Key posts
- The day in review
- Berejiklian appeared personally interested in Wagga Wagga project, NSW bureaucrat says
- Ayres brands claim of ‘sweetheart deal’ with Maguire a fantasy
- Berejiklian-Maguire relationship should have been disclosed, but no ‘private benefit’: Ayres
- The morning’s evidence at a glance
- No deal with Berejiklian over Wagga Wagga project, Ayres says
- ‘I thought the project had a lot of merit,’ Ayres says of Wagga Wagga project
- Ayres bats off early requests for funding for Wagga Wagga project
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The day in review
Good evening and thank you for reading our live coverage of the fifth day of the ICAC’s hearings in Operation Keppel, its inquiry into former NSW Liberal MP Daryl Maguire and former NSW premier Gladys Berejiklian.
If you are just joining us now, deputy NSW Liberal leader and Trade and Industry Minister Stuart Ayres gave evidence at the ICAC’s Sydney headquarters today, followed by Department of Regional NSW secretary Gary Barnes. Neither man is accused of wrongdoing.
Stuart Ayres arrives at the ICAC on Friday.Credit:Kate Geraghty
Mr Ayres was Sport Minister in 2016 when Mr Maguire lobbied the state government and Mr Ayres’ office for a multimillion-dollar grant for a gun club in his electorate of Wagga Wagga, the Australian Clay Target Association. Mr Barnes’ department was asked to work with external consultants on a business case for the project.
The ICAC has heard that Gladys Berejiklian, then NSW treasurer, and Mr Maguire were in a relationship at the time that cabinet’s expenditure review committee, chaired by Ms Berejiklian, signed off on a conditional $5.5 million grant for the club December 2016. Their relationship started in 2015 and continued until 2018.
This is one of two grants or funding promises made by the state government that is being examined by the ICAC.
The ICAC heard the following evidence today:
- Mr Ayres said Ms Berejiklian should have disclosed that she was in a relationship with Mr Maguire in December 2016 when she was NSW treasurer and involved in considering the proposal to fund the gun club upgrade. He said this would have been “prudent” so that any conflict of interest could be managed. However, Mr Ayres added that he couldn’t see how Ms Berejiklian or Mr Maguire would “derive a private benefit from this project”.
- A memo tendered in evidence at the ICAC earlier this week recorded the then-NSW premier Mike Baird’s director of strategy, Nigel Blunden, telling Mr Baird in December 2016 that “no doubt” Mr Ayres and Ms Berejiklian had done a “sweatheart [sic] deal” with Mr Maguire about funding for the project. Mr Ayres today dismissed that as “fantasy” and said he couldn’t recall discussing it with Ms Berejiklian.
- Mr Maguire lobbied Mr Ayres about the grant in 2014 and again in 2016. In March 2016, Mr Ayres advised Mr Maguire that he did not have a source of funding for the upgrade. Mr Maguire wrote to him again about a having a meeting about the project, and Mr Ayres subsequently visited the site in Wagga Wagga.
- By mid-2016, Mr Ayres had agreed that the government would give the association $40,000 to prepare a business case to support its application for millions of dollars in government funding. He said this was not unusual, and did not agree with evidence given by a NSW Office of Sport bureaucrat in a private hearing at the ICAC that it was not standard practice for non-government entities to be given funding for business cases.
Daryl Maguire and Gladys Berejiklian.Credit:SMH
- Mr Ayres said the resultant business case was “strong” with an estimated a benefit cost ratio (BCR) of 2.31. However, he also regarded that figure as “optimistic”. Two men who worked in the NSW Office of Sport at the time have given evidence that the business case was scant. Mr Ayres did not recall being told of these criticisms.
- Mr Ayres’ office asked the Office of Sport to prepare an urgent funding submission for the project to be considered by cabinet’s expenditure review committee in late 2016. Mr Ayres said the application was urgent because the association had secured a world championship clay target shooting event in 2018. However, he said the event would proceed regardless of any upgrade of facilities.
- In December 2016 the expenditure review committee signed off on a $5.5 million grant for the association, contingent on the production of a satisfactory business case. Mr Ayres said the initial business case was “satisfactory enough to approve the funding” and “this looks like a pretty stock standard activity by the ERC”.
