John Menadue. This is about more than a bottle of wine.

To mix my metaphors, the bottle of red wine that Barry O’Farrell received is only the tip of an iceberg – a sleezy world of lobbying, influence-peddling and corruption.

It is really about the covert influence of political power players in undermining our democratic system. No wonder there is a growing alarm.  People with money and power have access to decision-makers and with influence and outcomes that the public is not aware of, or at least until it is too late.

Nick Di Girolamo was doing more than slipping a $3,000 bottle of Grange Hermitage. He is at the centre of a searching ICAC investigation into the lobbying activities of Australian Water Holdings which sought a billion dollar contract with the NSW government. He was also a major fund-raiser for the Liberal Party. Barry O’Farrell didn’t send just one personal note of thanks to Di Gerolamo. He had ten meetings with him. They called each other by phone once a fortnight with speed dialling.

We have seen the awful underbelly of the ALP in NSW. Now we are seeing the sleazy underbelly of the Liberal Party.

We should consider the relationship between Barry O’Farrell and Di Girolamo in the context of the widespread pattern of privileges dealt out to powerful insiders.

  • The concessions to James Packer without due process for his high-rollers casino at Barangaroo. There was no tender process and no genuine community consultation. A deal was fixed by lobbyists for the insiders
  • The banks and the financial advising industry through lobbying persuaded Arthur Sinodinis to skew the finance advising sector in their favour.
  • The Rudd Government was abysmal in its handling of the super profits tax for miners, but the Australian Mining Council and the big miners, for an investment of $22 million in advertising and lobbying saved the mining industry over $60 billion in tax over ten years. I don’t know that we have ever had a heist like this in our history.
  • The polluters and their lobbyists are successfully rolling back the penalties that they should be paying for the pollution that they put into the atmosphere. They are despoiling and violating our fragile planet.
  • All political parties are at the beck and call of the alcohol and hotel lobby. It took months for the O’Farrell government to take action against alcohol-fuelled violence. Right to the end O’Farrell was unwilling to make the trading hour changes that had been so successful in Newcastle. Alcohol sponsorship dominates our major sports. We have a ‘war’ on illegal drugs but the alcohol industry causes much more damage than illegal drugs. But the alcohol industry prevents effective government action against the alcohol industry. And guess who is the Chief Executive of the NSW Hotels Association? It is Paul Nicolaou who was engaged by Australian Water Holdings as a lobbyist in 2007.At that time he was Chairman of the Millennium Forum, the NSW‘s Liberal Party’s major fund raising body.
  • The gambling and clubs industry lobbying effectively stopped attempts to curb problem gambling.
  • The superannuation industry is relentless in its lobbying to defend the taxation concessions for superannuation which Treasury advise cost $ 32b p.a. These concessions massively favour the wealthy.
  • The health lobby – the AMA, the Pharmacy Guild of Australia, Medicines Australia and the Private Health Insurance industry oppose almost every government attempt to reduce wasteful health expenditures and improve efficiency. They are the rent seekers par excellence. The problem is not with Medicare. The problem is with the vested interests who exploit Medicare. The AMA opposes almost all attempts to modernize the 19th century work practices that are widespread in the health sector. The Pharmacy Guild is vehemently opposed to competition. Medicines Australia charges $2b more p a compared with what New Zealanders pay for the same medicines. And our PHI companies undermine Medicare and receive a $5b annual subsidy, far more than the auto industry received. The health lobby has all politicians at their beck and call.
  • Senator Nash survived as Assistant Minister for Health after it was revealed that she had ordered the Department of Health to take down its junk food rating website.  We found out later that her former Chief of Staff had a shareholding in a firm that lobbied for junk food companies.

Professor Ross Garnaut expressed his frustration about the powerful vested interests who are imperilling good policy development in Australia, particularly in the climate-change area. He described these lobbyists and vested interests as representing a ‘diabolical problem’. They are blocking the necessary but politically difficult paths of reform.

The former head of the ACCC Graeme Samuel warned recently that “a new conga line of rent seekers  is lining up to take the place of those that have fallen out of favour’ with the change of government in Canberra

What can be done to turn back the insidious rent seeking culture that lobbyists are driving?

