ICAC UPDATE: Andrew Cornwell's $10,000 mistake

Charlestown MP Andrew Cornwell

Charlestown MP Andrew Cornwell

 CHARLESTOWN MP Andrew Cornwell used $10,000 that Hilton Grugeon gave his wife for a painting to pay his tax bill, despite suspecting the prominent Hunter developer was attempting to ‘‘curry favour’’ or bribe him, a corruption inquiry has heard.

Mr Cornwell also admitted on Thursday at the Independent Commission Against Corruption that he accepted a $10,000 wad of bills from property developer Jeff McCloy –  but declared it was all a ‘‘huge mistake’’.

The Cardiff vet, who stepped aside from the Liberal Party and quit his position as government whip on Wednesday, told the inquiry he had always felt ‘‘uneasy’’ about taking the money from both men during the 2011 state election campaign.

He sought at the time to deal with their money in accordance with the law when he should have considered if accepting the money was ‘‘appropriate’’, he said.

However, Mr McCloy’s money ended up being spent on his campaign, in breach of electoral funding laws that ban developers from donating.

Mr Cornwell, who has been described as  ‘‘co-operating with the inquiry’’, told how he was in surgery at his Cardiff vet practice in October 2010 – a date fixed in his mind and records because of the specialist surgery he had performed on a dog.

While he was still in theatre, Mr McCloy called to ask where he was – which phone records obtained by the inquiry confirm.

Mr McCloy arrived outside the surgery and signalled Mr Cornwell to hop in the passenger side. The now lord mayor of Newcastle then handed Mr Cornwell a sealed envelope with the words: ‘‘I should be giving this to the Salvation Army’’, the ICAC was told.

Mr Cornwell said he was ‘‘stunned’’ and ‘‘froze’’, taking what he knew must be cash in the envelope and returning to his surgery to complete the operation.

‘‘I was now in the receipt of something that I shouldn’t have had,’’ he told the Sydney hearing.

He kept the money at home in a bedroom cupboard for about a week before handing it to the president of the Charlestown Liberal Party branch, Bob Beaven, also his official campaign agent, because ‘‘I just didn’t want to have it in my possession  any more.

‘‘Candidates really shouldn’t be handling any donation, let alone a prohibited donation.’’ 

Mr Cornwell said he informed Mr Beaven the money was from Mr McCloy and asked him to deal with it.

Mr Beaven banked the money and it ended up being spent by Mr Cornwell’s campaign to buy into a targeted seats campaign package from the party’s head office to boost his electoral chances.

Asked why he didn’t go to police or return the money when he knew Mr McCloy was banned as a developer from donating, Mr Cornwell said:  ‘‘It was just a huge mistake, I just froze.’’

Mr McCloy is also alleged to have later rung Mr Cornwell offering him a tab account at a printing service for his campaign to use.

‘‘I said that it would be a third party payment and he’s a prohibited donor and ... it’s just not possible [to accept it],’’ Mr Cornwell said.

Mr Cornwell also told how he and his wife had regifted a landscape painting they owned and stored in their garage to Mr Grugeon, a prominent developer, for Christmas in 2010.

Mr Grugeon called him and insisted on paying Samantha Brookes (Mrs Cornwell) for the painting.  Mrs Cornwell issued an invoice to Mr Grugeon who sent a cheque for $10,120 – far in excess of its value.

‘‘You must have smelt a rat,’’ counsel assisting the inquiry Geoffrey Watson SC said.

‘‘I did,’’ Mr Cornwell said.

He said he always felt ‘‘uneasy’’ about the money, and had sought advice from his lawyer parents, who assured him it was legal to accept it.

Mr Watson put to Mr Cornwell that Mr Grugeon had attempted to bribe him and the invoice was a  ‘‘sham’’.

‘‘It was definitely an effort to try and curry favour,’’ he replied.

However, he used the money to pay his tax, answering ‘‘clearly yes’’ that he had received a financial benefit.

Mr Cornwell said Mr Grugeon had told him he later donated the Rex Newell painting to charity.

He also told of  ‘‘fairly funky’’ fund-raising proposals put to him by Newcastle Liberal campaign manager Hugh Thomson, including channelling donations through a Sydney trust fund and the use of a sham housing deposit. 

