For 30 years, the political stage has been awaiting the appearance of Arthur Sinodinos – the great hope of the Liberal party and a future treasurer.

On Thursday he stepped on to a stage of sorts at the NSW Independent Commission Against Corruption. This spotlight was not what he, or the Liberal party, exactly had in mind.

The senator – as Commissioner Megan Latham called him – appeared relaxed as he wandered into the media room beforehand, then moved into the hearing room where he stood to the side.

You would hardly recognise him against the grey walls and wood veneer, the unassuming George Costanza lookalike of the Canberra policy world. The irony was excruciating for the man who rose to be John Howard’s chief of staff after a ministerial scandal claimed the scalp of his predecessor Graeme Morris.

Yet here was the master strategist of the Liberal tribe taking up a $200,000 directorship in a company, Australia Water Holdings, which is now being investigated by Icac for billing taxpayer-owned Sydney Water while it was carrying out water and sewage contracts around Sydney.

Worse still that his public humiliation has come about with no accusation of corruption.

At his long-awaited appearance on Thursday, Sinodinos confirmed that he was unaware of $74,000 donations from AWH to the NSW Liberal party while he was both AWH director/deputy chairman as well as treasurer of the state party. Doffing one hat for another, he knew nothing.

Sinodinos also confirmed that while contacting NSW minister Greg Pearce as AWH chairman, he had not mentioned the fact that he stood to make between $10m and $20m if the public-private partnership between AWH and Sydney Water went ahead.

“It never occurred to me that needed to be done,” he said flatly.

Geoffrey Watson SC began the day by laying out his experience, Sinodinos’s early days as an economic adviser to John Howard in the 1980s, his subsequent return to politics in 1995, when he followed Howard from opposition into power. By 1997, he won the unexpected promotion and stayed with Howard until 2006. Observers remember that when he resigned, it was a sign Howard’s days were numbered. Such was his stature.

Sinodinos went on to work for Goldman Sachs, JBWere and the National Australia Bank, because in his own words, he was “looking to build a business career”. He remained intimately involved in the NSW Liberal party executive as president. As it still is today, the NSW division of the party was wracked with factional fighting and in the grip of lobbyists. Sinodinos was sent in to clean it up. He is Abbott’s captain’s pick.

It became clear as Watson delved into Sinodinos’s involvement from his first introductions, to his agreement to take on the AWH directorship, to his rise to the chairman’s role, that the temporarily stood-aside federal assistant treasurer did not appear to be on top of his brief.

The characters rolled off Watson’s silver tongue. There was Liberal party fundraiser and AWH chief, Nick di Girolamo, who allegedly asked Sinodinos to approach state minister Greg Pearce and Barry O’Farrell. There was Paul Nicolaou, the head of the Liberal party fundraising arm the Millennium Forum who, the Icac was told, was getting a $5,000 a month lobbying fee. There was Michael Photios, a former NSW Liberal minister, up until recently on the Liberal state executive, who was also getting $5,000 a month for lobbying, the hearings were told. All this paid by a company which had, Watson said, trouble paying its tax and superannuation obligations.

The players were not just on the Liberal side. Eddie Obeid featured in the hearing for investing $3m in AWH – including at one stage a $400,000 loan of which Sinodinos was unaware. Though he did admit to knowing Obeid’s son Eddie Jr was employed by AWH Queensland.

Watson began wanting to know exactly what Sinodinos was doing for his $200,000 fee, given there were only nine board meetings a year and the company employed 10 people. By Watson’s calculation, Sinodinos had worked between 26 hours and 45 hours a year.

“Does that include travel time?” Arthur asked. “It takes an hour and a half to get to [the AWH office].”

Sinodinos explained there was also work done reading board notes and “bumping into people” in the street and at functions.

“We will add 90 seconds for a chat over a gin and tonic,” Watson quipped. “Did that salary seem a lot to you?”

“I thought it was reasonable,” Sinodinos said, agreeing he took his duty to the company seriously. “Oh good,” said Watson.

The questions were peppered. Did you ever ask to look at the books? Did you ever ask to look at the ledgers? The transaction summaries? Did you ever visit the excavation sites? Sinodinos said that he read the board notes and visited an excavation site once. Well before he came on board. The promotional tour to get you on board, asked Watson? An education and information tour, said Sinodinos.

Then Watson moved on to the dispute over costs charged to Sydney Water attributed to AWH, referred to by Sinodinos as “management and administration costs”. Previous evidence had heard limousines, nights out and of course the donations. Sinodinos said the costs had been incurred before he arrived. Did you ever try to get to the bottom of it, asked Watson? I participated in boardroom discussions, said Sinodinos.

Watson also pressed him on a meeting with former Sydney Water head Kerry Schott. Watson asserted Schott explicitly raised concerns about the ballooning costs.

“I don’t have a clear recollection,” the senator said. According to Sinodinos, the meeting was designed to get a better relationship with AWH, though he did not think it pertinent to mention it to his own board.

Mostly Sinodinos’s answers were short. Occasionally he elaborated, on one occasion, on the “art of politics”. On another, on the “complications and cross-currents” that he faced in negotiating around the dispute between AWH and Sydney Water. At times, Watson was becoming annoyed with his answers.

“Will you concentrate!” he yelled.

By the afternoon, Watson produced documents to show Di Girolamo had asked Sinodinos to contact O’Farrell and Pearce, to try to get a ministerial direction for Sydney Water to negotiate with AWH. Sinodinos said he contacted Pearce but not Barry O’Farrell.

“Why not?” asked Watson.

“Because I understand politics. It was not appropriate,” Sinodinos replied.



Sinodinos had been brought on board to clear the political pipes. By the end of the day, he said as much under examination by his own counsel Tony Bannon. What were you there for?

“I would hope in a business sense I was a door opener,” he said. He was the man to get into the doors of business and excite investors to the possibilities of AWH.

“I put in the effort that was commensurate with that.”

In one day, that legendary door-opening reputation was looking a little worse for wear.

