The scandal-plagued NSW branch of the ALP is back under scrutiny after a corruption watchdog finding that a former Labor politician and a restaurateur allegedly conspired with others to disguise a $100,000 donation to the party from a Chinese billionaire in 2015.
The report, released by the NSW Independent Commission Against Corruption (ICAC) shortly before midday today, is the culmination of a four-year investigation into a 2015 fundraising dinner organised by the NSW Labor Party for Sydney’s Chinese community.
ICAC found that two men, former NSW upper house member Ernest Wong and Sydney restaurateur Jonathan Yee, were the architects of the plan and that Mr Wong, as a member of NSW parliament, had engaged in "serious corrupt conduct" in doing so.
It also found that NSW Labor’s community relations director, Kenrick Cheah, allegedly helped the conspiracy by faking documentation and then lying to ICAC about it.
Mr Huang and other Sydneysiders, including the 10 so-called straw donors, should also be considered for prosecution, the report found.
The report comes at a particularly inopportune time for Labor, which is only months out from a federal election in which China is expected to loom large.
"It's a very tough and troubling report for Labor," NSW Labor leader Chris Minns said in a statement.
Chinese Friends of Labor
The alleged conspiracy centres around a fundraising dinner in Sydney's Chinatown on March 12, 2015.
The event was organised by Chinese Friends of Labor, a NSW ALP ethnic outreach group run by Ernest Wong.
All large Australian political parties host dinners during which attendees donate money to the party.
While it is not formally acknowledged, such donations often see the donor receive increased access to the party, particularly if the donation is large.
At the time of the dinner the most influential member of Australia's Chinese-speaking community was billionaire property developer Huang Xiangmo.
Mr Huang, a Chinese citizen, had arrived in Australia about five years earlier and had quickly asserted himself as a key donor to both sides of politics.
Between 2012 and 2015 the ABC estimated he donated about $1.9 million to the federal arms of the Labor, Liberal, and National parties.
However, Mr Huang was unable to donate $100,000 to the NSW branch of the ALP because he was not registered on the NSW Electoral Roll and his donation would have been far in excess of the $5,000 cap on political donations.
Mr Wong knew Mr Huang and, ICAC alleges, was involved in devising a scheme to allow Mr Huang to donate $100,000 by using so-called "straw donors".
Straw donors are people who agree to put their names to donations despite not being the source of the funds.
Ten people and two businesses, all connected to Sydney's Chinese community, allegedly signed false declarations saying they had donated the money.
Most of them stated they gave $10,000 on the night split into two donations: half to the NSW branch of the ALP and half to Country Labor, which was formally another party.
The donations were likely structured that way to avoid donation caps in place at the time, which prevented individuals from donating more than $5,000 to a party.
ICAC alleges that the $100,000 in fact came from Mr Huang, who had organised a $100,000 cash withdrawal from his Star City casino account several weeks after the dinner.
A few days after that withdrawal, Mr Huang allegedly delivered the cash, held in a plastic Aldi shopping bag, to then NSW ALP general secretary Jamie Clements.
ICAC did not make any adverse findings against Mr Clements, who denied receiving the money and now works as a solicitor, because there was, "insufficient admissible evidence to prove to the criminal standard that Mr Clements knowingly gave false evidence to the Commission".
Mr Clements' role in the investigation is a particularly awkward issue for NSW Labor: he and current state leader Mr Minns have been friends for years, though they no longer have any professional relationship.
Billionaire and party official relationship 'inappropriate'
The ICAC report did single Mr Clements out for criticism regarding his close relationship with Mr Huang, which it labelled as "inappropriate".
It outlined two cases during which, ICAC alleges, Mr Clements was given a total of $45,000 from Mr Huang for work and personal reasons but failed to inform the ALP.
"[Mr Clements'] role as general secretary of NSW Labor made him highly influential," the report stated.
"It is often the case that individuals in that role (and other senior officials from the NSW Labor and other political parties) go on to become parliamentarians, ministers or ministerial advisers.
"Consequently, there existed the real possibility that Mr Huang's gifts to Mr Clements would influence future government policy and decisions, in addition to the immediate access to senior NSW Labor figures that he was granted.
"The inappropriate relationship between Mr Huang and Mr Clements stresses the need for political parties to have sound internal controls to manage the risks of gifts, benefits and conflicts of interest."
ICAC also noted that after Mr Clements resigned as NSW Labor's general secretary in 2016 he was offered a role with one of Mr Huang's Sydney businesses.
The job was to provide Mr Huang with "advice and assistance".
Mr Clements was paid a $4,000-a-week retainer between February 2016 and February 2019, ICAC said.
The ICAC investigation was made public in December 2019, when investigators executed a search warrant at NSW Labor's Sussex St headquarters.
Two months later the ABC outlined the detail of the alleged conspiracy, prompting the ALP to announce it was quarantining the $100,000 while ICAC investigated.
The almost 284-page report has taken more than two years to write, following public hearings in late 2019.
The matter was referred to ICAC by the NSW Electoral Commission in January 2018 after irregularities in the donations made at the 2015 Chinese Friends of Labor dinner were uncovered.
When contacted by the ABC, Mr Wong said he would not be making any comment on the report and stood by his evidence during the public hearings, during which he said there had been no attempt to evade electoral laws and Mr Huang was not the source of the $100,000.
Mr Cheah declined to respond to the report. Comment continues to be sought from Mr Yee, Mr Clements, and Mr Huang.
