Treasurer Joe Hockey is offering privileged access to a select group including business people and industry lobbyists in return for tens of thousands of dollars in donations to the Liberal Party via a secretive fund-raising body whose activities are not fully disclosed to election funding authorities.
The Independent Commission Against Corruption is probing Liberal fund-raising bodies such as the Millennium Forum and questioning their influence on political favours in NSW.
Mr Hockey offers access to one of the country's highest political offices in return for annual payments.
The donors are members of the North Sydney Forum, a campaign fundraising body run by Mr Hockey's North Sydney Federal Electoral Conference (FEC). In return for annual fees of up to $22,000, members are rewarded with "VIP" meetings with Mr Hockey, often in private boardrooms.
The North Sydney FEC officials who run the forum – which is an incorporated entity of the Liberal Party – say its membership lists and therefore the identities of its donors are "confidential". Mr Hockey also says details of who he is meeting and what is discussed are confidential.
What little public information is available reveals members of the forum include National Australia Bank as well as the influential Financial Services Council, whose chief executive is former NSW Liberal leader John Brogden.
The FSC's members, including financial advice and funds management firms, stand to benefit from the changes to the Future of Financial Advice (FOFA) laws being considered by the federal government, which would involve a winding back of consumer protections introduced by Labor.
The National Australia Bank would also benefit from the changes.
The chairman of the North Sydney Forum is John Hart, who is also the chief executive of Restaurant and Catering Australia – a hospitality industry lobby group whose members stand to benefit from a government-ordered Productivity Commission review of the Fair Work Act that is expected to examine the issue of penalty rates.
Mr Hart also sits on Prime Minister Tony Abbott's Business Advisory Council.
On Monday, Mr Abbott was asked if he was comfortable with Mr Hockey's fundraising activities during an interview with Channel Nine.
Mr Abbott responded by saying while he had not read the article, "all political parties have to raise money".
"Typically, you raise money by having events where senior members of the party go and obviously they meet people at these events," he said.
"The alternative to fund-raising in this time-honoured way, is taxpayer funding."
Mr Abbott said that in the context of a "very tough" budget, the idea that taxpayers should fund political parties was "very, very odd".
When asked if there should be a federal ICAC, Mr Abbott said that he thought that Canberra had a "pretty clean polity".
"The thing is that we’re going to keep the lobbyists out [of politics]. And the problem that ICAC is exposing is a problem of lobbying, essentially its influence peddling . . . and we’re going to make sure that that has no place whatsoever federally."
Australian Water Holdings
In March, it was revealed a former member of the North Sydney Forum was controversial infrastructure company Australian Water Holdings (AWH), which has been linked to the family of corrupt former Labor powerbroker Eddie Obeid and is under investigation by the ICAC over its attempts to win lucrative government contracts.
When AWH's links to the Obeid family were revealed last year, the North Sydney FEC returned an $11,000 forum membership fee and AWH's membership of the forum was ended. In March, the North Sydney FEC revealed it had returned another $22,000 in membership fees from AWH, whose former chairman is Liberal Party senator and former assistant treasurer Arthur Sinodinos.
Senator Sinodinos stood aside as assistant treasurer in March, after giving evidence at the ICAC about AWH's attempts to win a billion-dollar contract with the NSW government. Before that, he was responsible for implementing the government's FOFA reforms.
During the three years AWH was a member of the forum, the company's chief executive was Liberal fund-raiser and former lobbyist Nick Di Girolamo, whose gift of a $3000 bottle of Penfolds Grange Hermitage to Barry O'Farrell shortly after his March 2011 election win led to his resignation as premier last month, after he gave false evidence to the ICAC.
North Sydney Forum deputy chairman Robert Orrell said he was "sure" Mr Di Girolamo – a close friend of Eddie Obeid jnr, who was employed by AWH – had attended private boardroom meetings with Mr Hockey.
However he was adamant Mr Obeid jnr did not attend any meetings.
The North Sydney Forum was established in May 2009, shortly after Mr Hockey became shadow treasurer in February, by Joseph Carrozzi, managing partner at professional services firm PriceWaterhouseCoopers.
Mr Carrozzi is also chairman of the Italian Chamber of Commerce and Industry in Australia and was a board member of the organisation when Mr Di Girolamo was its chairman.
