Gallacher refuses to deny the claims levelled against him, saying: 'I don't even know what the allegations are'

This article is more than 6 years old

This article is more than 6 years old

Mike Gallacher has resigned as New South Wales police and justice minister, pending an investigation of his alleged role in "hatching a corrupt scheme" to funnel illegal donations to the Liberal party.



Gallacher’s barrister made the announcement after the Independent Commission Against Corruption (Icac) heard that the Liberal minister and Darren Williams, a development manager at Nathan Tinkler's Newcastle property developer, Buildev, together devised a scheme to make payments to a fake political consulting agency, Eightbyfive. The money would be passed on to the Liberal party in contravention of electoral fundraising laws, the inquiry heard.



The payments were made by Tinkler's stud farm, Patinack Farm, to Eightbyfive, an entity run by Tim Koelma, an associate of the former NSW energy minister Chris Hartcher.



"I have made the decision that I should not remain in this office whilst such a serious allegation has been made against me," Gallacher told a press conference at parliament house in Sydney.



"In order to allow the government and parliamentary team not to be distracted by these events, particularly in the upper house, I have made the decision to resign from my position as minister for police and emergency services, industrial relations, and the central coast effective immediately," he said.



Gallacher refused to deny the claims levelled against him, saying: "I don't even know what the allegations are.



"I have been summoned to give evidence before the commission and I am waiting my turn to be called."



He said he was "disappointed" that the first he or his lawyers had heard of the corruption claims was on Friday morning.



The NSW premier, Mike Baird, said: "Today I have accepted the resignation of the minister for police, the Hon Mike Gallacher, following allegations made at the Independent Commission Against Corruption.



"I make no judgment regarding those allegations. However, it could take considerable time for them to be resolved, and this would constitute an unacceptable distraction for my government. We need to be completely focused on delivering results for the community."



Gallacher’s resignation came after Icac was shown an email sent by Williams to another Buildev executive, David Sharpe, asking: "Which entity will I give Mike Gallagher (sic)?"



Sharpe replied: "Ask Nathan as I think it's best to come from Patinack to get right away from property mining infrastructure."



Donations from property developers such as Buildev to NSW political parties had been banned since 2009.



Williams said he could not recall what the email was about.



Counsel assisting the inquiry, Geoffrey Watson, SC, then put to him: “It was between the two of you [Williams and Gallacher] that you hatched a corrupt scheme to make political donations to the Liberal party using the Eightbyfive business, didn’t you?”



“No,” he replied.



“Well I can tell you by the end of this you’ll regret having given that answer,” Watson said.



Gallacher's barrister at one stage attempted to stop the proceedings, saying his client had not had advance warnings that the allegations would be made. Gallacher wanted the opportunity to inform Baird that he would be named at the inquiry, his barrister said.



Watson said the information implicating Gallacher was only received by Icac on Thursday afternoon, and was sufficiently serious that the commission would have to eventually adjourn to investigate further.



The commission heard that in the lead-up to the 2011 election, monthly payments totalling $66,000 were made in the name of Patinack Farms to Eightbyfive, purportedly for marketing services.



Though the money was charged to Patinack Farms, the invoices were emailed to Williams at his Buildev address, and phone and email records showed frequent contact between the Tinkler executive, Gallacher and Hartcher.



Williams insisted the invoices from Koelma were emailed to his Buildev address only because Tinkler's office was "unorganised" and the stud farm's chief financial officer, Troy Palmer, was difficult to reach.



“You were paying good money to get good access to politicians,” Watson said.



"I always got good access to politicians,” Williams replied.



Forwarding one invoice from Eightbyfive, Williams wrote to Palmer: “Mate can you get these payments to Tim the Liberal party please mate as there (sic) 2 months behind.”



In an email sent just before the 2011 state election, chasing up a late payment to Eightbyfive, Williams told Palmer: "Two more months mate and then its (sic) done."



Watson said the payments to Eightbyfive would stop after the election because by that time the Liberals would no longer need to raise funds so aggressively, and the scheme would have “lost its purpose”.



“The timing is perfect,” he said.



Still Williams denied the money given to Koelma was a donation to the Liberal party, maintaining that he believed Eightbyfive was a “genuine marking company”. But he conceded that he knew that finding business for Koelma would help Buildev cultivate a positive relationship with Hartcher.



“I just thought it would strengthen our relationship with Mr Hartcher ... because we had helped out one of his colleagues,” he said.



When Baird was asked about Gallacher earlier on Friday at a press conference at the Coag premiers’ meeting in Canberra, the prime minister blocked him from answering.



"This is a Coag press conference. I'm going to rule that question out of order," Tony Abbott said.