McCloy’s challenge rejected

A LARGE roadblock has cleared for the state’s corruption watchdog to release long-awaited findings of its inquiry into secret donations to Hunter Liberal MPs, with the High Court rejecting Jeff McCloy’s challenge to NSW election funding laws.

McCloy’s challenge rejected

Former Newcastle lord mayor Jeff McCloy leaves the Independent Commission Against Corruption after giving evidence last year.

Former Newcastle lord mayor Jeff McCloy leaves the Independent Commission Against Corruption after giving evidence last year.

A LARGE roadblock has cleared for the state’s corruption watchdog to release long-awaited findings of its inquiry into secret donations to Hunter Liberal MPs, with the High Court rejecting Jeff McCloy’s challenge to NSW election funding laws.

 

In a decision handed down on Wednesday, the court upheld the state’s ban on property developers making donations and caps on the amount of money that can be given for state campaigns, finding the measures limited political communication but did so for legitimate anti-corruption purposes.

Do you agree with the High Court decision that upholds the ban on political donations by developers in NSW? (Poll Closed)
Yes 82.66%  (453 votes)

No 17.34%  (95 votes)

Total Votes: 548
The ruling was greeted by many as “good news for democracy” and sparked renewed calls for sweeping federal election funding reform and for the caps to be extended to local government.

 

But it is a major and expensive defeat for Mr McCloy.

 

Had he won, the laws would have been declared invalid, forcing the Independent Commission Against Corruption to abandon any findings it may possibly make against him over his secret support for Hunter Liberal candidates in the lead up to 2011 state election.

 

Instead, the former Newcastle lord mayor will have to pin his hopes on a separate Supreme Court push to prevent ICAC releasing its report, and in the meantime pick up a bill for legal fees of about $2 million.

 

He insisted on Wednesday he “wasn’t dirty on the world” and would move on.

 

Mr McCloy, who was in Queensland when the verdict was delivered, told the Newcastle Herald it “still beggars belief that some citizens of NSW aren’t allowed the same political rights as others” but he’d accept the High Court’s decision.

 

“I undertook this court case as I felt it was important to question the current law,” he said. “I believe that anyone, regardless of his or her position, should be entitled to participate in the democratic process.

 

“The High Court has ruled otherwise and I respect the decision.”

 

Mr McCloy launched the challenge against the State of NSW in July last year, a month ahead of his appearance before the ICAC’s Operation Spicer.

 

During that inquiry, Mr McCloy admitted to giving envelopes stuffed with $10,000 cash to then Liberal Newcastle and Charlestown candidates Tim Owen and Andrew Cornwell.

He also gave at least $1500 to Swansea candidate Garry Edwards, and helped pay the wages of Mr Owen’s media manager.

 

All three were elected to Parliament, but were forced to resign or move to the cross bench over the revelations.

 

Mr McCloy’s legal team argued in the High Court that the donation caps of $5000 to a party or $2000 to a candidate, the developer ban, and a ban on “in kind” support for campaigns, were an impermissible burden on the implied freedom of political communication in the constitution.

 

This was because they removed his access to candidates and parties and ability to influence the political process that could be gained from making large donations – an argument Justice Stephen Gageler labelled “as perceptive as it is brazen”.

 

The court unanimously upheld the caps and indirect contributions ban, finding the provisions enhanced the system of representative government.

 

By a majority, it endorsed the developer ban as in the public interest of removing the risk and perception of corruption, noting a history in New South Wales of corruption involving developers and the role of the state government in making planning decisions that could serve their commercial interests.

 

The architect of the developer ban, Nathan Rees, who was rolled as Labor premier soon after introducing it in 2009, said he was delighted with the decision.

 

“Public confidence in our political system is not negotiable, ” Mr Rees said.

 

“Today’s decision is a necessary step for transparency and accountability in NSW.”

University of Sydney Professor of Constitutional Law Anne Twomey said Mr McCloy’s challenge could have brought down “the entire edifice” of NSW’s electoral funding system.

 

But the “reassuring” ruling meant there was “not an excuse any more” for other governments not to implement tighter electoral funding laws because of concerns that they may be unconstitutional.

Premier Mike Baird said  the decision opened the way for consideration of national reforms to political donations.

 Premier Mike Baird said the decision opened the way for consideration of national reforms to political donations.

Premier Mike Baird said: “The decision opens the way for consideration of national reforms to political donations laws at COAG.”

 

The Greens urged Prime Minister Malcolm Turnbull to support a federal ban on donations from certain industries.

 

“A federally-legislated ban on political donations from developers, tobacco, alcohol, gambling and mining industries, which are perceived as having an inappropriate influence on decision makers, would help clean up politics,” Greens Senator Lee Rhiannon said.

  NSW Opposition Leader Luke Foley

 NSW Opposition Leader Luke Foley

NSW Labor leader Luke Foley said the caps on state donations and campaign spending should be immediately extended to local government elections.

 

“It defies logic that Mike Baird and I can run for office and be subject to strict caps, while at the same time you can run for a ward of a suburban council without any limits on what you can raise and spend,” Mr Foley said.

 

Lake Macquarie independent MP Greg Piper said the decision was a good outcome for the public.

 

“While I respect Mr McCloy’s right to challenge the law that excludes developers from making political donations, I place more importance on the right of the public to have confidence in the integrity of the system,” he said.

 

All but one of the seven High Court justices ruled that Mr McCloy and his companies pick up the legal bill. Mr McCloy’s own costs are estimated at close to $1 million, while those incurred by the State of NSW are estimated to be about the same.

 

Mr McCloy confirmed that his Supreme Court challenge against the ICAC conduct of Operation Spicer, and in particular the alleged bias of Commissioner Megan Latham, would proceed.

 

It is listed for hearing in mid November.

 ICAC’s Operation Spicer revealed that developer Jeff McCloy made cash donations to the campaigns of three state Liberal candidates, and to two Liberal party campaign managers. NSW laws prevent developers from making political donations to state candidates.

 

McCloy launched a High Court challenge to the state ban on developer donations, and to the cap on donation amounts which are entirely legal at local government and federal elections.

 

The McCloy challenge was among several which have prevented the ICAC from releasing its Operation Spicer findings because, if it was successful, ICAC would have to abandon any findings against McCloy and the likes of Tim Owen, Andrew Cornwell and Garry Edwards.

 

The High Court has now dismissed the McCloy challenge, upholding the state’s current political donations laws.

 

ICAC’s final Operation Spicer report is now a step closer to public release, but among its remaining hurdles is a Supreme Court challenge from McCloy.

 

McCloy’s Supreme Court claim questions the impartiality of the ICAC and the alleged bias of its commissioner Megan Latham. It is set down for a November hearing.

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