- Gary Barnes, secretary of the Department of Regional NSW, gave evidence about his department’s involvement in the preparation of an updated business case for the gun club upgrade. He said it appeared to him in 2017 that Ms Berejiklian, who had then taken over from Mike Baird as premier, had an interest in the project. He did not speak to the premier but said “various staff in her office gave me the impression the premier had an interest in this project”. “The interest at least I surmised … was the fact that the local member [Mr Maguire] asked for regular updates and he was robust in getting updates,” Mr Barnes said. Mr Barnes agreed that the project seemed to have a particular focus or priority at a political level.
- Mr Barnes said Peter Minucos, an adviser in the office of the then Deputy Premier John Barilaro, was involved in the development of an updated business case for the gun club project in 2017. Mr Barnes said Mr Minucos “inserted himself into a process that typically public servants would have taken control of”. Mr Barilaro was the portfolio minister for the Department of Regional NSW at the time. He and Mr Minucos will give evidence at the ICAC next week and are not accused of wrongdoing.
- A revised business case for the project, developed in 2017 by external consultants with input from the government, initially produced a benefit to cost ratio of below one, which would not justify the investment. It was later increased to 1.1.
Ms Berejiklian has denied all wrongdoing and is slated to give evidence at the ICAC next week on Thursday and Friday. However, the inquiry is already expected to spill into a third week and the timetable may change.
This is Michaela Whitbourn signing off on the blog for today. I’ll be back on Monday before 10am with more from the ICAC.
ICAC hearing adjourns to Monday
The ICAC has adjourned its hearing until Monday. As foreshadowed yesterday, the inquiry will continue all through next week and is now likely to spill into a third week.
Berejiklian appeared personally interested in Wagga Wagga project, NSW bureaucrat says
Gary Barnes, secretary of the Department of Regional NSW, has told the ICAC that it appeared to him that the then NSW premier Gladys Berejiklian had an interest in the multimillion-dollar upgrade of the Australian Clay Target Association in then NSW Liberal MP Daryl Maguire’s electorate of Wagga Wagga.
Ms Berejiklian was treasurer in December 2016 when cabinet’s expenditure review committee signed off on a conditional $5.5 million grant to the association and became premier in January 2017.
Gladys Berejiklian and former MP Daryl Maguire were in a secret relationship between 2015 and 2018.Credit:AAP, Janie Barrett
Mr Barnes said his contact with the premier was not direct but “various staff in her office gave me the impression the premier had an interest in this project”.
“The interest at least I surmised … was the fact that the local member asked for regular updates and he was robust in getting updates.
“At least in my mind her interest would have been that that information was flowing back to him, so he was apprised of where things were up to.”
He said that all political offices liked to keep their backbenchers happy.
Mr Barnes agreed that the project seemed to have a particular focus or priority at a political level. It appeared to him that “amongst a small number of projects, this is one that seems a bit different to others at a political level”.
The ICAC is investigating the circumstances in which the state government made the grant to the association.
The inquiry has previously heard that Ms Berejiklian and Mr Maguire were in a secret relationship between 2015 and 2018.
Ms Berejiklian has yet to give evidence at the inquiry. She has denied wrongdoing and has said history will show that she acted at all times in the best interests of the people of NSW.
Barilaro staffer ‘inserted himself’ into business case process, ICAC told
As the ICAC has previously heard, the first draft of an updated business case for a multimillion-dollar, state government-funded upgrade of the Australian Clay Target Association in Wagga Wagga estimated that the benefit to cost ratio was below one.
This was the business case that was written after the state’s expenditure review committee signed off on a $5.5 million grant to the association that was conditional on a satisfactory business case.
A ratio below one did not justify state government agency Infrastructure NSW approving the funding.
A second version of the business case, prepared by external consultants in 2017 with input from the Department of Regional NSW and Deputy Premier John Barilaro’s office, increased that benefit to cost ratio to 1.1.
