E12/2107/0821PUB05341 CREDO/SPICER PUBLIC 14/08/2014 pp 05341-5367 HEARING
COPYRIGHT
INDEPENDENT COMMISSION AGAINST CORRUPTION
THE HONOURABLE MEGAN LATHAM
PUBLIC HEARING
OPERATION CREDO AND SPICER
Reference: Operation E12/2107/0821
TRANSCRIPT OF PROCEEDINGS
AT SYDNEY
ON THURSDAY 14 AUGUST, 2014
AT 1.46PM
Any person who publishes any part of this transcript in any way and to any person contrary to a Commission direction against publication commits an offence against section 112(2) of the Independent Commission Against Corruption Act 1988.
This transcript has been prepared in accordance with conventions used in the Supreme Court.
14/08/2014 5341T E12/2107/0821 THE COMMISSIONER: Yes, Mr McCloy, just come back into the witness-box, thank you.
MR WATSON: Before the luncheon adjournment I showed a document to Mr McCloy was taken down from the Council website up at Newcastle. I 10 tender the document. THE COMMISSIONER: Yes. That’s Exhibit Z29. #EXHIBIT Z29 - NEWCASTLE WEBSITE ENTRY ABOUT MAYOR JEFF McCLOY MR WATSON: Mr McCloy, do you know a fellow called Alan Robinson? 20 ---Yes, I do. Now Alan Robinson is a Councillor isn’t he - - -?---Yes, he is. - - - at Newcastle? And is he a member of any political party?---I don’t think so. Does he vote regularly with what’s called the McCloy Group or the McCloy Block?---In the majority of cases. 30 Right. And tell me who paid for Mr Robinson’s how to vote cards, his, his hand bills that were passed to people on election day?---You’ll have to go to my, my, my employee handled both our, our submissions, our - - - See you must have misunderstood my question, I wasn’t so much worried about that. I want to know where the funds came from to print up his how to votes, to have the billboards out the front?---Oh, I see. That sort of advertising. Who paid for that Mr McCloy?---He may have I may have, I don’t know. 40 Well if I suggest to you now that you did, Mr McCloy, would you deny that?---I’d have to check. Did you declare the fact that, sorry, did you declare the fact that you had paid anything on behalf Alan Robinson?---I don’t know. Well, well hold on. We’re getting now an acute point. You were running during the State election weren’t you?---No. 14/08/2014 McCLOY 5342T E12/2107/0821 (WATSON) Right, okay?---I was running in a Council election. It’s a Council election?---Yeah. Wasn’t Mr Robinson running in a Council election - - -?---Yes, he was. - - - at the same time as you?---That’s correct. And see what I’m suggesting to you is that you, Mr McCloy, paid for Mr 10 Robinson’s expenses for his how to votes, for his advertising materials which were available at the election booths. Do you accept that?---I hear that what he was doing was - - - No, I’m sorry. Do you accept that you, Mr McCloy, paid for Mr Robinson’s how to votes and for his - - -?---I may have, I may have, sir. What do you mean you may have? Is that like this may have that you told us during the compulsory examination because that seems to mean absolutely 100 per cent yes?---In the compulsory examination you’re talking 20 to - - - No, okay. I didn’t distract you on it, get back to Mr Robinson? You paid didn’t you - - -?---In the compulsory, let me finish with that please, sir. THE COMMISSIONER: Yes, just let him finish, Mr Watson. MR WATSON: Okay?---In the compulsory examination that you asked me before I came down here to talk about two subject matters, the subject matter I came down here to talk about was Josh Hodges and Luke Grant. At 30 that particular time with regards to Luke Grant I really didn’t know who he was and I told you before I only by Google found out and then once again found out he went to whatever he went. What are you on about, Mr McCloy? THE COMMISSIONER: I think he’s talking about the, about the, the reference to - - -?---That’s correct. - - - he may have in the previous compulsory examination. Can we just 40 return to the present then, Mr McCloy?---Yeah. Thank you, your Honour. What are you saying now in relation to the proposition that you paid for Mr Robinson’s campaign material and, and you say you may have? ---Yeah. Is that, is that because you can’t recollect whether or did or you can’t recollect whether you didn’t?---Both. 14/08/2014 McCLOY 5343T E12/2107/0821 (WATSON) MR WATSON: I mean it’s not as if - - - THE COMMISSIONER: So you don’t, you don’t know one way or the other?---No, I may have, I may not have, my, my employee ran the, the books on both our - - - Campaigns?------ad campaigns. I see?---So he was the returning officer. 10 I see?---So when., when Councillor Robinson decided to join my team, back my vote, et cetera, a change from the previous – my, my CEO or COF ran both our campaigns. All right. So you wouldn’t know without consulting with that person? ---Yeah, well, yeah, that’s correct. All right. Thank you?---I may, I may not have, I don’t know. 20 What could be the circumstances in which you could accidentally pay for Mr Robinson’s expenses?---I don’t know if they’re accidentally or, or deliberately. What, you wouldn’t even know whether you’d done this deliberately?--- When I handed the rollover to, to, to my financial guy to do it I handed that role over to him and he did the paperwork, I wouldn’t have even seen the paperwork after that. You instructed your own staff to use your money to pay for Mr Robinson’s 30 campaign didn’t you?---I may have. What do you mean you may have? It would be a very serious breach of the electoral funding laws if you did do so wouldn’t it?---I don’t know. You were running for Mayor and you were elected Mayor?---Yeah. Did you do anything at any time to try and work out what application the electoral funding laws had to you, Mr Mayor?---No. 40 No. Did you answer? Did you do anything to try and find out whether the laws applied to you?---Yeah, I got one of my employees to be, is it the returning officer, is that what it’s called? Electoral returning officer. No, I’m talking about the electoral funding laws?---Oh - - - Sorry, they’re actually under the Local Government Act, did you do anything to try and work out whether they applied to you?---No. 14/08/2014 McCLOY 5344T E12/2107/0821 (WATSON) All right. Garry Edwards, could I just get some detail there. Now, Garry Edwards was or is the Member for Swansea, is that right?---Yeah. Now you said that Garry Edwards came to you and there was some mention of the 16 Footer, could you give us some detail, did he come to you at a place?---I got a phone call from the election, from, from Garry, he was down the 16 Footer, he wanted to see me, I was just half a kilometre away, he came up to see me, we started, spoke about the election. 