ICAC: Port Stephens MP Craig Baumann stands aside after admissions on developer donations

Updated

Craig Baumann has become the 10th Liberal parliamentarian to go to the crossbench or resign from the party in NSW as a result of an inquiry into alleged illegal donations.

Earlier Friday, the Member for Port Stephens admitted to the Independent Commission Against Corruption in Sydney that he had taken secret donations from developers during his first tilt at state politics in 2007 and written sham invoices to cover up the payments.

His appearance follows claims he facilitated a payment from development firm Buildev to a campaign staffer.

ICAC commissioner Megan Latham said the watchdog was looking into whether Mr Baumann and his accountant made false declarations to conceal benefits exchanged with developers Hilton Grugeon and Jeff McCloy.

The Port Stephens MP was repeatedly asked who paid for his 2007 and 2011 election campaigns.

Mr Baumann told ICAC that Hunter Ready Mix Concrete, which was owned by Hilton Grugeon, made the largest donation to his 2007 election campaign.

When asked if he declared that money, Mr Baumann replied, "I inadvertently made a dishonest declaration and I apologise."

Mr Baumann admitted he created sham invoices to disguise money being donated to his 2007 election campaign by Mr McCloy and Mr Grugeon.

He admitted developers Hilton Grugeon and Jeff McCloy gave $79,000 to his 2007 election campaign, but he falsely declared the money had been donated by his own company.

It was 2007 and I mucked up a couple of disclosures, and I do apologise. Port Stephens MP Craig Baumann

Developer donations were not banned at the time but Mr Baumann conceded he ordered false invoices be drawn up to cover up the payments because both developers stood to make a lot of money from a favourable decision about the subdivision and rezoning of the Wallalong Urban Release Area.

At the time Mr Baumann was on Port Stephens Council.

But Mr Baumann denied he had ever made favourable decisions because of the donations.

Baumann used electoral donation for tax avoidance, ICAC hears

ICAC also heard allegations Mr Baumann avoided paying tax by having his accountant, Vincent Heufel, donate $100,000 to his 2011 election campaign rather than paying his company, Valley Homes, for a house it was building for Mr Heufel.

ICAC was told Mr Heufel gave $100,000 to the Liberal Party in lieu of making a final payment on the home.

When asked if he was getting a "sham donation", Mr Baumann replied that he "had no intent to mislead".

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Mr Heufel also gave evidence about the $100,000, saying he told Mr Baumann, "I'll give you $100,000 for your campaign and take the value off the house."

Mr Heufel admitted that it would have been more honest for Mr Baumann to have paid in the money himself.

Both witnesses denied they organised the payment to ensure Mr Baumann's company Valley Homes did not pay tax on the donation.

Earlier, outside the hearing, Mr Baumann said he did not believe he had done anything wrong.

"It was 2007 and I mucked up a couple of disclosures, and I do apologise," he said.

Secret donations? 'It does look like that,' says McCloy

Mr McCloy briefly returned to the witness box Friday morning to explain whether he paid funds into Mr Baumann's 2007 election campaign and if he could remember why it was done.

"No I can't remember," he told the inquiry.

Mr McCloy said Mr Baumann wanted funds for his election campaign.

He told the hearing the reason none of his companies declared the payment was because he did not like putting his name against any political donations and that it was a way of getting around that.

When asked whether it looked like he was making secret donations to a powerful politician in the Port Stephens area, Mr McCloy said, "It does look like that."

Sinodinos did 'nothing' to ascertain identity of donors

Meanwhile, federal senator Arthur Sinodinos has denied any knowledge that money being given to the NSW Liberal Party's 2011 election campaign was coming from prohibited donors.

Senator Sinodinos stood aside from his role as the assistant treasurer in March, saying he did not want the ICAC probe to be a "distraction" for the Federal Government.

He is the former chairman of the NSW Liberal Party's finance committee.

ICAC was told last week that Senator Sinodinos was present during a Liberal Party meeting that discussed how to deal with a NSW ban on political donations from property developers.

The party's finance committee considered the idea of funnelling donations through the Canberra-based Free Enterprise Foundation as a way around the ban.

Liberal Party fundraiser Paul Nicolaou told the ICAC hearing he put forward the idea but then left it with the committee members.

I look forward to getting back to my work as part of the Abbott team in Canberra and helping to make the country an even better place. Senator Arthur Sinodinos

Mr Nicolaou said Senator Sinodinos was at that meeting as well as the then-Liberal Party state director in NSW, Mark Neeham.

Counsel assisting the inquiry Geoffrey Watson SC asked Senator Sinodinos if he knew at that time that money coming from prohibited donors, that was sent to the Free Enterprise Foundation, came back to the NSW Liberals.

"My answer to that is no," Senator Sinodinos replied.

The senator was also been asked whether he took any responsibility if property developers' money was used by the party in the 2011 election.

"I don't accept any responsibility for money being raised by prohibited donors," he responded.

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Mr Watson asked the senator what he did to ensure that the money was raised lawfully.

"We were provided with reports by a party agent," he replied.

He then added that any discrepancies would be referred to the Electoral Funding Authority (EFA).

Senator Sinodinos said he did "nothing" to ascertain the identity of donors.

Outside the hearing, Senator Sinodinos said he had not been found to be corrupt and he looked forward to returning to Parliament.

"I look forward to getting back to my work as part of the Abbott team in Canberra and helping to make the country an even better place," he said.

Mr Neeham resigned from the role last year and said he was seeking "new challenges and a new role" after 10 years with the Liberal Party.

Senator Sinodinos appeared before ICAC in April to discuss his involvement in a company called Australian Water Holdings (AWH).

He was a director of AWH from October 2008 until November 2011, which included a 12-month stint as the company's chairman.

ICAC is looking into allegations that between 2004 and 2012, AWH falsely billed Sydney Water for expenses on an infrastructure project and used the money for executive salaries and political donations.

The company had links to disgraced former NSW Labor MP Eddie Obeid.

Topics: corruption, political-parties, state-parliament, newcastle-2300, sydney-2000, nsw

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