Mr Thomson had rung him to say, ‘‘I’ve got these guys who might be able to help you out.’’ The idea was the ‘‘guys’’ would agree to buy Mr Cornwell’s house and he would accept a non-refundable deposit.

The deal would then fall through and he would be able to keep the money and use it for his campaign. 

Mr Cornwell said he told Mr Thomson,  a lawyer, it was the most ‘‘harebrained’’ idea he’d ever heard.

He also told the inquiry it was common to see property developers at some of Newcastle MP Tim Owen’s  fund-raisers.

 This included his campaign launch, Mr Cornwell said. He also said senior Hunter Liberal and MLC Mike Gallacher, who recently was forced to resign as police minister, had once advised him he could ‘‘technically’’ sell some raffle tickets to Mr Grugeon.

In his evidence, Mr Beaven said Mr Cornwell told him when he gave him the $10,000 cash that Mr McCloy was a builder or developer but wanted to remain  anonymous.

Mr Beaven said he could understand the request as ‘‘Newcastle is a Labor town’’ and to publicly support the Liberal Party would attract attacks.

Mr Cornwell’s wife, Samantha Brookes, also gave evidence and said she and her husband were functioning on five or six hours sleep at the time and she could not recall if she told him she was contacted by Mr Grugeon’s office about providing her with the money for the painting.

She said she treated the invoice as an administrative task her husband must have already known about.

When she presented the cheque to Mr Cornwell he was ‘‘extremely shocked’’.

‘‘I regret that I didn’t stand back and put this transaction into perspective,’’ she said.

 The inquiry is continuing.

Andrew Cornwell pocketed $10k from developer to pay tax bill

By MICHELLE HARRIS Aug. 7, 2014, 1 p.m.

CHARLESTOWN MP Andrew Cornwell has admitted taking $10,000 in cash from property developer Jeff McCloy but says it was all a "huge mistake".

Mr Cornwell, a vet, has also acknowledged at the ICAC Thursday morning that he pocketed another $10,000 from Hilton Grugeon and used it to pay his tax despite suspecting Mr Grugeon was attempting to "curry favour" with him.

Mr Cornwell, who stepped aside from the Liberal Party yesterday and quit his position as government whip, said this morning he had always felt "uneasy" about taking the money from both men but had sought at the time to deal with their money in accordance with the law.

Newcastle property developer and lord mayor Jeff McCloy

Newcastle property developer and lord mayor Jeff McCloy

He told how he was in surgery at his Cardiff vet hospital in October 2010 - a date fixed in his mind and records because of the specialist surgery he had performed on a dog.

Mr McCloy called him to ask where he was then arrived soon after at the surgery.

Mr Cornwell said he walked out to Mr McCloy’s car, a Bentley, and was signalled to hop in the passenger side.

"He passed me a sealed envelope," Mr Cornwell said.

He told the ICAC Mr McCloy, now Newcastle Lord Mayor, said to him "I should be giving this to the Salvation Army".

Mr Cornwell said he was flustered and "froze", taking what he knew must be cash and returning to his surgery.

"I was stunned," he said.

He kept the money at home in a cupboard for about a week before handing it to the president of the Charlestown Liberal Party branch, Bob Beaven.

Mr Cornwell said he informed Mr Beaven the money was from Mr McCloy and asked him to deal with it.

Mr Beaven, who will give evidence this afternoon, banked the money and it ended up being spent by Mr Cornwell’s campaign to buy into a targeted seats election campaign package from the party’s head office.

Asked why he didn’t go to police or return the money when he knew Mr McCloy was banned as a developer from donating, Mr Cornwell said: "It was just a huge mistake, I just froze".

Mr Cornwell also told how he and his wife had regifted a painting they owned to Mr Grugeon, a prominent developer, for Christmas in 2010.

Mr Grugeon called him and insisted on paying Samantha Brookes (Cornwell) for the painting.

Mrs Cornwell issued an invoice to Mr Grugeon who sent a cheque of $10,120.

"You must have smelt a rat," counsel assisting the inquiry Geoffrey Watson SC said.

"I did," Mr Cornwell said.