10 All right. Let’s just stop. The 16 Footer I take it is a sailing club?---Yeah. A sailing club where?---At Belmont. And so Mr Edwards said he was at the Belmont 16 Footer Sailing Club? ---I believe so. Could he come and see you?---No. Well, what did he say?---He was at the 16 Footer at Belmont and he wanted 20 to see me, I said well, come up now. All right. And so what does that mean going up now, do you live near there?-----Yeah. All right. So you lived how far from the sailing club?---Five minutes. And so he came to you?---Yeah. Did he tell you why he wanted to see you?---I can’t recall. 30 And so when he got there what was the discussion?---Something about the election. And what about the election?---I can’t recall but the end result is I put my hand in my wallet and I gave him about $1,500 towards his campaign. All right. So did he ask you for that?---I can’t recall. Well, you just, then you just palmed it off on him whether he wanted it or 40 not?---The fact is I gave it to him, sir. Yeah, well, please try and - - -?---I can’t. - - - bear with us because we want to know what the legal consequences of this are. Did you say to him look, Mr Edwards, here’s $1,500, I’m going to give it to you for your campaign, did you say something like that?---I can’t recall. 14/08/2014 McCLOY 5345T E12/2107/0821 (WATSON) Did he say anything to you about I need money for my campaign?---I can’t recall, the fact - - - When you gave him the money was his campaign mentioned?---That’s four years ago, I, I, I know the fact that I gave it to him, what the circumstances was, I simply wouldn’t have a clue. Well, did you give it to him in the context of him discussing the election? ---I’ve answered that about five times. I don’t know. 10 You told us earlier that you did – is your memory just getting worse by the second?---It was at election time so the facts are this – it was just before the election, I got a phone call, he comes up to see me, I give him 1500 bucks or so out of my wallet. So it was just cash you had in your wallet?---Yeah. And were you giving him that so that he could for example go down to the butcher’s or go to the racetrack?---No, I hoped it helped him in his, his 20 campaign. Your intention was to give him cash which could be used in his election campaign?---Yeah. At a time when you knew that you were a property developer?---Um- - - Correct?---Not necessarily. What, really, you don’t know whether you’re a property developer?---Well, 30 I’ve explained it out to you five times before. Jeff McCloy doesn’t make Development Applications, he doesn’t make regular Development Applications, Jeff McCloy as an individual is not a property developer. All right. Well, could I just get – I was given this folder, this weird folder at lunchtime. Do you know what it is? Something about Mother Therese. Do you know where that came from?---My staff produced it. Right. Well, did you read the material that your staff put in here?---(No Audible Reply) 40 Did you read the material- - -?---Yes, I did. - - -that was put in here?---Yes, I did. Was this intended to be given to members of the press to impress upon the journos that you’re a good guy?---It was given to the press to tell the whole story of this because what’s happened with the press in this particular case, when people ah, talk about brown paper bags, when people talk about ah, 14/08/2014 McCLOY 5346T E12/2107/0821 (WATSON) ah, Bentleys and, and wealth et cetera, there is a, a quite ah, improper ah, feeling out there by the press and the blogs that I’ve seen about my actions in my life. All right. Okay?---If there’s a grounded action in that and that’s countered by some of the things I’ve done I make no apology for it. Well, here’s an article published in the Newcastle Herald with a photo of you, Mr McCloy. You’re offering a reward for people to dob in vandals 10 where it says, “Fed up with graffiti across inner city Newcastle? Prominent developer and businessman Jeff McCloy has agreed to stump up,” et cetera. Are you denying that you’re a property developer, are you?---Oh- - - Are you denying you are a property developer?---In, there is two senses of property developer, sir. Are you denying that you are a property developer?---There are two senses of it. One, one is the- - - 20 Are you denying that you are- - -?---One is the public- - - - - -a property developer? MR FAULKNER: I object. THE WITNESS: This is ridiculous. MR FAULKNER: He’s got to be allowed to answer. 30 THE COMMISSIONER: Yes. All right. Well, there are two senses that you attribute to the word developer, Mr McCloy. What are they?---One a public perception in terms of the majority of the work I do, a public perception about who that I am, two, there is the legal, legal position in regard to being able to make donations or not donations. There are two different things. All right. So do I take it that you’re drawing a distinction between property developer under the relevant Act and the activity that you undertake- - -? ---I certainly am. 40 - - -as a property developer in Newcastle?---I certainly am. And so what, you deny that you’re a property developer for the purpose of the Act but not for the purposes of your activity?---Some of my, yeah, correct. Some of my companies are not. Right?---I am not, in terms of purpose of the public, yes, I am. 14/08/2014 McCLOY 5347T E12/2107/0821 (WATSON) All right. MR WATSON: I’ve seen an article here, Newcastle Herald, the Weekender, an article on “The Real McCloy.” Colour photo of you, a pair of shorts, where you’re portrayed apparently as a property developer. How do you explain that?---I just have. I must say, this is talking about you personally, have you – and saying that you are a property developer. It’s saying, “In 2008 the property developer 10 has gone on a buying spree.” Did you correct the Newcastle Herald and say you’ve got it completely wrong, that’s not me? MR FAULKNER: Well, I object. The assumption in the question is that he, that to use an expression property developer in that sense was something that was incorrect and in the sense that Mr McCloy has explained, it wasn’t. THE COMMISSIONER: Yes. I appreciate that he’s drawing that distinction, yes, go on. 20 MR WATSON: Well, I think I should tender this folder, including the poem by Mother Therese. #EXHIBIT Z30- FOLDER OF DOCUMENTS PRODUCED BY JEFF MCCLOY TO MEDIA ROOM MR WATSON: Why were you putting a poem by Mother Therese before the press? 30 UNIDENTIFIED SPEAKER: It’s Mother Theresa actually. MR WATSON: Mother Theresa. I take it that’s Mother Theresa of Calcutta?