Former NSW Deputy Premier John Barilaro will give evidence at the ICAC next week. He is not accused of wrongdoing.Credit:Dominic Lorrimer
Gary Barnes, secretary of the Department of Regional NSW, told the ICAC that Peter Minucos, a staffer in the office of then Deputy Premier John Barilaro, was working with Department of Regional NSW deputy secretary Chris Hanger “to have a look at whether further things could be added to the business case”.
Mr Barnes said Mr Minucos “inserted himself into a process that typically public servants would have taken control of”. Mr Barilaro was the portfolio minister for the Department of Regional NSW.
“I wasn’t pleased about that; it wasn’t something that typically was the domain of ministerial office staffers,” Mr Barnes said.
“I was made privy to an email chain which indicated that he was working almost [directly with] the consulting firm to further augment the revised business case that we put forward for appraisal.”
Mr Barnes said he ultimately made his view known to the Deputy Premier’s office that this was inappropriate.
Mr Barilaro and Mr Minucos are expected to give evidence at the ICAC on Monday. Neither man is accused of wrongdoing.
Department of Regional NSW worked to make business case ‘more robust’
Gary Barnes, secretary of the Department of Regional NSW, has told the ICAC that his department worked with a consultancy firm to make the business case for the state government funding a multimillion-dollar upgrade of the Australian Clay Target Association in Wagga Wagga “more robust”.
Chris Hanger, a deputy secretary in the department, was brought on board in early 2017 to help with this process. Mr Hanger gave evidence at the ICAC on Thursday.
In December 2016, the state government’s expenditure review committee had signed off on $5.5 million in funding for the association that was conditional on a satisfactory business case.
Mr Barnes and Mr Hanger are both witnesses and neither is accused of wrongdoing.
Bureaucrats believed ‘more robust business case’ needed for Wagga Wagga proposal
Gary Barnes, secretary of the Department of Regional NSW, has told the ICAC that bureaucrats in his unit were generally supportive of the state government considering a proposal to fund a multimillion-dollar upgrade of the Australian Clay Target Association in Wagga Wagga but they believed it needed a “more robust business case”.
The ICAC has previously heard that the then NSW Liberal MP for Wagga Wagga, Daryl Maguire (pictured below), was a vocal proponent of the project.
Former Liberal MP Daryl Maguire lobbied the government to award the funding to the Australian Clay Target Association in his electorate.Credit:Nick Moir
Mr Barnes said “the turnaround was quite quick” to provide advice on the proposal that was being taken before cabinet’s expenditure review committee in December 2016.
Mr Barnes is not accused of wrongdoing and is a witness at the inquiry.
Mr Barnes said the opinion of bureaucrats in his team was that it “looked as though it could be a good regional project” but “further work would need to be done on a business case”.
NSW Trade and Industry Minister Stuart Ayres gave evidence at the ICAC earlier today that he believed the business case was “strong”, although the benefit to cost ratio appeared to him to be optimistic.
Mr Ayres was then the Sport Minister and was lobbied by Mr Maguire to back the project. Mr Ayres was not accused of wrongdoing and appeared at the inquiry as a witness.
NSW bureaucrat Gary Barnes starts giving evidence
Trade and Industry Minister Stuart Ayres has left the witness box.
Gary Barnes, the secretary of the Department of Regional NSW, has started giving evidence at the ICAC via videolink. He is not accused of wrongdoing.
The responsible minister for that department is now Deputy Premier Paul Toole. It was previously John Barilaro.
The department has had a few different guises and was once an agency that sat within the Department of Premier and Cabinet. Mr Barilaro, then deputy premier, was still the responsible minister at this time.
Mr Barnes said his department was asked to give advice on a proposed funding submission to cabinet’s expenditure review committee about the multimillion-dollar grant to the Australian Clay Target Association.
As noted below, this grant has been at the centre of questions today at the ICAC.
Ayres brands claim of ‘sweetheart deal’ with Maguire a fantasy
One of former NSW premier Gladys Berejiklian’s barristers, Sophie Callan, SC, is asking Trade and Industry Minister Stuart Ayres some questions now.
