out in “Road to Serfdom” the failures of central planning lead to fascism and nazi-ism (black and brown – strong leaders to make the plans work).

    If only it could be as simple as voting all of the vermin out for good.

  9. Ozboy says:

    Right now, Bruce Wilson’s bagman, Ralph Blewitt, is testifying before the Heydon Royal Commission. Julia Gillard has been advised to seek legal advice. You can watch the webcast here.

  10. Ozboy says:

    And yet another NSW Liberal MP is nabbed: MLA for Newcastle Tim Owen has announced he will not contest next year’s state election, following ICAC revelations of receiving illegal campaign donations.

    Maybe they should all walk out and start again.

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