---Yeah, it’s something that’s sat on my desk for 30 years. Right, okay. And that had what to do with $10,000 being passed over in an envelope in the back of a Bentley, what did Mother Teresa have to do with that?---(No audible reply) 40 Were you working from her inspiration when passing over the cash? MR FAULKNER: No, no, just let him answer the question, you asked it. MR WATSON: Well there was no answer. Oh, it’s just rubbish. THE COMMISSIONER: Well perhaps – isn’t particularly helpful, Mr Watson. 14/08/2014 McCLOY 5348T E12/2107/0821 (WATSON) MR WATSON: Thank you, sorry. THE COMMISSIONER: But as I understand it, Mr McCloy, you, you drew inspiration from that poem?---correct. - - - because it expresses a kind of a can do attitude just go ahead and do it no matter who the tractors are, is that a fair summary?---Um, that’s a reasonable assumption. 10 All right. MR WATSON: The poem’s called “Do it anyway” isn’t it?---Yeah, it is. And so for example if you were prohibited from making a donation do you take inspiration from it and do it anyway?---No. Is that your motto?---No. Oh, okay. Well you met with Tim Owen here in a coffee shop in Sydney on 20 the day that Tim Owen was due to give evidence in a private session didn’t you?---Yeah. He told you that he was coming down to Sydney to go to ICAC didn’t he? ---No, ah, did he or not, I don’t know. Oh sorry, I better let you tell your story. You tell us how it came to be that you and Tim Owen two men from Newcastle met in Sydney in a coffee shop coincidentally on the same day that Tim Owen was due to give evidence in a private session at ICAC. Can you explain it to us?---I was in 30 um, Victoria looking at art galleries, art galleries had been a substantial problem up in Newcastle in terms of the problems we had with it, he rang me from somewhere and said he wanted to see me, he gave me the address of the coffee shop, I drove to, I was driven to the coffee shop, I got out and had a cup of coffee with, with Tim at that coffee shop. That’s slightly different to the words that I said in the previous hearing that we had when your compatriot asked me about this and I said we, we um, met up in a coffee shop in fact he rang me and asked me could we meet at this specific coffee shop and we did briefly. 40 All right. Well so you met him at a coffee shop and this was about art galleries in Victoria you say?---No, no, no. Well what did that have to do with it?---I’d been on a survey for art galleries in Victoria looking at that to compare how we should change what we’re doing in Newcastle. It was quite controversial in Newcastle, there was a lot of flak about it, there was promise of some Government money, we had issues with our own funding because the finance of the Council was very 14/08/2014 McCLOY 5349T E12/2107/0821 (WATSON) poor. I went with the General Manager and one other person on a study tour of these art galleries - - - I’m sorry, what did this have to do with meeting up with Mr Owen? MR FAULKNER: Well if my learned friend would let him answer - - - THE COMMISSIONER: We’ll get there. 10 MR FAULKNER: - - - he’ll get to the end and - - - MR WATSON: All right, okay. You don’t mind if I sit down when you’re talking?---No, not at all. Go ahead?---Have a rest. Um, he knew that I was - - - MR FAULKNER: Just a moment but, Commissioner, perhaps Mr Watson could show the same decorum and respect to everyone else here as we are showing to him - - - 20 THE COMMISSIONER: I’m sorry, I’m sorry, can we please, can we please just settle down. MR MOSES: He’s a Member of the Bar, Commissioner. THE COMMISSIONER: Just, Mr Moses please, settle down. There is a reason for it and I’m not going to embarrass Mr Watson there is a reason for it, I know that that reason is, but never mind. If he can stand he will continue to stand. Yes, go on Mr McCloy. 30 MR WATSON: Sorry, sorry, Mr McCloy. THE COMMISSIONER: Go on. MR WATSON: Go on. You were going to Victoria and doing a survey? ---He knew that I was there, he rang me up somewhere and said could I meet him at the coffee shop, I got my car and went to the coffee shop, he was there, we went and had a cup of coffee, discussed certain things and left. 40 Right. Now what was the discussion, was it about Victorian art galleries? ---No, not initially. So what was it about?---He said that he’d just been to ICAC, it was horrific and words to the effect that they weren’t after him because he didn’t look after the campaign I said okay Tim that’s fine. Now he – the funds of the campaign that’s fine - - - 14/08/2014 McCLOY 5350T E12/2107/0821 (WATSON) Why, why was he telling you this?---Then we, then we went onto discuss the art gallery. So hold on, you’ve got together and he said he’d just been to ICAC and it was horrific?---Well in the last few days whatever, um - - - No, sorry. This is ages ago, this is ages ago, this is back when in June?--- Well it had been – I don’t know if went that day or two days for, or three days before or when, he’d been recently there and was, was grilled, said it 10 was horrific that’s about all and said that, that they weren’t after him because he didn’t look after the finances. Now that was reported in the paper I think not too long later within a reasonable period of time, I may be wrong about that but that’s the gist of what that, that meeting was about. Well why was he telling you this, what did you have to do with it?---Well I, I’d known him well, he was talking about the, the inquiry I suppose, I was a campaigner, a donor to his campaign. Well why was he telling you about it? What, did he ask you to do 20 something about it or was he getting something off his chest?---Well nothing he could do about it we’re all here now on the same, on the same basis. No, but I’m talking at the time. He’s sought you out for a meeting. Was the meeting because he wanted to talk to you about Victorian art galleries? ---Well both I suppose. Right, okay. So to the extent it was about ICAC what was he asking you to do about it?---He was just telling me the story from my memory about the 30 grilling. How long did he tell you about it, did it take him a minute, two minutes? ---Very briefly, very briefly. Very briefly what’s that mean? Several minutes, 30 seconds?---Well they’re the times, the terms of a cup of coffee and we were gone. Please, did it take 30 seconds, did it take minutes?---How would I remember of that, of that meeting in terms of 30 seconds or three minute, I don’t - - - 40 Did you discuss your donation to his campaign?