A bottle of wine may be the least of the NSW Coalition Government's problems

It’s not just that then NSW Premier Barry O’Farrell denied in evidence before the NSW Independent Commission Against Corruption (ICAC) that he had received a bottle of Penfold’s Grange wine worth almost $3,000 from Nick Di Girolamo on 20 April 2011, nor his failure to declare this gift on his member’s disclosure declaration, that caused him to resign.

The situation is more complex than that and, much of it centers around his friendship with Liberal Party fundraiser and lobbyist Nick Di Girolamo possibly intruding into his decision making in an official capacity.

In 2009 Australia Water Holdings Pty Ltd (AWH) donated $14,350 to the Liberal Party of Australia (NSW Division), in 2010 donations totalled $26,100.00 to the NSW Division and in 2010-11 it donated $61,603 in thirteen different parcels, according to disclosures lodged with the NSW Electoral Funding Authority.

Along the way the company also managed to spend $1,350 fundraising for an unspecified political campaign team.

In 2010-11 AWH also donated $2,200 to the Australian Labor Party (NSW Branch) and $10,000 to the National Party of Australia (NSW).

According to media reports, then Shadow Minister for Natural Resource Management and now NSW Minister for Primary Industries Katrina Hodgkinson passed that $10,000 donation straight onto the Nationals state branch.  

On 6 June 2007 Nick and Jodie Di Girolamo made a personal donation to the “Liberal Party” of $2,500 and on 30 September 2010 Nick Di Girolamo made a personal donation to the “NSW Liberal Party” of $1,833.

In 2011 Australian Water Holdings contracted Liberal Party power broker Michael Photios, who was then acting as a government relations consultant, to supply advice to then CEO Nick Di Girolamo and lobby the O’Farrell Government on the company’s behalf for a fee of $5,000 per month.

On 18 January 2012 state-owned Sydney Water Corporation and Australian Water Holdings Pty Ltd signed a project management service contract and Liberal Party member/fundraiser and AWH part-owner Nick Di Girolamo was appointed to the board of State Water in July 2012 at which time Ms Hodgkinson was water minister with responsibility for the corporation. 

In 2013 Mike Baird as Treasurer told an estimates hearing that all board appointments were made on merit and approved by cabinet.

On 17 March 2014 it was reported that the Liberal Party of Australia intended to return to Sydney Water the $75,636 in AWH political donations which had been improperly billed to the state-owned water corporation as AWH administration fees.

Mr. Di Girolamo appears to have resigned from Sydney Water on the day the two NSW Independent Commission Against Corruption (ICAC) investigations Credo and Spicer were announced. He is also reported to have resigned from the board of Australian Water Holdings in 2013 and possibly divested himself of shareholdings in that company since then.

Di Girolamo gave evidence during the first investigation and, both the fact that AWH was blatantly gouging the state-owned water agency Sydney Water for millions of dollars and his high level of access to the NSW Coalition Government and then Premier Barry O’Farrell came to light.

When questioned in the NSW Parliament on 26 March 2014, Premier O’Farrell did not deny a 26 May 2011 meeting between himself, the former finance minister and Mr. Di Girolamo about AWH at which it was allegedly decided that Sydney Water should stop the public tender process and replace its managing director in the new tender process.

Neither did he deny writing a letter of support on 28 September 2010 in his capacity as Opposition Leader, in order to assist Australian Water Holdings in securing that lucrative contract with Sydney Water nor deny an earlier 12 August meeting with Di Girolamo and Obeid concerning his support of AWH’s bid for the Sydney Water contact and a September 2011 meeting with Di Girolamo.

On 16 April 2014 Barry O'Farrell resigned as NSW Premier after he was found to have mislead the NSW Independent Commission Against Corruption.

That this level of contact between O'Farrell and Australian Water Holdings may not have been  in the best interests of the people of New South Wales is indicated by the fact that barely one day into his new premiership Mike Baird stepped back from his previous 12 November 2013 support of board appointments; I am happy to stand in this Chamber and state clearly that we are very proud of the appointments we have made to our State-owned corporations. And I stand by every statement I have made and, his 2012 particular support as Treasurer of Nick Di Girolamo. Conceding that his backing as the then shareholding minister for State Water Corporation and cabinet’s backing of a Sydney Water board appointment for Di Girolamo were wrong moves; In hindsight, should that have been done? No.

However, according to Fairfax Media Premier Baird and former Premier O'Farrell also have a wider history with regard to political donations and board appointments:

In July [2012], Mr Massy-Greene was appointed chairman of Networks NSW, which will manage the state-owned electricity networks, Ausgrid, Endeavour Energy and Essential Energy, when they are merged into a single entity.

No executive search was undertaken before the appointment, which was confirmed by Mr Baird in a press release on July 2.

At a budget estimates hearing at State Parliament today, opposition MPs revealed that Mr Massy-Greene's company, Eureka Capital Partners, has donated $15,000 to Mr Baird's election campaigns.

According to NSW Election Funding Authority records, Eureka Capital Partners donated $10,000 to Mr Baird in March 2007 and $5000 in March last year, shortly before the state election.

As chairman of Networks NSW, Mr Massy-Greene reports directly to Mr Baird and the Finance and Services Minister, Greg Pearce.

The Treasurer told the hearing he had known Mr Massy-Greene "through the years as someone ... through business".

Challenged by Labor MPs about whether the appointment was appropriate, given the donations, Mr Baird insisted it was made by the Premier, Barry O'Farrell.

"It's a Premier's decision, he made the decision," Mr Baird said. "We are appointing people on the basis of their merits."

ICAC is yet to hear evidence in the second investigation concerning allegations that between April 2009 and April 2012, former Liberal NSW Minister for Resources and Energy Christopher Hartcher and Liberal MPs Darren Webber and Christopher Spence, along with others including Timothy Koelma and Raymond Carter, corruptly solicited, received, and concealed payments from various sources in return for certain members of parliament favouring the interests of those responsible for the payments.

It is possible that a number of Liberal Party MPs and perhaps Liberal Senator Arthur Sinodinos may be called as witnesses during this investigation.

Mr. O’Farrell led a government that is likely to be judged as corrupt on a number of fronts by New South Wales voters whatever the final ICAC report concludes – in the meantime that bottle of wine has allowed him to escape the full glare of future media scrutiny while the political secrets still work their way into the light during Operation Spicer hearings.

NOTE: This post will be updated in the text whenever new information becomes known.