Come On Australia, enough is enough

Chuck these crooks out!

This is a story of two charitable foundations with strong urges to be generous to the Liberal party. One – the Free Enterprise Foundation – is in the news and is causing the NSW Liberal party enormous strife. The other – The Greenfields Foundation – is not. And therein lies the problem.

The reason the NSW Electoral Commission has been able to take on the NSW Liberal party for “washing” illegal donations through the Free Enterprise Foundation is the evidence provided to the Independent Commission Against Corruption (Icac).

Deliberately and forensically, as only a body with those kind of powers can be, Icac assembled a wall of verbal and documentary evidence in 2014 that shows the NSW party sending donations from property developers to the FEF and arranging to have them funnelled back, despite the fact that state law had banned donations from property developers from January 2010.

There was sworn testimony that the idea of routing the donations through the FEF was openly discussed at meetings of party officials and cheery emails from the NSW party’s chief fundraiser to the chairman of the FEF, Canberra accountant Tony Bandle, attaching cheques and informing him the generous donors “would like the trustees to consider donating their contribution to the Liberal Party of Australia (NSW division)” and asking the FEF to send the donor a receipt. And it received as evidence the list of the almost $700,000 in donations channelled back to the NSW party, mostly from property developer companies, which resurfaced this week as the stand-off between the commission and the NSW party continued.

The donations are not, as has been widely misreported, entirely “secret” or “hidden”. Those above the federal threshold for donations (about $13,000) have been disclosed by the federal party under federal laws. In fact, my clever colleague Nick Evershed graphically documented their intra-party flows in 2014.

But the NSW Electoral Commission insists the party is obliged to declare the donations at a state level also, and it is withholding $4.38m from the NSW Liberal party – money the party needs to fight the imminent federal election – to focus the party’s mind on that question. And it is standing its ground against the party and former party office holders, including the now Cabinet secretary Arthur Sinodinos.

In making its legal case, the Electoral Commission is finally puncturing an obvious lie, the fiction that foundations such as the FEF are set up with some kind of broad charitable purpose and just happen to feel overcome with the need to make regular political donations to the Coalition.
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It was always obvious they were set up to give political donors anonymity and to get around electoral disclosure laws, and even after they were forced under federal law, in the 1990s, to declare the donations they receive as “associated entities” they still gave donors a less direct means of donating to the conservative parties and provided a way to circumvent some state laws. (The SMH revealed that in 2013 the former Liberal party federal director Brian Loughnane advised television producer Reg Grundy to send a $200,000 donation via the FEF to “maintain his privacy”) And you may not be surprised to learn that when the Liberal’s former chief fundraiser Paul Nicolaou wrote those nice notes to Tony Bandle asking that he donate the money back to NSW, the FEF almost always did.

The Icac received the trust deed by which the FEF was set up in 1981 as a charitable trust, in which its “prescribed purposes” are “promoting the principle of free enterprise”. The FEF has donated $3.8m to the Liberal party in just the past five years, but when Icac asked Bandle when he had made a charitable donation he said: “Oh, that was ah, 18 months ago um, certainly there’s been another one recently. I’ve got a plaque in my office from Open Family in Canberra which looks after street children in Canberra um, where we gave a substantial donation, it was something like $10,000 and that was, that was many years ago though, yes.”

Many years ago Bandle also featured in a controversy over another foundation, but that concerned federal laws, and there was no federal Icac or other organisation to force answers. So in the end nothing happened, and the Australian Electoral Commission’s recommendations to try to make sure the problem never happened again were ignored.
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That controversy concerned the Greenfields Foundation, which I came across in the 1990s in the Liberal party’s annual disclosures of financial information. The foundation had lent the Liberal party $4.75m, which allowed it to pay off a large debt incurred for the 1993 election campaign. Its postal address was the same as the Free Enterprise Foundation. Its trustees were the very same Mr Bandle and a former federal Liberal party president. But Bandle insisted he could not disclose who had lent the money through the foundation.

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