COUNCIL BYELECTION UPDATE: Newcastle council embroiled in byelection stoush


A BATTLE is looming over Newcastle council’s lord mayoral byelection after Labor councillors moved to have it run by the electoral commission rather than the private company that ran the 2012 poll.

Labor councillors confirmed yesterday afternoon they had lodged a notice of motion asking for the NSW Electoral Commission rather than the privately owned Australian Election Company to run the byelection.

Greens and Labor councillors said they were unhappy at  how the company ran the 2012 poll.

Council general manager Ken Gouldthorp said the council had an option from its 2012 contract to hire the company for any byelections but the final decision rested with the elected council.

Mr Gouldthorp said the lord mayoral election was due on or before Saturday, November 15.

He said the resignation of Jeff McCloy as lord mayor made no difference to the running of the council or to plans and policies set in place when he was there.

‘‘We will be continuing with our service delivery, and all of the previous decisions and plans and budgets remain in place,’’ Mr Gouldthorp said.

 Deputy mayor Brad Luke would chair meetings and exercise a handful of functions delegated from the lord mayor’s duties but otherwise the position of lord mayor remained vacant until the byelection was decided.

Mr Gouldthorp said Cr Tim Crakanthorp could remain on council until its 2016 election if he won the byelection for the state seat of Newcastle. 

ICAC fallout aired behind closed doors for council

By IAN KIRKWOOD Aug. 19, 2014, 10:30 p.m.

Newcastle City Council acting lord mayor Brad Luke, right, at last night’s public meeting, the first since the resignation of Jeff McCloy. Picture: Dean Osland

Newcastle City Council acting lord mayor Brad Luke, right, at last night’s public meeting, the first since the resignation of Jeff McCloy. Picture: Dean Osland

THE first public meeting of Newcastle City Council after the resignation of Jeff McCloy went its full 90 minutes without a mention of the former lord mayor.

Labor’s Stephanie Posniak sent an apology and the remaining 12 councillors sat as two committees chaired by acting lord mayor, Liberal councillor Brad Luke.

Fewer than a dozen people, including those presenting, sat in the gallery.

The briefings committee heard from non-profit group Newcastle Now on its work on Nobbys.

The development applications committee voted unanimously to approve two projects. The first was a Fletcher subdivision by the state government’s UrbanGrowth, cutting two blocks into 14 ‘‘small lot housing’’ sites in The Sanctuary estate.

All 14 blocks were smaller than the 450-square-metre minimum in the Newcastle Local Environmental Plan, and Greens councillor Therese Doyle was initially concerned about creating precedents.

The second item was a $17.9million Fuchs Lubricants oil factory at Beresfield from Hilton Grugeon’s Hunter Land, which triggered a brief discussion on developer donations.

Labor councillor Nuatali Nelmes said Hunter Land had answered ‘‘no’’ to the question: ‘‘Have you, or are you aware of any person having a financial interest in the application, made a ‘reportable political donation’ or ‘gift’ to a councillor or council employee within a two-year period before the date of this application?’’

Cr Nelmes asked if the onus was on the applicant to answer the question correctly. Council general manager Ken Gouldthorp said this was the case, but councillors were also obliged to notify any conflicts of interest.

With none declared, the vote was carried unanimously, and the meeting closed.

The ICAC drama was discussed last night, but behind closed doors in a confidential ‘‘oral briefing/presentation’’ on the ‘‘implications/consequences of the former lord mayor’s resignation and the way forward’’.

 A report ‘‘formally addressing’’ the issues would be given to councillors before next week’s meeting.

The briefing also discussed whether the company that ran the September 2012 council election – Australian Election Company – would get the contract to run any byelections, after some councillors raised concerns about its service.

Before the briefing, Cr Doyle said the lord mayoral vote had only been counted until the result was certain,  meaning a final ‘‘two-candidate’’ outcome was never made public.

McCloy ally Brad Luke warms the city chair

By MICHAEL McGOWAN Aug. 18, 2014, 10:30 p.m.

Acting lord mayor Brad Luke

Acting lord mayor Brad Luke

BRAD Luke says he has ‘‘a big pair of shoes to fill’’ following Jeff McCloy’s departure from the lord mayoral position.

The new acting lord mayor had the role thrust upon him yesterday following the announcement Mr McCloy had jumped rather than be pushed from the top job, two years into his first term.

