Bridie Jabour theguardian.com, Thursday 3 April 2014
Former assistant treasurer answers 'I don't recall' or 'can you repeat the question' repeatedly during six hours of questioning
Liberal party senator Arthur Sinodinos leaves the inquiry after giving evidence. Photograph: Richard Milnes/Demotix/Corbis
Arthur Sinodinos has denied knowing the company of which he was deputy chairman donated about $74,000 to the New South Wales Liberal party, of which he was treasurer, saying he could not recall being aware of it and did not know “precise” details.
Sinodinos took the stand at the Independent Commission Against Corruption hearing on Thursday as the state watchdog investigated Australian Water Holdings. It heard AWH was pursuing a lucrative public-private partnership (PPP) with the NSW government that would have made Sinodinos between $10m and $20m and the family of former Labor party powerbroker Eddie Obeid about $100m.
AWH had a contract with the government-owned Sydney Water, which allowed it to bill the company for expenses. The commission heard AWH charged luxury accommodation in Queensland, limousine rides and Liberal party donations to Sydney Water.
Sinodinos, now a Liberal party senator, told Icac he was unaware of the donations to the party AWH had made and allegedly charged back to Sydney Water. Sinodinos said he did not know anything “in precise terms” about the donations.
“The issue of donations is a matter for the CEO and executive,” he said. “I did not know in precise terms what was being donated to the Liberal party.”
Sinodinos said he was aware the AWH chief executive Nick Di Girolamo would attend Liberal party events but he was not aware donations were being made. “I didn’t know amounts or get involved in a board level about donations to the Liberal party,” he said.
Assisting counsel for Icac, Geoffrey Watson SC, asked: “You deny knowing the company of which you were deputy chairman was donating to the party of which you were the treasurer?”
Sinodinos said yes.
When Watson asked if Sinodinos knew in his capacity as treasurer about the donations, he replied he “cannot recollect” being aware of it at the time.
In six hours of testimony Sinodinos repeatedly said “I don’t recall” or “can you repeat the question?” in answer to Watson’s questions.
AWH’s financial position deteriorated as Sydney Water questioned the value of the expenses being charged to it and for a time AWH could not pay the superannuation of its employees or its tax bill.
The senator said he was aware of the financial position but did not know the Obeid family had lent AWH $400,000 in 2011.
Sinodinos served as the chief of staff to John Howard during his time as prime minister and when he left the role in 2006 he said he was looking to get involved in the business world. He said he had been “excited” by the PPP prospect and became director in 2009 with a view to focusing on the deal.
The inquiry had previously heard Sinodinos was brought onto the board because of his Liberal party connections as the company anticipated a switch to a Liberal NSW government in 2011.
Sinodinos revealed on Thursday that he did not tell the NSW premier, Barry O’Farrell, or the then finance minister, Greg Pearce, he stood to make between $10m and $20m from the PPP when he lobbied them for it.
Pearce said in an email he felt “overlobbied” by AWH, citing Sinodinos as one of the people calling him about it, and a meeting was eventually set up between Di Girolamo and O’Farrell.
Sinodinos said he did not reveal the extent of his interests in AWH when lobbying them because “they didn’t ask”.
“I made all necessary declarations,” he said.
When asked if he should have declared the “massive” gain he stood to make from the PPP, Sinodinos said: “It didn’t occur to me that needed to be done.”
Asked if he was hired by AWH because of his connections in the Liberal party, Sinodinos said he had built up connections across the political spectrum and in business circles since the 1980s.
When asked if pressure was being brought to bear on senior Liberal politicians in 2011, Sinodinos replied: "Well, representations were being made, yes.”
Sinodinos earlier said he did not inquire as to why AWH’s expenses had soared from about $200,000 a month to $600,000 a month after Sydney Water expressed concerns about its bills.
Former Sydney Water chief executive Kerry Schott had previously told the inquiry she had warned Sinodinos about the state of the company’s finances. Sinodinos said he did not have that recollection of the meeting with her.
When asked if he could deny Schott warned him about AWH’s expenses, Sinodinos replied: “I can’t recollect whether she said it or not.”
He said he had not reported the meeting to the board of AWH as he “didn’t think it relevant”.
“What I took out of the meeting was that we should take a softly, softly approach in dealing with this expenses matter in order that we might be able to make sure we don’t the throw baby out with the bathwater in relationship with Sydney Water … including the PPP,” he said.
Sinodinos told Icac that, while part of his job was to have a detailed knowledge of the finances, he had not asked anyone why the expenses to Sydney Water were increasing.
“Not specifically, no,” he said when asked if he had done anything to try to reduce costs.
When asked why, he said he had been more concerned about what costs were attributable to Sydney Water rather than why they were increasing.
Sinodinos was on a $200,000 salary for what Watson calculated was between 25 and a half and 45 hours of work a year.
When asked if he thought that was a lot of money for the work he was doing, Sinodinos replied: “The fact I took the salary indicated it was reasonable from my point of view.”
Sinodinos has stood down as assistant treasurer while the inquiry takes place.