---I can’t recall. Yeah. Now you mentioned something about raffle tickets and Garry Edwards?---Um, raffle tickets and Garry Edwards, yeah. 1500 bucks, did I call it raffle tickets, did I say what it was, I don’t know it was 1500 to 1800 whatever was in my wallet. 14/08/2014 McCLOY 5351T E12/2107/0821 (WATSON) Was there also a scheme in the Hunter for persons like yourself Mr Grugeon could buy raffle tickets and pay cash for them and that way you remain an anonymous donor - - -?---I heard, I, I heard there was a scheme, or I didn’t hear there was a scheme I heard from a couple of, at times people talking about raffle tickets but I had no personal knowledge of it nor did I engage in anything with regard to it. Did you buy raffle tickets from Garry Edwards?---No, there were no raffle tickets there. 10 Right. It was just a straight cash donation?---Yeah, that’s right. Did you in fact could it have been $1,800 you gave to Garry Edwards?---I could have done. You didn’t count it?---No, well, have I got my wallet now? I could – it’d be somewhere between 1800 and 2400 I’d imagine. Mr McCloy, you know that it would be handy for a property developer to 20 enjoy a preferential arrangement with a politician, you’d understand that wouldn’t you?---No, not a State politician. Not a State politician?---You need to understand how it – most of my work is this, most of my work as developer, a development application gets lodged with a local Council the local Council either approves or disapproves that DA, the second process is if the project is big enough it gets lodged with the State Government which is known as a JRPP, I don’t think my company has ever lodged a development application with the State Government but if it had the likelihood of a local politician in terms of a 30 member of Parliament having any influence whatsoever on that JRPPP (as said) one would have thought would be almost zero. Just the same way as a State politician’s influence over a Council. For any specific development application would also be almost zero. In a majority of cases in development applications for my businesses development application is dealt with and approved by the staff of the, of the Council. Politicians in general terms go nowhere near a development application. I would say In Newcastle City Council 95 per cent of development applications are approved or rejected by the staff. The only time that the politicians gets involved in, in Development Application is when they get called in. They 40 get called in, then it comes before the council for the final council determination. In general terms as I said to you, 90-odd or 95 per cent just get dealt by the staff and it’s quite rare for the politicians have to get – and this is the councillors, there is no mechanism for a State Member to get involved in a Development Application that I know of. THE COMMISSIONER: Mr McCloy- - -?---They have almost zilch influence over Development Applications. 14/08/2014 McCLOY 5352T E12/2107/0821 (WATSON) Mr McCloy, can I just ask you this?---Mmm. It is not uncommon for very very large tracts of land which are being considered for release to development, and I’m talking about large tracts of rural land, to be rezoned for that purpose?---Yeah. And that’s a decision that’s usually taken at a State Government level, is it not?---That’s correct. 10 Right?---That’s correct. MR WATSON: So I take it the answer to my question is yes?---Put the question again, please. Mr McCloy, you would understand that it would be helpful to a property developer to be able to get preferential treatment from a State politician? ---Hmm, the State politician in terms of ah, what’s been put to me by the Commissioner has very very little influence with regard to what you’re talking about rezoning. If you’re leading to where, where you think I’m 20 leading I’m happy to take that on board and I’ve got a, a file on that which I can show you the history of a particular development. So a, a, State politician’s ability to influence the rezoning process is quite small, even a Minister’s ability to, to influence a rezoning process is not that large. So the answer to the question is a State politician’s ability to influence a rezoning application in my view is very small. What is the file upon which you have – sorry, what is the particular development upon which you have a file?---A development called Wallalong. 30 And what’s the file about?---It’s about a rezoning application. And why have you got a file on it?---Because we bought the property 12 years ago or in that order of 12 years ago. The property was identified by Port Stephens Council as a property that should be turned, turned residential. THE COMMISSIONER: Is this an area of land in the Morpeth area? ---Yes, it is, which is in the Port Stephens Shire. So Port Stephens Council 40 themselves unanimously identified this area of land to be suitable for residential subdivision. When they identified that as a Council we went along and bought a part of it. We then – that, because it was then to be rezoned we, we sat on it and eventually it got to the position of the Lower Hunter Strategy. It never made that cut for the Lower Hunter Strategy. MR WATSON: Would that be a decision to be made by a State politician? 14/08/2014 McCLOY 5353T E12/2107/0821 (WATSON) ---That decision was made by the – no, but with the recommendation of the Department of Planning. So the Department of Planning and all its planners and all the people associated with it set the priorities for that. Would it be a decision which would be made by a State politician? ---That would be a decision made by the State politician, that is correct. So you’ve got an entire file just to take one example of a particular development, an entire file over a block of land that you own where a 10 favourable decision for a State politician- - -?---No, no, no, no, no. Would you let me finish? No, well, I won’t bother. Look, Mr McCloy - - -?---You need to, you understand, I want- - - Look, I understand perfectly well. Just listen to the next question. Mr McCloy, what you were doing when you were passing over bundles of cash to Mr Owen, when you’re passing him money- - -?---Mmm. - - -you were buying his preference, weren’t you?---Absolute rubbish. 20 You were trying to bribe him, weren’t you?---Absolute rubbish. When you passed money to Hugh Thomson you were passing money which you thought would buy you preference from Tim Owen, weren’t you? ---Absolute rubbish. When you paid money over to Andrew Cornwell you were trying to buy preference from Andrew Cornwell?