A close civic  ally of the man whose short political career unravelled in fallout from the latest ICAC hearings, Cr Luke yesterday refused to distance himself from his former mayor, calling Mr McCloy a ‘‘strong leader with a great vision for Newcastle’’.

Cr Luke will be charged with steering the new and smaller council until a byelection, to be held in the next few months.

He suggested yesterday that he would push on with the agenda set by his predecessor.

‘‘I think people are disappointed by what has happened and even surprised, but the real thing I think people want is stability, and to make sure the big-ticket projects we have been working for go forward,’’ he said.

He’ll keep on the former mayor’s chief of staff, Gillian Summers, who operates as an employee of the council.

Since it first sat in the back end of 2012, Newcastle council has consistently voted on a knife-edge Liberal-backed 7-6 majority, and with Mr McCloy gone that stranglehold could be threatened.

It comes in the context of calls for decisions such as the controversial high-rise development proposed for the UrbanGrowth-GPT site off Hunter Street Mall to be reviewed.

But Cr Luke rejected the idea, saying opposition was being pushed by a ‘‘tiny minority’’.

At pains to point out he was only ‘‘acting’’ lord mayor – he’ll use the mayor’s office but ‘‘won’t be putting any photos up’’ – Cr Luke was coy when asked if he’d seek the job permanently at the byelection.

He said only that he’d be discussing it with family in the week ahead.

However, whether he does or not will likely depend on whether Cr Luke, who is head of the Newcastle branch of the Liberal Party, can marshall the numbers for a tilt at the state seat in March.  

Local branches of both the Greens and Labor Party met last night, and it’s a fair bet plans for both the state and local byelection in Newcastle were discussed.

For the Labor Party, councillor Nuatali Nelmes says she’ll put her hand up for the job she missed out on in 2012, while for the Greens both Michael Osborne and John Sutton are considering a run.

Newcastle lord mayor Jeff McCloy quits

By JASON GORDON Aug. 17, 2014, 11 p.m.

Jeff McCloy chairing his first council meeting as  lord mayor in full formal robes on October 9, 2012.

Jeff McCloy chairing his first council meeting as lord mayor in full formal robes on October 9, 2012.

THE Hunter’s political landscape has taken another dramatic turn with Newcastle lord mayor Jeff McCloy resigning.

The lord mayor sent an official letter of resignation to Newcastle council general manager Ken Gouldthorp on Sunday after a week of intense pressure produced by the state corruption inquiry.

His resignation follows that of state Liberal MPs Tim Owen and Andrew Cornwell, and a move to the crossbenches by Swansea MP Garry Edwards over donations made to their 2011 election campaigns by the millionaire developer.

The Newcastle Herald can reveal that Mr McCloy has decided not to step aside from his role, but resign entirely, effective immediately, meaning the city’s residents will now be heading to the polls three times in the next seven months.

In his letter of resignation, Mr McCloy said the controversy surrounding donations he made to the 2011 election campaign ‘‘may  affect the proper functioning’’ of the council.

‘‘I believe that I am leaving the city in much better shape financially and physically than it was when I started,’’ he said.

‘‘I would like to personally thank the general manager and staff of Newcastle City Council and the thousands of Novocastrians who supported change in our city.

‘‘It has been a privilege serving the people of Newcastle, but now I will leave this to others.

‘‘I encourage the elected council to continue focusing on local issues of significance for the Newcastle community and the progression of our city,’’ he said.

The move means that the city’s deputy lord mayor, Liberal Brad Luke, will take over the mayoral reins until a byelection is held.

The Local Government Act requires that a fresh lord mayoral election be held because the position has been vacated more than 18months out from the next scheduled council election. Local Government Minister Paul Toole will be required to stage the election within three months.

Mr  McCloy’s move also follows news on Friday that Minister Toole was seeking legal avenues to remove the lord mayor after he admitted breaking political donations laws when he appeared before the Independent Commission Against Corruption on Thursday.

Then, Mr McCloy admitted to donating $9975 to the campaign of Newcastle Liberal Tim Owen, and $10,000 in cash to Charlestown Liberal Andrew Cornwell. He also admitted to taking ‘‘about $1500’’ from his wallet and giving it to then-Liberal candidate for Swansea Garry Edwards, and writing a further cheque for $10,000 which was allegedly used to pay the wages of Liberal staffers running the campaign.

