SENIOR LABOR FIGURES WERE WARNED ABOUT THE DANGERS OF OBEID, THOMSON AND SLIPPER AND YET THEY DID NOTHING, WRITES STEVE LEWIS

We met in a quiet inner-Sydney cafe, close to midday, just the two of us. It was the mid-1990s and my Deep Throat, now one of Labor's most senior federal operatives, claimed to have ``dirt'' on a man he considered, even then, to be an explosive risk for the ALP brand -- Edward Moses Obeid.

He handed me a file, a series of clippings and notes of relatively minor alleged indiscretions involving Obeid, then a backbencher in the NSW parliament. If there was scandal, it was pretty low-level stuff but the message was unmistakable: this bloke needs to be watched -- closely.

As Julia Gillard spent the week in western Sydney trying to revive Labor's declining support base and as the ALP prepares for an election that, based on current polling, will be a bloodbath, party hardheads concede the Obeid factor is contributing to voter turn-off. Senior Liberal figures also claim the odour from the NSW corruption hearings is being felt across state boundaries.

One senior Coalition figure says that, in terms of electoral impact, Obeid had "become the Brian Burke of the east coast''.

Labor Inc is on the nose. The stench of the current Independent Commission Against Corruption hearings is sweeping across the political landscape, helping cement the already low level of public opinion which one Labor MP sums up in four words: "Rotten to the core.''

Yet the ALP knew a decade and a half ago that Obeid was a high-risk proposition. He could have been stopped, his career path through the ALP halted, if people of principle and integrity had stepped in. Instead Labor Party elders helped to grease his political climb as his influence grew. It has since been reported that he was "sponsored'' by the all-powerful fixer Graham Richardson and former premier Bob Carr felt obliged to make him a minister in the mid 1990s before Carr felt emboldened enough by his own standing in the polls to dump him from the ministry in 2003.

When Carr resigned two years later -- which some link to the Obeid dumping -- he was replaced by Obeid's choice of Morris Iemma. Obeid was a kingmaker -- and unmaker -- of unrivalled power.

But the final result of Obeid's rails run to the top of the ALP is plain to see. The corruption hearings in Sydney have seen a barrage of negative headlines revolving around allegations that Obeid and his family just happened to be in the right place at the right time to take advantage of neat political deals.

In one early, colourful burst, counsel assisting ICAC said the alleged wrongdoing was on a scale not seen since the colonial-era rum corps.

Now there are real-time fears within federal Labor that the Obeid case will devour its former stronghold of western Sydney and wipe out some of the ALP's most senior figures -- such as Tony Burke and Chris Bowen and future leaders such as Jason Clare and Ed Husic.

While Prime Minister Julia Gillard's unpopularity is a key factor in Labor's dire standing, there is no question the Obeid factor -- coupled with the allegations that have engulfed Craig Thomson and Peter Slipper -- are twisting the knife into Labor's election chances.

It is impossible to quantify just how badly the unholy trinity of Obeid, Thomson and Slipper is impacting on the ALP's plummeting primary vote, particularly in western Sydney.

But what is most galling for the party and electors alike is that in each case the ALP should have and could have taken steps to avoid the embarrassing position it finds itself in.

This is Labor's election-year perfect storm -- scandal after scandal that by their very existence is tarnishing the Labor brand. And yet, how different it could have been . . .

In the lead-up to the 2010 federal poll, none other than Richardson himself tried to warn Labor's chieftains about the raft of allegations surrounding Thomson, as he sought pre-selection for the NSW central coast seat of Dobell.

The former Health Services Union boss had won the seat in 2007 at the Rudd-slide election.

Less than two years later, in April 2009, allegations that Thomson had used a union credit card to pay for prostitutes, family travel and other unauthorised and inappropriate spending were made public.

The MP immediately and resolutely rejected the allegations, claiming to be the victim of a dirty, internecine union feud.

While Thomson and his Sydney-based lawyer Chris McArdle protest the MP's innocence, the fact he is facing 154 charges of fraud and theft -- criminal charges that carry a potential jail term -- is a gift for the Liberals, who are already featuring the MP in pamphlets under the not very subtle headline "Thomson Scandal''.

Then there is the court action resulting from Fair Work Australia's three-year investigation. These are civil proceedings, not criminal, and also revolve around his behaviour as HSU boss, from 2002 and 2007.

While they refer to matters in some cases more than a decade old, they are causing major heartburn for Labor as it faces an election which many in its ranks fear will be worse than Paul Keating's loss to John Howard in 1996.

For good measure, Thomson, who was suspended last year by the ALP and sits in federal parliament on the crossbenches, is also embroiled in allegations involving a NSW police investigation which has already laid charges against one-time Labor national president Michael Williamson.

Williamson, a former HSU president, is alleged to have received secret commissions from a supplier to the union, printing firm Communigraphix.

Police allege the printing firm, whose relationship with the union stretches back a decade, supplied black American Express cards to Williamson.

And Peter Slipper? When the former Liberal MP was appointed parliamentary speaker in November, 2011, senior government ministers fell about the place, delighting in the discomfort of the opposition, feeling smug after securing another precious vote to help bolster the minority government.

He should never have been appointed.

The Queensland MP was an accident waiting to happen. His regular run-ins with the Department of Finance over his parliamentary expenses had been well documented.

Again, Slipper has turned out to be an own goal, as numerous commentators (and wiser Labor MPs) warned, even as the PM's inner circle gave each other high-fives over the appointment.

The Member for Fisher is due back in the ACT Magistrates Court on March 25, where he will be formally charged with "dishonestly'' using taxpayer-funded Cabcharge vouchers to visit upmarket wineries around Canberra on three occasions in 2010. The Australian Federal Police and Commonwealth Director of Public Prosecutions are in charge of the prosecution and have spent many months preparing their case.

So, when the Prime Minister and her Labor colleagues return to Canberra next week to face another bout of leadership speculation, they will do so knowing that many of Labor's present political woes are of their own making. No amount of spin can disguise this fact, and the terrible carnage that has already flowed was evident when voters turned their sights on Labor at the 2011 NSW election.

"They've done us enormous damage,'' says one of Labor's more sensible federal MPs as he surveys a political landscape that is likely to become the ALP's killing fields.

But no one can say the party wasn't warned.



Originally published as Tick, tick, boom