Ms Callan is taking him to a memo tendered in evidence at the ICAC earlier this week that recorded the then-NSW premier Mike Baird’s director of strategy, Nigel Blunden, telling Mr Baird in December 2016 that “no doubt” Mr Ayres and Ms Berejiklian had done a “sweatheart [sic] deal” with then NSW Liberal MP Daryl Maguire about funding for the gun club in Mr Maguire’s electorate.
Sophie Callan, SC (centre), who is representing Gladys Berejiklian at the ICAC.Credit:Kate Geraghty
Mr Ayres, now Trade and Industry Minister, was then Sport Minister and Ms Berejiklian was NSW treasurer. Ms Berejiklian was also in a secret relationship with Mr Maguire which started in 2015 and ended in 2018.
Asked by Ms Callan if that statement about a “sweetheart deal” was speculative, Mr Ayres replied: “Fantasy would be a good word.”
Mr Ayres is giving evidence at the inquiry and has not been accused of wrongdoing.
Ms Berejiklian has denied wrongdoing and is slated to give evidence at the inquiry next week.
Asked if Mr Maguire was respected in the party room, Mr Ayres agreed.
Berejiklian-Maguire relationship should have been disclosed, but no ‘private benefit’: Ayres
Trade and Industry Minister Stuart Ayres had told the ICAC that Gladys Berejiklian, then the NSW treasurer, should have disclosed her secret relationship with then NSW Liberal MP Daryl Maguire when she was on a cabinet committee examining a grant to an organisation in his electorate.
The ICAC heard surprise evidence last year that Ms Berejiklian and Mr Maguire, the then member for Wagga Wagga, were in a relationship between 2015 and 2018.
Gladys Berejiklian and Daryl Maguire were in a relationship between 2015 and 2018.Credit:Steven Siewert, James Brickwood
Ms Berejiklian was treasurer in December 2016 and chair of cabinet’s expenditure review committee when it signed off on a $5.5 million conditional grant to the Australian Clay Target Association to upgrade its facilities. Mr Maguire had been a vocal proponent of this project.
Mr Ayres said he only became aware of the Berejiklian-Maguire relationship when Ms Berejiklian gave evidence at the ICAC last year.
“I would have been concerned that a conflict needed to be managed,” Mr Ayres said when asked what he would have done differently if he had known about the relationship.
The ministerial code of conduct provided ways to manage conflicts, Mr Ayres said.
He said he still couldn’t see how Ms Berejiklian or Mr Maguire would “derive a private benefit from this project” but it would have been a “prudent course of action” to disclose the relationship “to avoid or manage conflicts”.
Ms Berejiklian has denied wrongdoing. She is slated to give evidence at the inquiry next week.
‘I knew it hadn’t been subject to any independent review’: Ayres
The ICAC hearing has resumed after lunch.
Trade and Industry Minister Stuart Ayres has told the ICAC he knew that a proposal for the state government to spend millions of dollars upgrading a Wagga Wagga gun club had not been the subject of an independent review when he submitted it to cabinet’s expenditure review committee in December 2016.
Trade and Industry Minister Stuart Ayres.Credit:Dominic Lorrimer
As we note below, Mr Ayres was then the Sport Minister. He said he can’t recall any discussions about bureaucrats in the NSW Office of Sport being concerned about the fact the business case had not been reviewed.
He has been called to give evidence in the inquiry but has not been accused of wrongdoing.
Mr Ayres denied that the reason he said in a December 2016 email that “perhaps Gladys [Berejiklian] and I need to write to Daryl [Maguire]” was because a letter on then-NSW treasurer Ms Berejiklian’s letterhead would stop the office of the deputy premier killing the project, which was pushed by Mr Maguire.
As the ICAC has heard earlier this morning, cabinet’s expenditure review committee signed off on a $5.5 million grant to the club conditional on a satisfactory business case being produced.
Mr Ayres was taken to his evidence in a private hearing at the ICAC earlier this year. Asked at that time if there was a concern that the deputy premier’s office might be trying to kill the project and a letter on treasurer’s letterhead would make that more difficult, he said: “I think that’s a reasonable conclusion to draw … but personally I don’t have the recollection.”
Mr Ayres said today that “I said it was plausible but highly unlikely”.
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