Premier Mike Baird had also called on Mr McCloy to ‘‘do the honourable thing and resign’’ or face being removed from office by the beginning of next month.

General manager Ken Gouldthorp released a statement on Monday confirming it would be business as usual but the city would miss Mr McCloy's leadership.

"Our focus remains on supporting the local community with the full range of council services," he said. 

Mr McCloy spent Sunday with his family and said he would not be making any further comment because the corruption inquiry was still proceeding, and he wanted the council to be spared from any more political turmoil.

Mr McCloy is due to travel overseas tomorrow on a long-planned two-week  family holiday.

The Herald understands that Mr McCloy will continue with a High Court bid to overturn the laws which prevent him being a political donor.

McCloy's letter


The controversy surrounding donations I made in the lead-up to the 2011 NSW elections may affect the proper functioning of Newcastle City Council.

I, therefore, tender my resignation as lord mayor of Newcastle, effective immediately.

I believe that I am leaving the city in much better shape financially and physically than it was when I started.

I would like to personally thank the general manager and staff of Newcastle City Council and the thousands of Novocastrians who supported change in our city.

It has been a privilege serving the people of Newcastle, but now I will leave this to others.

I encourage the elected council to continue focusing on local issues of significance for the Newcastle community and the progression of the city.

Yours Sincerely

Jeff McCloy

But I'm not a developer, says Jeff McCloy

By JASON GORDON Aug. 14, 2014, 11 p.m.

Having conceded that he had made illegal donations to three Liberal MPs before their 2011 elections, he said he had sought no favours in return, was unaware that he was doing the wrong thing, and rumours of his impending resignation were off the mark.

His appearance before the Independent Commission Against Corruption yesterday included yet another bombshell that is  likely to claim the scalp of a third sitting MP and possibly his own, but his admissions also swelled the boiling community pressure on him to relinquish his hold on the mayoral reins.

 In a stunning testimony, Cr McCloy admitted he  handed $10,000 in cash to both Andrew Cornwell (Charlestown) and Tim Owen (Newcastle), had pulled about $1500 from his wallet for the campaign of  Garry Edwards (Swansea), but left question marks over allegations he provided a further $10,000 to each of two Liberal party campaign managers Hugh Thomson and Luke Grant.

He also admitted to meeting Mr Owen twice after his appearance before the ICAC and couldn’t deny allegations that none of the donations had been properly declared to the Electoral Funding Authority.

He told the inquiry  he was first approached by Mr Thomson seeking money for Mr  Owen’s campaign at a meeting also attended by developer Hilton Grugeon and Buildev’s Darren Williams.

Asked  about his knowledge of electoral rules that  ban developers from making donations, he said he did not regard himself as a developer.

 ‘‘Jeff McCloy does not lodge development applications,’’ he said on three occasions. ‘‘I have 33 companies and not all of them are prohibited donors. Any donations in my mind were legal because they were coming from Jeff McCloy and not from a company that lodges development applications.’’

Cr McCloy said he was keen to give to the campaigns because he wanted ‘‘better government’’ in Newcastle, at one stage describing former member for Charlestown Matthew Morris as ‘‘very poor’’.

An invoice produced by Geoffrey Watson, SC, showing that a McCloy company had made the donation was a fake, Cr McCloy said. ‘‘It’s not my invoice, it was dreamt  up by Hugh Thomson,’’ he said.

Asked why he chose to make a donation to Mr Cornwell from  his Bentley, Cr McCloy said he wanted to do so quietly in the same way he made charitable donations.

‘‘I wanted to remain anonymous,’’ he said. ‘‘But that little game plan hasn’t worked out too well.’’

Asked by Mr Watson if he had declared any of the donations to the Electoral Funding Authority, he said he ‘‘never thought about it’’.

 Cr McCloy was also asked if he had bankrolled the council election campaign of Alan Robinson, who switched camps at the eleventh hour  to the McCloy camp. He said he would have to check his records but he ‘‘may have’’.

Of the donation to Mr Edwards, who quit the Liberal ranks shortly after Cr McCloy’s testimony,  Cr McCloy said Mr Edwards had called into his home after visiting  Belmont 16-Foot Sailing Club. He  opened his wallet and ‘‘pulled out whatever was inside, probably about $1500’’.