---You don’t even understand the planning system to make such a ridiculous claim. 30 You knew, you knew when you were passing money to Garry Edwards you were trying to buy his favouritism?---I was trying to get some decent Government into Newcastle to get the funds returned to Newcastle that they justifiably own. I don’t need a help from a State politician in my business. Your idea of decent Government in Newcastle is a Government which makes decisions which can line the pockets of Jeff McCloy. That’s right, isn’t it?---That is absolutely ridiculous. 40 And when you passed the money over- - -?---My projects in Newcastle, I’ll go through them if you want, one by one by one, for the commercial buildings I built- - - No, Mr Faulkner will ask you about that?------everyone has lost money in the last six years, every one of them, and I can give you the maths if you like. So if you’re suggesting to me my role in doing what we’re doing is purely to make a profit is absolute bunkum because I’ve got the numbers to prove it. 14/08/2014 McCLOY 5354T E12/2107/0821 (WATSON) All right. Well, Mr McCloy, you knew at each time you made those donations that you were acting illegally, didn’t you?---We’ve just been through that for a few hours. Well, acknowledge it, yes or no?---No. Why, why do you think it could be a legal for you to sit in the back of a Bentley and pass $10,000 to Andrew Cornwell, what makes you think that 10 there’s any aspect of that which is legal?---Well, we’ve been through that, but I would- - - Tell us what’s legal about it? MR FAULKNER: Let him answer the question. MR WATSON: Sorry. THE WITNESS: It is impossible for a backbencher to have any influence 20 on my business. MR WATSON: I didn’t ask you that. What is legal about you sitting in the driver’s seat of a Bentley and passing over $10,000 in cash, Mr McCloy, what’s legal about that?---It’s a donation to his campaign which came from a non-property developer source. Now, I’ve got to put to you that that is just deliberately false. Your statements about you not being a property developer are just deliberately false, aren’t they?---There are two aspects of that, we’ve been through it and 30 I’m not going through it again. All right. You see, Mr McCloy, did you know that there were caps on how much you’re allowed to donate to a politician?---Ah, I do now. Do you acknowledge that when you made those donations, assuming everything else was legal about them, that they breached the caps? ---The one with Cornwell didn’t. It was a $5,000 cap, wasn’t it, Mr McCloy?---I don’t know. That was in 40 2010 and there were no caps. All right. So you say one didn’t, the others did?---Correct. You acknowledge that. All right?---I now know. I think that’s enough, isn’t it? 14/08/2014 McCLOY 5355T E12/2107/0821 (WATSON) THE COMMISSIONER: I just have a question. The meeting with Mr Owen in the coffee shop where you said that he had just been to ICAC, can you remember when that was?---Hmm- - - This wasn’t I take it in the course of the last week or so?---Oh, no, no, no, no. This was some earlier time?---No, no, no, months and months, months, months ago. 10 Right?---Months ago. Was the meeting in the coffee shop before you came to give evidence here on 25 June?---I’d say so. So when you had the meeting with Mr Owen in the coffee shop- - -? ---Mmm. - - -you indicated a short time ago that he was telling you about his 20 experience at ICAC and that you thought one of the reasons that he was telling you about it was because you were donor to his campaign? ---Hmm, ah- - - Is that what you thought at the time that you were having the conversation with Mr Owen, that he was telling you this because you had been a donor to his campaign?---Oh, no, another, yes, donor to him too ‘cause he did this. So, so you, you knew at the time Mr Owen was speaking to you- - -? ---Yeah. 30 - - -in the coffee shop that he, that he was telling you this because you were donor to his campaign?---Well, that’s where it gets confusing at that time in my mind because doing this, I mean was it a donor to, as I said to you, to Hugh Thomson or was it donor to him direct? All right. Anyway, all right. Satisfied my curiosity. MR WATSON: I suppose the transcript should record, Commissioner, that when Mr McCloy said, “he did this,” that he made a gesture where he 40 rubbed his thumb against his- - - THE COMMISSIONER: Forefinger. MR WATSON: Yes. THE COMMISSIONER: Yes. Right. Thank you. Now, who wants to ask Mr McCloy any questions before Mr Faulkner is invited. Any counsel? Mr Harris? 14/08/2014 McCLOY 5356T E12/2107/0821 (WATSON) MR HARRIS: Well, I don’t, Commissioner. Could I just put this position to clarify it, that my client, Mr Owen, was questioned by Mr McCloy’s representative and that’s at the transcript- - - THE COMMISSIONER: Yes. MR HARRIS: - - -of 12 August, and Mr Owen gave his version of certain of the material that was put to him and then through Counsel Assisting at 10 pages 5134 onwards he gave a further version. So in those circumstances I think, subject to any view you’d have to the contrary, I don’t think it’s necessary or- - - THE COMMISSIONER: No, I think it’s been covered. MR HARRIS: Not necessary or appropriate that I should go and put any minor discrepancies and I don’t propose to do so. THE COMMISSIONER: All right. Thank you. Nobody else. Mr 20 Faulkner, do you have any questions? MR FAULKNER: Yes, thank you. Mr McCloy, of the companies in the McCloy Group can you tell us the nature of the businesses of the categories of companies within the group? Well, you’ve told us today about some of the property development companies, what are the others?---Ah, we have shares in companies which provide food at, at hospitals, with coffee shops and, and restaurants, we have shares in companies that, that ah, provide ah, they run pizza shops, two 30 of them. I’m asking you as to the categories of the companies in the group, not what shares they, those companies might own?---Oh, food, sorry, food, coffee, coffee shops, ah, catering um, oh, boat hire ah, long term investment properties ah, subdivisions um, and ah, we’re about, a hotel’s about to start, we’ve had hotels in the past, we’ve had aluminium window businesses in the past, they come and they go and we’ve had a huge host of different businesses over a long period of time. 40 Are any of those companies trustee companies?---Many, many of them are trustee companies. And you’ve spoken today of investment companies and administration companies so let’s just focus on two. McCloy Administration Pty Limited, what is its – first of all does it, has it ever traded?