He said he was "always very uneasy" about the money, and had sought advice from his lawyer parents, who assured him it was legal to accept it.

Mr Watson put to Mr Cornwell that Mr Grugeon had attempted to bribe him and the invoice was a "sham".

"It was definitely an effort to try and curry favour," he replied.

Mr Cornwell said Mr Grugeon had later donated the Rex Newell painting to charity.

He also told of "fairly funky" fundraising proposals put to him by Newcastle Liberal campaign manager Hugh Thomson, including channelling donations through a Sydney trust fund and the use of a sham housing deposit.

Mr Thomson had rung him to say "I’ve got these guys who might be able to help you out".

The idea was the "guys" would agree to buy Mr Cornwell’s house and he would accept a non-refundable deposit.

The deal would then fall through and he would be able to keep the money and use it for his campaign.

Mr Cornwell said he told Mr Thomson, also a lawyer, it was the most "hair brained" idea he’d ever heard and he wasn’t interested.

He also told the inquiry it was common to see property developers at some of Mr Owen’s fundraisers.

This included his campaign launch, Mr Cornwell said.

He also said senior Hunter Liberal and MLC Mike Gallacher had once advised him he could "technically" sell some raffle tickets to Mr Grugeon, who is also a banned donor.

The inquiry is continuing.

Newcastle MP Tim Owen

Newcastle MP Tim Owen

The Bentley and the bag of money

By MICHELLE HARRIS Aug. 6, 2014, 10 p.m.

NEWCASTLE MP Tim Owen has been implicated in a scheme that allegedly secured illegal political donations from Buildev, Keith Stronach and other property developers to prop up his 2011 campaign through the use of sham invoices.

Combined with misinformation campaigns waged against Labor MP Jodi McKay, allegedly run by Nathan Tinkler through either his Buildev interests with the help of Labor powerbroker Joe Tripodi or the Newcastle Alliance advertising campaign he bankrolled, the result was the ‘‘manipulation’’ of the state election outcome in the city seat, a corruption inquiry has been told.

And in further nightmare revelations for the Liberal Party and Baird government, the inquiry heard Charlestown MP Andrew Cornwell is expected to give evidence Wednesday that he was handed a $10,000 wad of cash by property developer and now lord mayor Jeff McCloy during a meeting that took place in Cr McCloy’s Bentley during the state election campaign.

Both MPs were forced to step aside from their party and join the crossbench Tuesday, and Mr Cornwell to abandon his role as government whip, with Premier Mike Baird declaring he made ‘‘no judgment’’ about the allegations but did not want them to be a distraction for the government.

That wish seems unlikely to be fulfilled, with counsel assisting the inquiry Geoffrey Watson SC telling the hearing that evidence of ‘‘serious irregularities’’ had been found in the funding and conduct of campaigns in both seats and would be aired.

Mr Owen’s local campaign manager, lawyer Hugh Thomson, has admitted  being at the ‘‘centre of the illegalities’’ and detailed his part in return for his statement not being used in a criminal prosecution against him.

‘‘The evidence is that there was a broad understanding that a number of different prohibited donors would, acting under some subterfuge, provide the funds to keep the [Newcastle] campaign rolling,’’ Mr Watson said.

Those involved with Mr Thomson were former Port Stephens councillor and prolific Liberal campaigner Josh Hodges and ‘‘the candidate himself – Tim Owen’’.

Former police minister and senior Hunter Liberal Mike Gallacher  was ‘‘aware of these arrangements and ... suggested some of them’’, while former resources minister Chris Hartcher ‘‘was also aware and participated in some aspects of it’’.

The scheme allegedly entailed the issuing of fake invoices, including to Hilton Grugeon’s Hunter Land,  Cr McCloy’s McCloy Administration, Mr Stronach’s Newcastle Yachting, and other developers to raise money for the wages of Mr Hodges and Luke Grant, a radio announcer, while they worked on Mr Owen’s campaign.

In some cases, invoices were issued to businesses Mezzanine Media and Australian Decal Sales and Manufacturing, who then issued invoices to Buildev to pay.