‘‘I hoped it would help him in his campaign,’’ Cr McCloy told the hearing.

Asked about his financial interests in Newcastle’s business district, Cr McCloy said ‘‘every commercial building I have in Newcastle has lost money over the past six years’’.

‘‘It would be helpful for a property developer to get help from a politician, wouldn’t it,’’ Mr Watson asked. ‘‘What you were doing when handing over money ... you thought you were buying preference.’’

‘‘Absolute rubbish,’’ Cr McCloy fired back. ‘‘I was trying to get some decent government in Newcastle.’’

Newcastle was being ‘‘left out’’ while Labor politicians held the town for ‘‘more than 100 years’’, he said.

In a statement issued earlier, Cr McCloy said ‘‘some people could see my decision to donate to the Hunter campaigns as inappropriate’’.

‘‘I did this with the intention of seeking a better outcome for the Hunter,’’ it read. ‘‘These donations were given with no intention of seeking political favour.

 ‘‘I have always been a vocal and active supporter of ensuring the Hunter receives better funding and treatment from government,’’ he said.  ‘‘In hindsight, I would have made the donations differently. However they were not entered into for personal gain, rather merely following what I believe is my constitutional right to be part of the political process.’’

Jeff McCloy admits giving cash to Swansea MP Garry Edwards

By MICHELLE HARRIS Aug. 14, 2014, 12:30 p.m.

JEFF McCloy has admitted to the ICAC he gave cash to a third Hunter Liberal, Swansea MP Garry Edwards.

Mr McCloy, a property developer and the Lord Mayor of Newcastle, said Mr Edwards had come to see him and he gave him "whatever I had in my wallet" - $1500 for "raffle tickets".

It follows revelations he gave $10,000 cash in envelopes to both Tim Owen and Andrew Cornwell for their 2011 campaigns in Newcastle and Charlestown.

Both were forced to resign on Tuesday.

"Who apart from Owen, Cornwell and Edwards- which other politicians did you give cash to?" Counsel assisting the inquiry Geoffrey Watson SC asked.

"That’s all I recall," the Lord Mayor replied.

Asked if he’d given money to Maitland MP Robyn Parker, Mr McCloy said he’d had his staff go through all his records and couldn’t find anything.

"I have a nagging thing in the back of my head about some CDs for her husband," he said.

"Was that so, I am not sure."

He said many people-politicians- came to see him for money and he felt

like a "walking ATM".

His evidence is continuing.

Jeff McCloy awaits his turn at inquiry

By JASON GORDON Aug. 12, 2014, 11 p.m.

Newcastle lord mayor Jeff McCloy is dismissing any suggestion he stand aside until he has the opportunity to defend allegations against him before the ICAC.

Newcastle lord mayor Jeff McCloy is dismissing any suggestion he stand aside until he has the opportunity to defend allegations against him before the ICAC.

HIS detractors want him gone, but his supporters are hanging on. The man himself, Newcastle lord mayor Jeff McCloy, says he’s not going anywhere until he gets a fair hearing before the corruption inquiry that has now claimed two major Hunter scalps.

Premier Mike Baird and Local Government Minister Paul Toole had no sooner called for the resignation of Tim Owen and Andrew Cornwell yesterday before turning their blowtorch on the embattled lord mayor.

Greens councillors, independent Lake Macquarie MP Greg Piper and the vast majority of those voting in online opinion polls yesterday joined the call for Cr McCloy to step aside, but the lord mayor remained defiant, saying he deserved the right to state his case before the Independent Commission Against Corruption, where he is due to appear on Thursday.

Greens councillors Michael Osborne and Therese Doyle made formal moves on Tuesday afternoon for Cr McCloy to provide a ‘‘full and frank account’’ of the allegations made against him at an urgent meeting of the council, but the move may have backfired.

The pair’s submission wanted the meeting held within 48 hours and called on Cr McCloy to reveal the extent to which he or his companies donated money to the Owen and Cornwell campaigns.

They further demanded to know if the lord mayor had funded the campaigns of any candidates who stood for council election after developers were banned from making such donations on January 1, 2010.

If the information wasn’t forthcoming, their motion called for the lord mayor’s resignation ‘‘in order to protect the good name of council and the confidence of the City of Newcastle’s residents and ratepayers’’.

