Sinodinos unaware of AWH donations, costs

Senator Arthur Sinodinos says he was aware that people from Australian Water Holdings were attending Liberal Party events, but not how much the company was donating to the party.

He had seen the people from the infrastructure company at events, and had also seen invitations. Some of them had a previous history with the party, he said.

“I did not know in precise terms what was being donated to the Liberal Party, “ Senator Sinodinos told the Independent Commission against Corruption in Sydney.

Challenged about what he meant by the word “precisely,” the former NSW Liberal Party treasurer said: “I couldn’t quote amounts at you, or over what period.”

The ICAC is probing allegations AWH billed the state-owned Sydney Water for luxury travel, lavish salaries and limousine rides as it rolled out water and sewerage infrastructure in Sydney.

Senator Sinodinos, who became an AWH director in 2008 and was later appointed chairman of the company, has stepped aside as assistant treasurer during the ICAC inquiry.

It’s been alleged Senator Sinodinos was hired by AWH for his Liberal contacts, because the board of AWH suspected the then-Labor state government was likely to lose the 2011 election.

Senator Sinodinos told the Senate last year that he was unaware of donations made by the company to the Liberal Party, despite being chairman of AWH and treasurer and then president of the NSW Liberal Party. The issue of donations had never been raised at a board level, he said in a personal explanation in February 2013.

Today, in evidence to the corruption watchdog, he said donations were a matter for the management.

They were also handled by the Liberal Party secretariat. He couldn’t recall anyone at the party mentioning it to him, he said.

Senator Sinodinos, who the ICAC has been told was paid more than $200,000 for up to 100 hours of work a year for AWH, said he had never held a right to shares in the company.

He said he was shown a letter his lawyer wrote relinquishing his rights to shares.

He also denied he had come to a gentlemen’s agreement with Liberal powerbroker and former AWH chairman Nick Di Girolamo to hold the shares in trust for him because of tax issues.

Senator Sinodinos admitted that while on the board he did nothing to find out why costs at Australian Water Holdings were going “through the roof”.

Counsel assisting Geoffrey Watson SC has told the inquiry that at a time when AWH’s works were practically complete, costs were ballooning from an anticipated $200,000 a month to “$300-, $400- and then $600- then $800,000 a month’’.

Senator Sinodinos said the company had legal advice that Sydney Water, in its attempts to audit AWH’s billings, was asking for information to which it was not entitled and may have been acting in bad faith.

“You did nothing to ascertain the facts behind the escalation of Australian Water Holding’s costs. Just answer the question,’’ Mr Watson said.

“Not specifically, no,’’ Senator Sinodinos said.

He said he never sought a meeting with the chief financial officer and relied on reports to the board and board papers.

Nor, Senator Sinodonis said, did he remember the head of Sydney Water Dr Kerry Schott warning him about the honesty of people at Australian Water Holdings.

Dr Schott has given evidence that in 2010 she met with the then Mr Sinodinos and warned him about “the company he was keeping’’, because the people he was working with at AWH might be dishonest.

“I don’t remember her using the word dishonest,’’ Senator Sinodinos said.

“That’s a pretty heavy word.’’

Quizzed about the company’s connection with the family of disgraced Labor MP Eddie Obeid, Senator Sinodios said he was unaware the Obeid family had lent the company $400,000 to pay its tax.

Asked about salaries at AWH, Senator Sinodinos said that one director’s salary of $1.6 million was so high because he was both a director and a shareholder.

He was asked, given the money was coming from Sydney Water, if that was too high. “In what context?” he said.

He said he didn’t know what the executives were paid.

Mr Watson asked the senator what precisely he did as a director for three years if he didn’t monitor executives’ salaries.

Senator Sinodinos replied that the agenda was dominated by disputes with Sydney Water.

Mr Watson then asked he if he ever knew the company was paying for a box at Stadium Australia.

Senator Sinodinos said it was raised at a board meeting and further information was going to provided, he said.

Senator Sinodinos agreed that paying for a corporate box was a concern when the company was not paying its superannuation obligations.

He was unaware that the company had spent $28,000 on limousines, apart from one occasion when he used a hire car himself to go to Parramatta for a meeting.

He was also unaware that his friend Paul Nicholaou had been paid a $5000 monthly retainer to his consultancy firm, or $159,000 in total. He agreed he had never seen any evidence of his work, or any output.

The issue had never come up in conversation despite regular contact with Mr Nicholaou, who was the head of the Liberal Party’s fundraising arm.