Federal Assistant Treasurer Arthur Sinodinos was employed by a water company at the centre of a corruption scandal because of his political connections, the firm’s former chairman has said.
Senator Sinodinos is under intense scrutiny after he was identified as a key witness before NSW’s Independent Commission Against Corruption (ICAC) in its ongoing Operation Credo inquiry.
The ICAC is examining Australian Water Holdings (AWH), which attempted to secure a multi-million dollar deal with the then NSW Labor government to provide water infrastructure in Sydney’s northwest.
The value of AWH, which was allegedly part-owned by the family of disgraced former Labor powerbroker Eddie Obeid, would have soared $200 million if the deal went through.
Senator Sinodinos, who was employed in 2008 as AWH’s director and deputy chairman, stood to receive a $20 million bonus, while other shareholders would have secured huge cash windfalls.
The senator’s alleged remit was to open doors to senior Liberal identities once it became clear the party was going to win the 2011 NSW election.
The inquiry has heard he was paid $200,000 for about 100 hours of work per year and was employed in the senior role despite having no previous experience in the water infrastructure sector.
“He was brought in because of his profile and to help us with direct negotiations with major financial organisations,” former AWH executive chairman John Rippon told the ICAC on Tuesday.
“What about his political connections?” asked counsel assisting the inquiry Geoffrey Watson.
“That too,” replied Mr Rippon.
Senator Sinodinos, who was appointed to the Senate in 2011, was finance director of the NSW Liberal Party when he was employed by AWH.
He has denied any wrongdoing.
On Tuesday he received the backing of Prime Minister Tony Abbott who told parliament the former chief of staff to John Howard had served the country “long and faithfully”.
Labor grilled Senator Sinodinos about the ICAC inquiry in the Senate on Tuesday.
“Watch this space, I will be vindicated in terms of what I’ve said to the Senate,” he said, referring to his earlier professions of innocence.
The ICAC heard on Tuesday that Mr Obeid’s family took a 30 per cent stake in AWH but wanted the arrangement kept quiet.
After buying the stake, it’s alleged Mr Obeid lobbied fellow Labor NSW ministers to approve the business deal between the state government and AWH.
The deal, if approved would have sent AWH’s value soaring from about $47 million to $246 million over six years.
The then Labor Minister Joe Tripodi is alleged to have doctored a cabinet minute to try and have AWH’s proposal approved.
Another former Labor minister, Tony Kelly, and his chief of staff are alleged to have also altered or at least approved the cabinet minute.
Ultimately the deal was knocked back by the NSW government.
AWH has since secured a contract with the current Liberal state government.
Mr Watson on Monday described that deal as entirely “fair” and above board.
The inquiry continues.