---Never. And what is its activity?---It writes cheques. 14/08/2014 McCLOY 5357T E12/2107/0821 (FAULKNER) Yes, but – and so can you be a little more specific as to its position within the group and why it writes cheques?---Well, instead of having 33 cheque books we probably only have, I don’t know, three or four so it, the invoices come it, it writes the cheque and it posts it to whatever project that its applicable to. Yes. And so that would mean that if company A is, is running the yacht business and has an expenditure, is this right, the expenditure invoice comes through and that invoice is in fact paid by first of all by McCloy 10 Administration Pty Limited?---That is correct. But that then means doesn’t it that there has to be an internal accounting posting to a ledger so that that payment by McCloy Administration Pty Limited becomes a debt due to McCloy Administration Pty Limited by the yachting company?---That is correct. And so is that how, is that the business of the administration company? ---That is its whole business. 20 It’s the banker company of the group?---That is correct. Now in relation to Acslament that you’ve described today - - -?---Mmm. - - - has it ever traded?---35 years ago once maybe ah, but it certainly hasn’t traded for a very long time, it was my original holding company in the building business ah, my father started 40 or 50 years ago. And is it a trustee company?---Yes, it’s a trustee company. 30 All right. As to the meeting that occurred in your office when Mr Thomson came and spoke to those present about the wish by him for those present to contribute to the campaign, if I can just take you back to that. Did you call him or did he call you in organising that meeting?---Ah, my memory is that he rang to organise the meeting. And in the course of the meeting did he, was there any indication from him to you as to how or in what form he would like the donation to be made? ---Yes, in two forms. 40 Yes?---One, a payment to Luke Grant and two, cash and I didn’t remember the Luke Grant at the, at the time, recently - - - No, that’s all right?------but it’s come to light after the research that that’s who it was. You’ve been asked today as to your awareness of a cap on expenditure? ---Mmm. 14/08/2014 McCLOY 5358T E12/2107/0821 (FAULKNER) Were you aware of caps on expenditure required as, as prescribed by law prior to the 2011 election?---Oh, I now understand or I know - - - No, no, I’ve asked you about then, at that time?---Do I now – say that again, please, Mr Faulkner. As at the time of the election in March 2011 were you aware - - - ?---No. - - - of caps, just let me ask the question (not transcribable) were you aware 10 of caps on expenditure as prescribed by law?---No. You’ve stated in your evidence that a reason for making the payments in the form that you did was in order to remain anonymous?---Mmm. And what – how would it benefit you to remain anonymous in relation to – I withdraw that and ask the question a different way, in what way would it be of benefit or advantageous did you believe at the time if they made and remained anonymous?---Well, Newcastle’s a funny place and, and some of my development applications in some councils got regularly voted against 20 by in particular the Labor Party. I – and, and to coin an expression I suppose they ah, they like some vengeance sometimes so whether I’m donating to Labor or Liberal it doesn’t really matter, I don’t like any donations known about my company, it has an effect either the Left or the Right so wherever I can I want to be anonymous. Have you donated to Labor in the past?---Oh, very much so. And when did you last do that?---About 2007. 30 And how much was that?---$100,000. Yes. Now can you say from whom in particular or what you did not – in respect of whom or what group in particular you did not want the payments to be made known, just tell us?---Oh, to Labor and the Greens. All right then. And you have spoken about a, a reason for making these payments as being from your own point of view in order to effect a change in Newcastle, do you remember evidence to that effect today?---Yes, I do. 40 Well, now how long have you been pursuing a change for what you regarded as the better of Newcastle?---Oh, for over 20 years. And can you tell us of a few of the activities that you have engaged in to achieve that purpose over that period of time, first of all was there something, a presentation by you to Chamber of Commerce - - -?---Mmm. - - - about 20 years ago in relation to comparing Newcastle with Brisbane? 14/08/2014 McCLOY 5359T E12/2107/0821 (FAULKNER) ---Newcastle with what? Sorry, oh, Brisbane, yeah, I, I had a speech to do with the Chamber of Commerce and I, I stumbled across some photographs of Newcastle in about 1940, Brisbane in 1940 and Newcastle and Brisbane then, whenever I made the speech. The differences in the two cities was absolutely amazingly difference. Newcastle looked even worse I think than it did in the 1940’s and Brisbane had grown into this magnificent city. I guess if I took the photographs again today it’d been even more dramatic. And what was the theme of your talk or presentation to the Chamber of 10 Commerce in - - -?---Um, my theme of the talk was what is wrong with this, why are we accepting second best, why aren’t we changing. Newcastle was a, was a city when Canberra was a, was a, was a, a farm and the only reason the difference in those things in my view is politics, where the money gets allocated, how the money gets allocated and the biggest driver of that is politics and we were getting it wrong. And did you have a view as to why you were getting it wrong?---Yes, I did. And, and was that to do with the same party being represented in Newcastle 20 for a long period of time so that Newcastle was getting left out no matter who was in power, is that right?---That’s exactly what in my view happened. Labor was in power in Newcastle - - - Well no, no, no, no. Just a minute, Mr McCloy, we’ve got the point. MR WATSON: Let him finish, Mr Faulkner. MR FAULKNER: All right then you go on, Mr McCloy. You might regret that, Mr Watson. 30 Please keep on, Mr McCloy?---Labor was in power for 100 years and what happened in the State Government which has the biggest effect on I think on any city is that when the Liberals Coalition got into Government they wouldn’t spend in Newcastle because then you would go back to Labor. When Labor gets in in Newcastle they knew they didn’t have to spend because it would always be Labor and then they’d spend on the marginal seats. For all that period of time that city has declined and declined and declined I think in the main because of bloody politics. 