Originally broadcast on 7.30 Report 2nd September 2019

GEOFFREY WATSON, BARRISTER: The issues at stake here go way outside the borders of New South Wales. This is an Australia-wide question.

PAUL FARRELL, REPORTER: In March 2015 New South Wales Labor was hosting a dinner for supporters in the Chinese community.

KATE MCCLYMONT, SYDNEY MORNING HERALD JOURNALIST: There were 600 guests and there was a keen competition to sit at the top table.

PAUL FARRELL: It was billed by New South Wales Labor as an opportunity to meet top political figures.

KATE MCCLYMONT: The top table had the then Labor leaders Bill Shorten federally, Luke Foley state.

PAUL FARRELL: And to build a war chest for the upcoming state election.

Sydney Morning Herald journalist, Kate McClymont is watching the corruption inquiry closely.

KATE MCCLYMONT: A month after the dinner, a $100,000 payment came in.

PAUL FARRELL: At first glance, this payment appeared to be a series of smaller $5,000 donations from 12 separate individuals.

What’s now being alleged in the corruption inquiry is that these donors were a front.

These receipts were designed to conceal how and when the donation was made and who handed over the cash.

KATE MCCLYMONT: The inquiry has heard that straw donors had given the money.

Now, they looked at their occupation, they accessed their tax records and realised that some of them, the $5,000 actually represented a third of their entire after tax salary.

PAUL FARRELL: It’s been alleged by a New South Wales Labor official that this man, Chinese national and property developer, Huang Xiangmo, is really behind the $100,000 donation.

KATE MCCLYMONT: One of the most extraordinary pieces of evidence to emerge is the claim that Mr Huang arrived at the Labor Party Sussex Street headquarters with an Aldi shopping bag crammed with $100,000 cash.

GEOFFREY WATSON: Property developers cannot give money to New South Wales political parties for an election campaign.

The small donations were made, this is the allegation, in a way so to disguise that they ultimately came from a property developer.

PAUL FARRELL: Mr Huang has been a major player in Australian political circles.

GEOFFREY WATSON: Mr Huang is personally known to all of the major leading politicians, not just state but also federal, and not just Labor, but also Coalition.

PAUL FARRELL: Earlier this year it emerged his permanent residency in Australia had been cancelled.

GEOFFREY WATSON: He’s been excluded from Australia by ASIO. He’s no longer allowed to return.

PAUL FARRELL: Huang said in a statement at the time that the decision to cancel his visa was based on unfounded speculations that were prejudiced and groundless.

Kaila Murnain, who was the secretary of New South Wales Labor, told the inquiry that she became aware of the true source of the donation on 16 September, 2016, when she was told by then Labor MP, Ernest Wong.

KATE MCCLYMONT: So that evening at about 6:45, she met with Ernest Wong behind New South Wales Parliament House.

Her evidence was that Ernest Wong was distressed and shaking.

When Kaila Murnain became aware of that donation, she went into a complete panic.

PAUL FARRELL: She claims she called then federal Labor MP, Sam Dastyari to seek his advice.

KATE MCCLYMONT: She gets in to Sam Dastyari’s car, they then spend an hour or so driving around the Sydney CBD, while she is sobbing, relaying to him what she had just heard.

PAUL FARRELL: The timing and location of this meeting is in dispute.

Sam Dastyari told the inquiry he advised her to speak with the Labor Party’s lawyers.

Ms Murnain alleges she then met with Holding Redlich managing partner, Ian Robertson.

KATE MCCLYMONT: Ms Murnain has given evidence that her legal advice was stay silent, say nothing and forget about the whole thing.

Now we haven’t heard from Ian Robertson, who is the Labor Party’s lawyer so at this stage we’ve only got one side of this alleged conversation.

PAUL FARRELL: In a statement, Holding Redlich said Ian Robertson had the firm’s full support and that his lawyers had requested to cross-exam Ms Murnain.

One of the alleged straw donors was expected to give evidence but never made it to a hearing last year.

KATE MCCLYMONT: One of the most tragic aspects of this inquiry is that Dr Quanbao Liao, otherwise known as Leo Liao, took his life only hours before he was due to arrive at the corruption inquiry to give evidence in Canberra.

PAUL FARRELL: In a hearing today, former New South Wales MP, Ernest Wong, denied he had engaged in a scheme to procure false donation records or that he arranged for Mr Huang to deliver $100,000 to Labor’s head office.

He told the corruption inquiry that Mr Huang had offered to take the money raised from other donors to the party’s headquarters.

GEOFFREY WATSON: This inquiry isn’t about $100,000 in cash in a Aldi bag. It is not about that at all.

PAUL FARRELL: Barrister, Geoffrey Watson has previously been counsel-assisting in corruption inquiries.

GEOFFREY WATSON: The whole of Australia should be watching this with eagle eyes because this is a really important point that’s being debated here.

It’s talking about the influence exerted over an Australian election by the Chinese government, if it goes that high.

That’s what we’ve got to look at. Does it go that high?

PAUL FARRELL: He’s now a director for the Centre of Public Integrity that is campaigning for a federal anti-corruption body.

GEOFFREY WATSON: It’s a very sad moment in watching this to think if this same sort of conduct was occurring in a federal election, there is no properly equipped federal agency to look at the anti-corruption aspects.

We need a federal, a national integrity commission. We need it now.