He said he could not recall how AWH became a member of the North Sydney Forum but denied it was through this link. He said the chamber was not a forum member.
Mr Carrozzi, who said he had known Mr Hockey for 20 years, said he was "honoured to be asked" to establish the forum, which was "essentially there to provide a network and insight for small businesses".
"Members get an opportunity to sit down and chat with Joe. We've had other ministers, state and federal, participate as well."
Mr Carrozzi said NSW Transport Minister Gladys Berejiklian and Premier Mike Baird – until recently treasurer – had participated in the forum's functions for members.
Past forum members include wholesale distribution and marketing firm Metcash and business services group Servcorp, founded by long-time Liberal Party supporter Alf Moufarrige.
In 2008, it emerged Mr Moufarrige had given former treasurer Peter Costello six bottles of Penfolds Grange – reportedly worth about $3000 in total – as a thank you gift for opening a Melbourne building.
Mr Carrozzi said Mr Hockey "sits down regularly" with members of the forum. Mr Di Girolamo "may have attended one or two" meetings with Mr Hockey but Mr Carrozzi stressed "he was certainly not a regular attendee".
He said Mr Obeid jnr was "certainly not at any meetings I attended with Mr Hockey".
Mr Orrell said the forum had had about 12 lunches each year, "typically in a members' boardroom".
"It's genuinely an exchange of information," he said. "Joe just goes around the table and talks about issues."
The North Sydney Forum membership structure offers "full membership" for an annual fee of $5500 for which members are entitled to five boardroom events.
The fee for corporate and business members is $11,000 which offers an extra "VIP boardroom function" while private patrons paying $22,000 enjoy the additional benefit of "10 boardroom events".
Mr Orrell said money raised by the forum was often distributed to Liberal Party marginal seats.
However, the forum does not lodge its own disclosures to the NSW Election Funding Authority.
In its disclosures, the NSW division of the Liberal Party declares membership fees – regarded as donations for the purposes of the election funding act – but does not state they are for the North Sydney Forum. This practice masks who is donating directly to the North Sydney Forum and the identity of its members.
A spokesman for the NSW Election Funding Authority said: "There is no record of the North Sydney Forum in the EFA system."
Occasionally members name the North Sydney Forum in their disclosures to the Election Funding Authority but there is no requirement to do so.
The structure of the North Sydney Forum is based on that of similar vehicles established by other Liberal MPs, such as the Wentworth Forum which was set up for Communications Minister Malcolm Turnbull in August 2007.
The Wentworth Forum was established by former federal Liberal Party treasurer Michael Yabsley to raise funds for Mr Turnbull's re-election to the eastern suburbs seat of Wentworth following a redistribution in 2004 which made it a less safe Liberal seat.
It operated between August 2007 and late 2009 – for six months when Mr Turnbull was environment minister but primarily while he was shadow treasurer and then opposition leader – and gave members access to exclusive functions he attended. It also had a sliding scale of membership fees from $5500 to $55,000.
The Wentworth Forum was based on the Millennium Forum, the Liberal Party's main fund-raising body, which was established by Mr Yabsley in the late 1990s to replicate corporate fundraising practices.
Millennium Forum members are regularly invited to events hosted by NSW and federal ministers.
Last week the chairman of the Millennium Forum, Paul Nicolaou, resigned after ICAC heard allegations it and another entity, the Free Enterprise Foundation, were used to disguise payments from prohibited donors including property donors to bankroll the Liberal Party's campaign to win the 2011 NSW election.
Detailed questions were sent to the NSW Liberal party about the North Sydney Forum, how it operates and why its membership is not disclosed to authorities. A spokeswoman responded that the North Sydney Forum was "covered by the Australian Electoral Act with donations disclosed to the AEC in accordance with the law by the NSW division of the party and funds are used for the work of the party".
Questions were also sent to Mr Hockey inviting him to disclose details of his meetings with members. A spokeswoman responded: "Questions about the function and administration of the North Sydney Forum should be addressed to them. The Treasurer's diary is confidential."
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The story Treasurer for sale: Joe Hockey offers privileged access first appeared on The Sydney Morning Herald.