ICAC finds against Chris Hartcher

The former Member for Terrigal, Mr Christopher Hartcher, has been found by the NSW Independent Commission Against Corruption (ICAC) to have acted with the intention of evading election funding laws by: failing to properly disclose political donations worth "hundreds of thousands of dollars"; accepting donations from property developers; and breaching caps on political donations that applied after January 1, 2011.

The ICAC also wanted consideration given to seeking advice from the DPP to prosecute Mr Hartcher for an alleged offence of larceny.

The ICAC's Operation Spicer investigation exposed prohibited donations, fund channelling and non-disclosures in the NSW Liberal Party's 2011 state election campaign and identified Mr Hartcher as a key player in a considerable number of transactions relating to the party's Central Coast campaign.

The Commission did not uncover any irregularities in the seat of Gosford, at that time held by former Gosford mayor Mr Chris Holstein.

The Commission's report, Investigation into NSW Liberal Party electoral funding for the 2011 state election campaign and other matters, was made public on Tuesday, August 30.

The ICAC made factual findings but could not make findings of Corrupt Conduct in relation to conduct that "only relied on a breach of the Election Funding, Expenditure and Disclosures Act 1981".

Outcomes from the ICAC findings are also expected to be limited because the time limit on prosecutions has expired.

In relation to the alleged offence of larceny, the ICAC report said: "The Commission is of the opinion that consideration should be given to obtaining the advice of the DPP with respect to the prosecution of Mr Hartcher for an offence of larceny in relation to his dealings with ... three bank cheques payable to the NSW Liberal Party totalling $4000," it said.

"The Commission notes section 116 of the Crimes Act 1900, which provides that, 'Every larceny, whatever the value of the property stolen, shall be deemed to be of the same nature, and shall be subject to the same incidents in all respects, as grand larceny was before the passing of the Act seventh and eighth George the Fourth, chapter 29'.

According to ICAC, in March 2011, Mr Hartcher received three bank cheques payable to the NSW Liberal Party totalling $4000.

"They were received by Mr Hartcher for the benefit of the NSW Liberal Party for the March 2011 state election campaign.

"In November 2011, some eight months after the election, Mr Hartcher arranged for the cheques to be paid into the trust account of Hartcher Reid, a legal firm, and for that firm to draw a cheque for $4000 in favour of Mickey Tech, a business owned by the partner of Mr Raymond Carter, an electorate officer working for Mr Hartcher.

Mr Hartcher's own evidence to ICAC would be inadmissible in any larceny case but the Commission's report said other evidence would be admissible, "including the evidence of Mr Carter, ... Mr Sriwattanaporn, ... Sebastian Reid, ... Marie Neader, ... Annette Poole, associated bank records, and internal documents of Hartcher Reid,' the ICAC report said.

In addition to the larceny allegation, the key factual findings in the ICAC report included the use of the business of Mr Timothy Koelma, called Eightbyfive, to receive and channel political donations for the benefit of the NSW Liberal Party, Mr Hartcher, and other Central Coast Liberal candidates for the 2011 Central Coast election campaign.

The use of Eightbyfive, according to ICAC, was with the intent of evading the election funding laws.

According to the ICAC report, Mr Hartcher was involved in the establishment of Eightbyfive and took an active part in using it to channel political donations from Australian Water Holdings Pty Ltd ($183,342.50 between April 2009 and May 2011), Gazcorp Pty Ltd ($121,000 between May 2010 and April 2011) and Patinack Farm Pty Ltd ($66,000 between July 2010 and March 2011) for the benefit of the NSW Liberal Party, himself and other Liberal candidates and with the intention of evading the election funding laws.

Each time payments were made to Eightbyfive, ICAC found they were ostensibly for the provision of services by the business to the donors, but were, in fact, political donations.

According to ICAC, payments from each arrangement made after January 1, 2011, exceeded the applicable cap on political donations.

In the case of Patinack Farm, the payments to Eightbyfive were made by Patinack Farm but the arrangement was organised through Buildev, a property developer.

Another of the factual findings in the ICAC report related to Mr Hartcher being involved in an arrangement in late 2010 with the Hon Michael Gallacher and Buildev director, Mr Darren Williams, whereby two political donations totalling $53,000 were provided to the NSW Liberal Party for use in its 2011 election campaigns for the seats of Newcastle and Londonderry.

"Each of Mr Gallacher, Mr Hartcher and Mr Williams entered into this arrangement with the intention of evading the Election Funding Act laws..." ICAC said.

The chapter of the ICAC report dedicated to the Central Coast 2011 Liberal Party election campaign said Mr Hartcher was a lawyer by training.

"He worked for a period in private practice on the Central Coast before entering the Legislative Assembly in 1988 as the member for the seat of Gosford.

"He continued as a Member of Parliament until March 2015.

"In 1992, he was appointed Minister for the Environment and, between 1995 and 2011, held several different shadow ministries.

"In 2002 and 2003, he was Deputy Leader of the Opposition.

"Following a re-distribution, in 2007, Mr Hartcher contested, and won, the seat of Terrigal.

"After the Coalition success in the March 2011 election, Mr Hartcher was appointed concurrently to three Ministries, Special Minister of State, Resources and Energy, and the Central Coast.

"He held these ministries until December 2013.

"By 2011, Mr Hartcher was a significant and influential member of the NSW Liberal Party.

"He had given long service and he was a key member of the leadership group within the NSW Liberal Party.

"Simon McInnes recounted a discussion when Paul Nicolaou said, 'What Hartcher wants Hartcher gets'."

Before the 2011 election, Mr Hartcher held the seat of Terrigal, and the other three seats were held by the NSW Labor Party.

"As a Shadow Minister and an experienced and successful campaigner, Mr Hartcher was regarded as the NSW Liberal Party leader on the Central Coast.

"There is other evidence, which the Commission accepts, indicating that Mr Hartcher had a strong personal role in raising funds for the Central Coast."

In relation to his understanding of the law relating to political donations, the report said: "The Commission is satisfied that, at all relevant times, Mr Hartcher was aware of the requirements of the Election Funding, Expenditure and Disclosures Act 1981 relating to the need for accurate disclosure of political donations, the ban on accepting political donations from property developers, and the applicable caps on political donations."

The ICAC report also said: "Following a careful consideration of Mr Hartcher's evidence, the Commission is of the view that it is unreliable.

"His evidence on various matters was inconsistent with the objective facts," ICAC said in its report and cites several examples.

Since the release of the ICAC report, Mr Hartcher has stated publicly that he intended to fight any further actions in relation to its conduct coming from its findings.

Media release, 30 Aug 2016

Nicole Thomas, Independent Commission Against Corruption