“It is not good enough to simply wait for an explanation in ICAC,’’ Cr Osborne said. ‘‘As an elected official, Mr McCloy also owes a direct explanation to residents and ratepayers in Newcastle.

“This is about ensuring that council holds the lord mayor to account, this is the job of an elected local council and it’s one that the Greens will not shirk.’’

ICAC and local government regulations, however, would not allow for such a meeting to be held within 48hours. ICAC holds higher authority and it has already called the lord mayor to give his evidence tomorrow. Local government rules require three days’ notice of such a meeting.

Councillors seek urgent meeting with lord mayor Jeff McCloy

By JASON GORDON Aug. 12, 2014, 4:25 p.m.



NEWCASTLE councillors have called for an urgent meeting with lord mayor Jeff McCloy, seeking an explanation of matters raised in the Independent Commission Against Corruption.

Greens councillors Michael Osborne and Therese Doyle lodged a formal application for an extraordinary meeting on Tuesday afternoon, demanding that the meeting be held within 48 hours.

In their application, the councillors are seeking a ‘‘full and frank account’’ of any money that the lord mayor or his companies gave to the campaigns of Liberal MPs Andrew Cornwell and Tim Owen. They are also seeking an answer to whether or not he donated to council election candidates in the time since donations from developers were banned on January 1, 2010.

If the lord mayor fails to provide the information, they will call on him to ‘‘resign his office as lord mayor and councillor in order to protect the good name of council and the confidence of the City of Newcastle’s residents and ratepayers’’.

Further, if the lord mayor refuses to stand aside, the council would move to review ‘‘all existing delegations granted to the lord mayor’’.

The move follows calls from NSW Premier Mike Baird and local government minister Paul Toole who also called for Cr McCloy to stand aside.

Cr McCloy has so far dismissed any suggestion that he stand aside until he has the opportunity to defend the allegations made against him before the ICAC. At this stage, he was scheduled to appear before the ICAC on Thursday but that date may change.

If the lord mayor was forced to resign, a full by-election would need to be held.

Cr Doyle conceded that the lord mayor deserves his day in court ‘‘but he also needs to come clean with the councillors and the people of Newcastle who deserve to know as much as ICAC does’’.

Cr Osborne said ‘‘he should speak as the lord mayor and not as a developer - a full and frank account of his version’’.

While the councillors have called for the meeting to be held within 48 hours, the council’s code of practice requires it to be held within 14 days of the lodgement date.

Separately, Lake Macquarie MP Greg Piper has called for a probity audit of decisions made about Newcastle's CBD following the evidence heard in the Independent Commission against Corruption.

ICAC heat on Newcastle lord mayor Jeff McCloy





THE Liberal Party's nightmare in Newcastle looks to continue this week as the Independent Commission Against Corruption (ICAC) hears more evidence of allegations of corruption.

Last Wednesday ICAC heard that Newcastle state MP Tim Owen's campaign manager Hugh Thomson was at the centre of illegal funding for Mr Owen's campaign.

It heard local property developers Hilton Grugeon and Jeff McCloy (who is also now the Newcastle mayor) allegedly paid for Luke Grant and Josh Hodges to work on Mr Owen's campaign, issuing sham invoices.

Shortly after the opening proceedings, Mr Owen and Charlestown state MP Andrew Cornwell announced they would leave the Liberal Party and stand aside from any parliamentary positions.

On Thursday Mr Cornwell took to the stand, admitting he took $20,000 from property developers.

He said he took one $10,000 bribe from property developer Hilton Grugeon as payment for a painting given to his wife and worth much less, to pay his business tax.

Mr Cornwell, who is a vet, also admitted to leaving his surgery during an operation on a dog to meet Mr McCloy in his car, taking $10,000, which he eventually handed to the Liberal Party branch.

On Friday he announced he would not recontest the next state election and had resigned from the party.

On Monday Mr Owen said Mr McCloy had also handed him $10,000 in an envelope but returned it the next day.

Local Newcastle Labor councillors called for Mr McCloy to resign as mayor, with a meeting on Tuesday.

This week's list of witnesses to be interviewed by ICAC include Mr Grugeon (Wednesday), Mr McCloy (Thursday), and developers Keith Stronach and Bill Saddington (Friday).