Mr Hodges’ wages were to be paid by two local developers, through a scheme organised by Mr Thomson and Mr Owen following a meeting at Port Stephens MP Craig Baumann’s electorate office in December 2010.  ‘‘Mr Baumann may have been aware of it,’’ Mr Watson said, in his only reference to the other Liberal MP.

Mr Grant, who looked after the campaign’s media, was to be paid $20,000 by Mr Grugeon and Mr McCloy, with Mr Thomson advising Mr Grant to issue invoices for a ‘‘random’’ sum ‘‘so it doesn’t look obvious’’.

 However, while Buildev promised to support the campaign, it didn’t always pay, and Mr Owen, who has said publicly he knew nothing about who donated to his campaign, was allegedly enlisted to chase up the money.

‘‘Mate Can you call [Darren Williams] about the Mezz and Decal situation. I am getting abusive calls and he won’t respond to any of my calls, texts etc. I need you to lean on him,’’ Mr Thomson texted to Mr Owen in July 2011. ‘‘Will do,’’ Mr Owen replied, then rang Mr Williams a few minutes later.

Mr Grugeon and Mr McCloy, who was not yet lord mayor, also gave money to Mr Cornwell, as the Charlestown MP would tell the inquiry, Mr Watson said.

Mr Cornwell, a vet, was in surgery at his Cardiff practice when he was called to an urgent meeting with Mr McCloy. They sat in his Bentley when Mr McCloy handed him an envelope containing $10,000 in cash.

Mr Cornwell was ‘‘shocked and embarrassed’’ and took the money home. He later gave it to the president of the Liberal Party Charlestown branch, telling him it was from a donor who wanted to remain anonymous. The president, Bob Beaven, who believed the money was actually in a brown paper bag, then banked it and donated it to the party.

The inquiry would also hear Mr Cornwell and his wife, Samantha, gave Mr Grugeon a Christmas present of a painting by artist Rex Newell, a friend of Mr Cornwell’s father. However, Mr Grugeon insisted on paying him for it and ‘‘fixed the purchase price at $10,120’’.

‘‘Mr Cornwell was embarrassed by the receipt of money and, at first, told his wife not to bank the cheque,’’ Mr Watson said.

Other evidence implicated Mr Tinkler in a $120,000 payment that went to three seats and text messages  between Mr Thomson and Mr Gallacher about ‘‘the Big Man’’.

Mr Watson described Mr Cornwell and Mr Owen as ‘‘outstanding candidates’’ for Parliament who had sacrificed ‘‘lucrative careers’’ to stand.

‘‘One can see how the inexperience of each made them susceptible to being manipulated by wealthy individuals who wanted political preferences, especially if those wealthy individuals had pre-existing support of elements within the party machine,’’ Mr Watson said.

Mr Cornwell had helped ICAC and there was no evidence he favoured Mr McCloy or Mr Grugeon. Mr Owen ‘‘might be in the same class’’ but it ‘‘remains to be seen the extent to which he co-operates with the inquiry. Both MPs said last night they would assist the inquiry and were confident they would be cleared of wrongdoing.

ICAC investigators found no  wrongdoing in  the campaign funding for  Maitland MP Robyn Parker and Swansea MP Garry Edwards.

Mr Edwards is expected to give evidence, however, about a  call he received from Mr Hartcher pressing Buildev’s interests in a development at Lake Macquarie that Mr Edwards opposed. Mr Edwards gave Mr Hartcher a ‘‘blunt’’ response.

But if the shock revelations weren’t enough for Hunter voters, the inquiry will also turn to the role of the Newcastle Alliance in Mr Tinkler’s efforts to oust Ms McKay from the  seat. The inquiry had already heard Mr Tinkler agreed to pay $50,000 for ‘‘carpet’’– a reference to Alliance head and Newcastle carpet retailer Paul Murphy.

The inquiry was told yesterday the Alliance’s Fed Up campaign had been devised by Mezzanine Media and originally offered to the Liberal Party. While they didn’t pursue it, Mr Thomson allegedly suggested through Mr Murphy, restaurateur Neil Slater and hotelier Rolly de With, that their Alliance take it up.

It was ‘‘quite illegal’’ for the Alliance to have accepted Mr Tinkler’s funding, via Buildev, Mr Watson said.

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