40 Yes, all right then. Well now in 2003 then did you because of that view that you held that you’ve just explained did you get involved in a campaign called “Sack the safe seats” campaign?---Yes, we did. And just explain that in 2003? THE COMMISSIONER: Mr Faulkner, I don’t, I’m not cutting you off but I should just alert you to the fact that the folder that Mr Watson tendered a 14/08/2014 McCLOY 5360T E12/2107/0821 (FAULKNER) short time ago has all of that material in it. But anyway I just thought I’d let you know in case you hadn’t seen it. MR FAULKNER: No, I have seen it but I do want some oral evidence from the witness to support it and so I’m being as concise as we can be as you, as - - - THE COMMISSIONER: No, that’s all right. 10 MR FAULKNER: - - - you’ve observed so far. The “Sack the safe seats” campaign what was that?---It was a campaign to get Novocastrians in general, the Hunter Valley people in general to think about their vote, to think about what I’ve just put that why we were falling behind, why we, if we had in the Hunter Valley 9 per cent of the State’s population and a general got 4.5 per cent of the money back for other such things, so it was a campaign to get people to start to think and in fact what it did is started to change the vote the other way in the swing. 20 All right then. Well now in 2008 you were involved in an anti-graffiti campaign and - - -?---Yeah. - - - without going into the detail of that, that was because you were fed up with what appeared to be an action about cleaning the city of the graffiti, is that right?---There was graffiti - - - Is that right?---That’s correct. All right?---And someone should get onto North Sydney coming in here the 30 bloody stuff is an absolute mess, driving in here looks like coming to Beirut. Well, okay. Well now then, then in 2009/10 you were involved in what was called the Hunter Advantage Project, and just briefly tell us about that? ---Well the Hunter does have some great advantage and they were never promoted by anybody, we got together and got the data and got the paperwork together so that we could promote the Hunter, in fact we started a website, that website now we’ve since handed over the state Government and they’re running it but it was a message to people out there come to the Hunter Valley because we have lots of advantages, water, rates, cost of 40 living, all those things which we got in that report. Yeah, all right. In 2009/10 you organised I think didn’t you or you were one of the organisers of “Fix our city” campaign?---Yeah, well once again the city even further deteriorated and a bunch of us got together, looked at all the facts and figures, we ran full page advertisements, we got together UDIA, the Master Builders Association, the plumbers, the Chamber of Commerce, all these groups to say we have had enough of this, we want the 14/08/2014 McCLOY 5361T E12/2107/0821 (FAULKNER) politicians to listen and for goodness sake start spending some money on Newcastle and the Hunter and it was very successful. And who paid for the, for the advertisements for that?---Well - - - Hmm?---You know what they’re like they all said yes we’ll do this - - - No, no, no, just tell me - - -?---I paid for the majority. 10 And including for the venue for the public meetings and so?---I believe so. Yeah. Without going into it I’ll just put this down recently or just after that you were involved at Lake Macquarie where you in, in relation to the sea rise issue where you were brought in for consultation and public meeting Professor Ian Plimer and another, P-l-i-m-e-r, and another professor for them to explain to the local residents why their waterfront properties were not at risk in their opinion, is that right?---Yeah. The Council had put a thing in place which affected 10,000 waterfront residences. 20 All right. Well now - - -?---It’s all to do with the IPCC and the thing rising a metre and it was just (not transcribable) and it was affecting their, their values, it affected their insurance, affected everyone else and nobody was doing anything about it. Well, now prior to – as at 2010 who was the, who was the Member for Newcastle?---Ah, Jodi McKay. Now during – prior to the election did you have several meetings with Jodi, Jodi McKay?---Yeah, one in particular with Jodi. 30 And, and, and you, you discussed your views of the city and its problems and the reasons for it so far as you have described them in the nature that you’ve described them here today, is that correct?---That is correct. All right. Well, what was Jodi McKay’s attitude?---Ah, Jodi McKay was fully supportive of what is known as the HDC Report, the Hunter Development Commission’s report which had three main planks of what the Government had to do to fix Newcastle. She was fully in, in support of that including the removal of the heavy rail line. 40 Yeah. And did you ask her to consider her position in relation to her representation?---Very much so, it was very clear to everybody that there was going to be a big swing towards the Conservatives. Jodi was a hard worker and being Labor she was across the issues. I had a breakfast with her one morning, I suggested to her look, you should thing about running as an Independent or maybe in the an alternative go and tap the Libs on the shoulder and see if you can’t run for the seat of Newcastle under the Libs, she was a good person, she was doing a good job. 14/08/2014 McCLOY 5362T E12/2107/0821 (FAULKNER) Yes, but she declined that invitation?---Yes, reluctantly so but she did. All right. As a result of that then did you, was the reason you decided to support Mr Owen?---Very much so. So when you’ve made the payments to Mr Owen what was the purpose of those payments?---To assist him in the election campaign. 10 Payment I mean. And is that so for the other payments that you’ve made that you’ve been examined about here today?---Very much so, to assist them in the election campaign. For what? To, to achieve what in your mind at that time?---Proper distribution of the State’s money towards Hunter and Newcastle. Through, through getting what?---Well - - - How, how was that to be achieved by giving money to these persons, 20 Mr McCloy is what I’m asking you, did you think?---Well, them being elected. Who’s them?