Source: Newcastle Herald
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CHARLESTOWN MP Andrew Cornwell used $10,000 that Hilton Grugeon gave his wife for a painting to pay his tax bill, despite suspecting the prominent Hunter developer was attempting to ‘‘curry favour’’ or bribe him, a corruption inquiry has heard.
Mr Cornwell also admitted on Thursday at the Independent Commission Against Corruption that he accepted a $10,000 wad of bills from property developer Jeff McCloy – but declared it was all a ‘‘huge mistake’’.
The Cardiff vet, who stepped aside from the Liberal Party and quit his position as government whip on Wednesday, told the inquiry he had always felt ‘‘uneasy’’ about taking the money from both men during the 2011 state election campaign.
He sought at the time to deal with their money in accordance with the law when he should have considered if accepting the money was ‘‘appropriate’’, he said.
However, Mr McCloy’s money ended up being spent on his campaign, in breach of electoral funding laws that ban developers from donating.
Mr Cornwell, who has been described as ‘‘co-operating with the inquiry’’, told how he was in surgery at his Cardiff vet practice in October 2010 – a date fixed in his mind and records because of the specialist surgery he had performed on a dog.
While he was still in theatre, Mr McCloy called to ask where he was – which phone records obtained by the inquiry confirm.
Mr McCloy arrived outside the surgery and signalled Mr Cornwell to hop in the passenger side. The now lord mayor of Newcastle then handed Mr Cornwell a sealed envelope with the words: ‘‘I should be giving this to the Salvation Army’’, the ICAC was told.
Mr Cornwell said he was ‘‘stunned’’ and ‘‘froze’’, taking what he knew must be cash in the envelope and returning to his surgery to complete the operation.
‘‘I was now in the receipt of something that I shouldn’t have had,’’ he told the Sydney hearing.
He kept the money at home in a bedroom cupboard for about a week before handing it to the president of the Charlestown Liberal Party branch, Bob Beaven, also his official campaign agent, because ‘‘I just didn’t want to have it in my possession any more.
‘‘Candidates really shouldn’t be handling any donation, let alone a prohibited donation.’’
Mr Cornwell said he informed Mr Beaven the money was from Mr McCloy and asked him to deal with it.
Mr Beaven banked the money and it ended up being spent by Mr Cornwell’s campaign to buy into a targeted seats campaign package from the party’s head office to boost his electoral chances.
Asked why he didn’t go to police or return the money when he knew Mr McCloy was banned as a developer from donating, Mr Cornwell said: ‘‘It was just a huge mistake, I just froze.’’
Mr McCloy is also alleged to have later rung Mr Cornwell offering him a tab account at a printing service for his campaign to use.
‘‘I said that it would be a third party payment and he’s a prohibited donor and ... it’s just not possible [to accept it],’’ Mr Cornwell said.
Mr Cornwell also told how he and his wife had regifted a landscape painting they owned and stored in their garage to Mr Grugeon, a prominent developer, for Christmas in 2010.
Mr Grugeon called him and insisted on paying Samantha Brookes (Mrs Cornwell) for the painting. Mrs Cornwell issued an invoice to Mr Grugeon who sent a cheque for $10,120 – far in excess of its value.
‘‘You must have smelt a rat,’’ counsel assisting the inquiry Geoffrey Watson SC said.
‘‘I did,’’ Mr Cornwell said.
He said he always felt ‘‘uneasy’’ about the money, and had sought advice from his lawyer parents, who assured him it was legal to accept it.
Mr Watson put to Mr Cornwell that Mr Grugeon had attempted to bribe him and the invoice was a ‘‘sham’’.
‘‘It was definitely an effort to try and curry favour,’’ he replied.
However, he used the money to pay his tax, answering ‘‘clearly yes’’ that he had received a financial benefit.
Mr Cornwell said Mr Grugeon had told him he later donated the Rex Newell painting to charity.
He also told of ‘‘fairly funky’’ fund-raising proposals put to him by Newcastle Liberal campaign manager Hugh Thomson, including channelling donations through a Sydney trust fund and the use of a sham housing deposit.
Mr Thomson had rung him to say, ‘‘I’ve got these guys who might be able to help you out.’’ The idea was the ‘‘guys’’ would agree to buy Mr Cornwell’s house and he would accept a non-refundable deposit.
The deal would then fall through and he would be able to keep the money and use it for his campaign.
Mr Cornwell said he told Mr Thomson, a lawyer, it was the most ‘‘harebrained’’ idea he’d ever heard.
He also told the inquiry it was common to see property developers at some of Newcastle MP Tim Owen’s fund-raisers.
This included his campaign launch, Mr Cornwell said. He also said senior Hunter Liberal and MLC Mike Gallacher, who recently was forced to resign as police minister, had once advised him he could ‘‘technically’’ sell some raffle tickets to Mr Grugeon.
In his evidence, Mr Beaven said Mr Cornwell told him when he gave him the $10,000 cash that Mr McCloy was a builder or developer but wanted to remain anonymous.
Mr Beaven said he could understand the request as ‘‘Newcastle is a Labor town’’ and to publicly support the Liberal Party would attract attacks.
Mr Cornwell’s wife, Samantha Brookes, also gave evidence and said she and her husband were functioning on five or six hours sleep at the time and she could not recall if she told him she was contacted by Mr Grugeon’s office about providing her with the money for the painting.
She said she treated the invoice as an administrative task her husband must have already known about.
When she presented the cheque to Mr Cornwell he was ‘‘extremely shocked’’.
‘‘I regret that I didn’t stand back and put this transaction into perspective,’’ she said.
The inquiry is continuing.
Geoffrey Watson, SC, counsel assisting the inquiry: ‘‘You should never, ever, ever have accepted that money.’’
Charlestown MP Andrew Cornwell: ‘‘That’s absolutely correct.’’
Watson: ‘‘Mr Grugeon offering you this and offering you far too much for the picture, plainly it was some effort by him to try to bribe you, don’t you agree?’’
Cornwell: ‘‘Yeah, it was definitely an effort to try to curry favour.’’
ICAC was told Newcastle developer (now lord mayor) Jeff McCloy of Newcastle handed Cornwell an envelope containing $10,000, and said: ‘‘I should be giving this to the Salvation Army.’’
Cornwell: ‘‘I was now in the receipt of something that I shouldn’t have had.’’
Asked why he didn’t go to police or return the money when he knew McCloy was banned from donating, Cornwell said: ‘‘It was just a huge mistake, I just froze’.’’
Cornwell regifted a painting to developer Hilton Grugeon. Cornwell’s wife Samantha Brookes issued an invoice to Grugeon who sent a cheque for $10,120.
Watson: ‘‘You must have smelt a rat.’’
Cornwell: ‘‘I did.’’
mharris@theherald.com.au twitter: @mshell_harris