Former Labor boss denies she threw the party’s lawyer under the bus to cover her ‘own backside’

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This article is more than 1 year old

The suspended New South Wales Labor boss, Kaila Murnain, has been accused of “fabricating a story”, crying “fake tears” and throwing the party’s lawyer “under the bus” by alleging he told her to keep quiet about an explosive donations scandal.

Murnain was stood aside as NSW Labor general secretary last week, after evidence to the Independent Commission Against Corruption claimed that she had known as early as 2016 of large donations from a banned donor, Chinese billionaire and property developer Huang Xiangmo.

Murnain says she approached Labor’s lawyer, Ian Robertson, for advice soon after learning about the unlawful donations from former state MP, Ernest Wong, in September 2016.

She says Robertson told her “don’t tell anyone about it” and “don’t record this meeting. Don’t put it in your diary. Forget the conversation happened with Ernest”.

On Thursday, Murnain underwent a fiery cross-examination by Robertson’s barrister, Tony McInerney, SC.

McInerney described Murnain’s story as “nonsense”, saying Murnain knew the donations scandal was explosive, that at least five people had knowledge of it, and was likely under investigation by electoral authorities.

Byelections were also looming in NSW and journalists were investigating Huang Xiangmo’s links to the Labor party at the time, the inquiry heard.

That made it “absurd” and “implausible” that Robertson would tell her to keep quiet.

“You just thought he’d pull the pin on a grenade, clutch it to his chest, and blow himself up, is that what you’re saying?” McInerney said.

McInerney accused her of fabricating the story and throwing the party’s lawyer “under the bus” to “colloquially cover your own backside”.

“If you think this is some made up story to throw someone under the bus, you’re kidding yourself because this is not easy,” Murnain responded.

Murnain then broke into tears.

“They’re fake tears aren’t they Ms Murnain?” McInerney said. “They’re not real.”

Murnain responded:

“Everything about this is true and real and it is not easy.”

Icac is investigating whether, in April 2015, Huang handed then Labor boss, Jamie Clements, an Aldi bag filled with $100,000 as payment for seats next to Labor leaders Bill Shorten and Luke Foley at a fundraising dinner several weeks earlier.

It is alleged the unlawful donation was then covered up using a series of false donation records from 12 straw donors who claimed to have given Labor 20 donations of $5,000.

Murnain was first called to give evidence in private to Icac in July 2019, but was “less than forthcoming” during the examination.

Former boss visited Icac witness's home on day he was summonsed to deliver 'festive greetings' Read more

The commission heard on Thursday that she had not revealed the existence of the 2016 meetings with Wong or Robertson.

She also failed to disclose a meeting with Sam Dastyari, then a Labor senator, who she says picked her up after her meeting with Wong, and urged her to seek advice from Robertson.

Murnain conceded on Thursday that she had not done the right thing in her first evidence to Icac. She became emotional when asked why she had failed to tell all she knew.

“I’ve never been through ... through a process like this before,” she said. “Afterwards I couldn’t sit there and not say something, so that is why I came back.”

Murnain came back for a second private examination with the commission, and was far more forthcoming. She denied she had done so because she knew the full story would come out regardless.

Murnain said she was giving evidence in “as I’m sure you know, very intimidating circumstances”.

She said she had focused her evidence on the 2015 fundraising dinner, rather than subsequent meetings.

“I wanted to come forward and do the right thing,” she said. “It wasn’t the easy thing. But it was the right thing.”

Murnain said she only met Huang in early 2016, when she was sent to meet him to help raise federal funds. She said she was sent by shadow treasurer Chris Bowen and Dastyari.

“[They] wanted me to meet with Mr Huang so I could ask him for federal donations,” she said.

Huang was not barred from donating to federal parties.

Murnain later said she did not believe any party should be receiving cash donations of $1,000 or more from anyone.

“No one should receive cash donations over $1,000 anywhere, from any individual. It’s too hard to manage,” she said. “I don’t think it would hinder anyone.”

Questions remain over the timeline following Murnain’s crucial meeting with Wong in 2016, when she says she first learned of the donation irregularities.

Murnain’s evidence is that she met with an anxious, distressed Wong out the back of parliament on the evening of 16 September 2016, about 6.45pm.

Murnain says she then immediately called her friend and mentor, Labor senator Dastyari. Dastyari was in the middle of his own scandal involving Huang, which had just forced him from Labor’s frontbench.

She says Dastyari came and picked her up and the pair drove around talking about the issue for five to 10 minutes. Dastyari estimates the time of the car trip to be an hour or more.

Murnain says Dastyari told her to go and see Robertson, Labor’s lawyer. She did so, and alleges she was told to stay quiet and forget what she had learned.

Phone records suggest she met with Robertson at about 7.18pm, only 33 minutes after she met with Wong, leaving little time for a meeting with Dastyari. The records also suggest Murnain called Robertson before she met with Dastyari.

“My memory is that I spoke to Sam before I spoke to Ian, none of this changes that,” she said. The inquiry continues before chief commissioner Peter Hall on Thursday.