---Tim Owen, ah, all the, all the local, Tim Owen, Cornwell, all the Liberal ah, people that were standing would be an advantage because ah, I wrote, I wrote actually on Fix our City to all the local politicians whether they be State or whether they be Federal and I gave them a copy of the report of the HDC and sought their advice back. Nearly every State or Federal politician in the area came back and said we support this et cetera bar one, there was a silly letter from Mr Morris but ah, we, we tried to get 30 bipartisan support to adopt this HDC report. Yeah, well, what I’m asking you is how are you going to achieve your – what, what has to happen to achieve your aims by paying the money? ---They have to win the election. And by winning the election what did you think would happen in Newcastle?---Newcastle will, will, will boom. No, no, can you use a different word?---Will receive its fair share of the 40 funds from, from the State Government to allow it to prosper like ah, it should. Yes, all right then. If I can just have a moment, Commissioner, please. THE WITNESS: I must say this, that I have actually asked Mr Cornwell for something during his term. 14/08/2014 McCLOY 5363T E12/2107/0821 (FAULKNER) MR FAULKNER: I beg your pardon?---I have actually asked Mr Cornwell for something. You want, you want to explain something in relation to previous answers given, do you?---Yeah. All right?---The, the, the proposition put to me about, you know, serving me or my benefit is, is, is I think preposterous. I’ve seen thousands of pages of stuff with regard to Buildev et cetera, et cetera, I know we’ve got on 10 evidence that from, from Cornwell and co that I’ve never asked them for anything, but I did actually with Cornwell ‘cause the entry into our city, like I see the entry into here, the median strip had grass on it this high and I will admit I did ring him up and see if he could talk to the DMR to get rid of the grass out of the middle of the median strip. Thank you, Commissioner. THE COMMISSIONER: Nothing arising, Mr Watson? 20 MR WATSON: No, just, just this. You have that conversation with Jodi McKay- - -?---McKay. - - -and the Libs?---Mmm. And what did she say when you suggested that?---There was silence for a while. And then did she respond?---Yes, she said, “No, I can’t.” 30 And then did you say anything more?---Oh, no, she’s a, she’s a, we had a very pleasant breakfast, she’s a nice, nice person and I, that was put to her and she said no and that’s life. And where was it that you were meeting with her?---Oh, there’s the Newcastle Club one time, I haven’t got a clue. It’s just that I was just absolutely stunned by your exceptionally detailed recall of these conversations which I was in my own mind wondering how that would compare with the fact that you couldn’t recall any details of a 40 conversation you had with Tim Owen, you know, even days or weeks or months ago?---Well, this is- - - You’re not trying, you weren’t trying to answer us honestly today, were you?---That one there was an absolute critical one for the determination of which Newcastle could go, absolutely critical. On another matter, the person whom you referred, the employee who was in control of the funds- - -?---Mmm. 14/08/2014 McCLOY 5364T E12/2107/0821 (FAULKNER)/(WATSON) - - -in respect of Mr Robinson and yourself, was that Josh Hodges?---No. Who was it?---Paul Fehlberg. Thank you. THE COMMISSIONER: Sorry, Paul who?---Fehlberg. 10 Fehlberg?---Yeah. Thank you. Nothing else? Yes. Yes, sorry, Mr Faulkner? MR FAULKNER: F-e-h, F-e-h-l-b-e-r-g. THE WITNESS: Yeah, that’s correct. MR FAULKNER: And he’s the Chief Financial Officer of your group? ---Yes, he is. 20 THE COMMISSIONER: Yes, thank you Mr McCloy, you may step down. MR FAULKNER: Commissioner, I should say Mr McCloy plans to be overseas for about two weeks from next Wednesday, so I’m just indicating. THE COMMISSIONER: From next Wednesday? MR FAULKNER: From next Wednesday. 30 THE COMMISSIONER: All right. Thank you very much. THE WITNESS WITHDREW [2.43pm] THE COMMISSIONER: Yes, Mr Watson. MR WATSON: That’s all we had for today, we’ve gone faster than we thought we would. Tomorrow we’ve got the following witnesses, I’ll just 40 read them out, this is not their order. Robyn Parker, Keith Stronach, Bill Saddington, David Mingay, Michael Tyler. I know that my old friend Mr Harben has come all the way from Newcastle and he may want to get back so I’ll speak to him about whether he wants Mr Tyler to come in and out early, so I can’t settle on the order just yet. THE COMMISSIONER: All right. Thank you. 14/08/2014 McCLOY 5365T E12/2107/0821 (WATSON) Could I just raise something from yesterday’s transcript. There was a report in the Herald of an exchange between Mr Nagle and myself towards the end of the hearing yesterday. Could I just clarify, in relation to my comment that nearly every witness that we had had thus far in the inquiry having breached the Electoral Funding Act was a reference to the witnesses since Wednesday of last week and the two politicians to whom I referred who had admitted breaching the Electoral Funding Act were of course Mr Owen and Mr Cornwell. So lest my comments be taken out of context I thought I should correct that for the record. 10 So I’ll adjourn till 10.00am- - - MR FAULKNER: Commissioner, before you do I’m sorry. THE COMMISSIONER: Yes, Mr Faulkner. MR FAULKNER: If I could just raise one matter. THE COMMISSIONER: Yes. 20 MR FAULKNER: We’ve received information that Mr McCloy did not pay for Mr Robinson’s campaign expenses. Obviously he can’t give the evidence because he’s not aware of the, of the, of the direct evidence about that, but what we will do is write to the Commission in- - - THE COMMISSIONER: Thank you. I’d appreciate that. Any information you can provide would be helpful. MR FAULKNER: Yes, thank you. 30 THE COMMISSIONER: Yes. MR DAWE: Your Honour, Commissioner, may I seek leave to appear with my junior for Neil Slater, a witness who is due to be called next week? THE COMMISSIONER: Yes, if you could just for the record, when you say your junior, I’m sorry? MR DAWE: Jehane Ghabrial. 40 THE COMMISSIONER: Ms Ghabrial. MR DAWE: And it’s spelt, the surname’s G-h-a-b-r-i-a-l. MR WATSON: Just excuse me, just before Mr Dawe goes further, I was just going to take some instruction. So sorry, it didn’t affect Mr Dawe. I was just, anyway. 14/08/2014 5366T E12/2107/0821 THE COMMISSIONER: All right. Thank you. Yes, Mr Dawe, that leave is granted to both you and your junior to appear for Mr Slater. Thank you. MR DAWE: May it please, Commissioner. THE COMMISSIONER: Yes, thank you. 10.00am tomorrow morning. AT 2.46pm THE MATTER WAS ADJOURNED ACCORDINGLY 10 [2.46pm] 14/08/2014 5367T E12/2107/0821