We have a register of lobbyists in Canberra and most states, but it is woefully inadequate as events in the ICAC show.

First, we don’t have any information about who ministers and officials are dealing with. Their diaries should be publicly available, showing details of all major matters discussed between ministers/officials and lobbyists. This information should be publicly available within ten days of any such contact or meetings – either direct or indirect.

Secondly, the lobbyist register in Canberra, for example, includes over 900 full time lobbyists but it does not cover firms and organisations who directly lobby, e.g. Minerals Council of Australia, AMA, Business Council of Australia and the PHI industry. In almost all cases these major organisations do not employ third party lobbyists but influence ministers and officials directly. This is a gaping hole which needs to be addressed if we are to achieve transparency on the role of influence peddlers. These in- house lobbyists are not registered yet they are far more powerful.

Third, we need improved disclosure of political donations as a result of the High Court decision. Disclosure of political donations should not be for individuals only but for companies and other organisations.

Fourth, ministers and senior officials should be prohibited from employment and lobbying for at least 3 years with firms and interests that they had dealings with as ministers or officials.

It should not be left to occasional interventions by the ICAC and their counterparts in the other states. We need a root and branch review of how powerful people and organisations are able to bend public life to their benefit. We usually only find out when we are confronted with a fait accompli, like Barangaroo.

We face an enormous problem that goes far beyond a bottle of Grange wine. There is a seething mess of influence peddling by vested interests who are winning the day at the public expense.

Unfortunately we only get a glimpse of this dark underworld by occasional disclosures by the ICAC or similar bodies.

(See also my blogs of January 24 ‘The scourge of special interests’ and February 14 ‘Corporate bullies.)

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Simon Warriner

John, I applaud your efforts but they are missing the vital organs that need to be hit if we are to destroy the beast. The fundamental problem is “party politicians”. These individuals begin their political activities by swearing allegiance to a party while standing for election on the premise that they are going to represent an electorate. With that act they declare either 1: that they do not understand conflicted interests or 2: that they do understand conflicted interests but are prepared to behave dishonestly. Once in power that combination of ignorance and dishonesty is applied to the task of… Read more »

You say stop complaining and do something about.. what exacty? The system is so corrupt, how could you change it?

Go into politics? You then become part of the problem. Many a young idealist has been consumed by the system rather than changing it. The very nature of the system is such that it becomes self protecting. No one individual can make a difference.

So what is the answer? What do you do?

It seems to me that this article is a very important turning point in our national debate regarding chronic corruption and criminal doings by people in high office. My take on the background of this is more international and constitutionally disruptive. The early conservatives of the fifteenth century, were monarchists who considered democracy a threat to social order and the seas were ruled by buccaneers and privateers. Buccaneer is a colourful name for the pirates of old who pursued personal fortune with rules of their own making. They were, in their time, an iconic expression of “free market” capitalism. This… Read more »

John Holznagel

This is about more than the NSW ICAC as well. Did the LNP in Queensland or did it not brag at a parliamentary hearing into the CMC about wanting the CMC with it cronies and doesn’t the LNP want to water down its powers? After all the CMC is our corruption watchdog. Plus Campbell Newman was named in evidence at ICAC. It appears the bad ol’ days of Joh are retuning. There might be some truth in what Clive Palmer said (paraphrasing) that Mr Newman is in big trouble.

Unfortunately, a lot of Australians have no idea this is happening because ‘politics’ turns them off. If these anti-democratic practices were stamped out, we might finally get better health systems, better public education, better public transport and good policy responses to climate change and asylum seekers.

Mick

It all started when one guy and a few of his mates controlled the best part of the forest where bears could be killed to feed the family. If people from your cave wanted to hunt bears in the best part of the forest, then you gave that control guy the best parts of any bears you caught. And so it evolved down through the ages, where there was always that small group who wanted to have control over the majority. Not for the benefit of the majority, but for their own benefit. To feed their greed. These are the… Read more »

Such an informed and balanced commentary