NSW Labor: Could it possibly get any worse?


After years of scandal and corruption dogging the infamous "whatever it takes" ALP NSW party machine, the election of fresh-faced Kaila Murnain to the top job was supposed to be a new broom.

Aged just 29, and the first female general secretary in the party's history, the appointment of the "Boss Lady" of "Fortress NSW", or ALP headquarters, in early 2016 was going to lead the party "out of the mire".

Kaila Murnain leaves The NSW Independent Commission Against Corruption (ICAC) public inquiry into allegations concerning political donations in Sydney. Picture: Joel Carrett
Kaila Murnain leaves The NSW Independent Commission Against Corruption (ICAC) public inquiry into allegations concerning political donations in Sydney. Picture: Joel Carrett

Her elevation to the traditional back room power broking job was greeted with hyperbolic headlines such as: "New Labor chief is on fire!"

Her gender also raised expectations about female empowerment, with "Go Get 'em Girl" type messages shared by the Labor family. Murnain became heavily involved in "affirmative action" programs and the NSW Labor Women's Forum.

And despite two major election campaign defeats this year, she was still being pumped up as "Australia's Jacinda Ardern", a future PM, as recently as May.

But as the extraordinary ICAC hearings this week show, behind the House of Cards edifice of the beaming "modern" face of progressive Labor, not much seems to have changed at all.


A full five days of extraordinary revelations has laid bare the dysfunction of Sussex Street headquarters, aptly described as a "shit show" and "smoking mess" by former party chief Sam Dastyari.

The corruption probe has put the spotlight on personal acrimony spilling over into the professional realm.

From bitter fighting between Murnain and her predecessor Jamie Clements - they "hated each other" - as well as Murnain's falling out with mentor Dastyari - bringing her to tears in the witness box - there was even more evidence that male union bosses shunned her.

Then there's the jaw-dropping impropriety allegations about "straw donor" rackets, plastic Aldi bags stuffed with $100,000 cash, a witness suicide, Chinese dinners with foreign interference allegations and farcical spy novel style WhatsApp meetings behind state parliament.

At the heart of Operation Aero, ICAC's corruption investigation, was a 12 March, 2015 Chinese Friends of Labor dinner at the Haymarket's Eight Restaurant for 600 people.

The star attractions for the Chinese community were to be meeting ALP federal leader Bill Shorten, state leader Luke Foley and Upper House MP Ernest Wong, along with several other Labor MPs.

Ernest Wong (centre) leaves the ICAC in Sydney. Picture: Liam Driver
Ernest Wong (centre) leaves the ICAC in Sydney. Picture: Liam Driver

Seated at the top table was the "fabulously wealthy" property developer, Chinese billionaire Huang Xiangmo and four of his guests.

Late last year Huang was barred by ASIO from returning to Australia. During 2015 and 2016 MPs and party leaders had been given confidential security briefings that his close ties to the Chinese Communist Party meant his donations were a vehicle to push Beijing's aims.

At the time he was a "prolific" donor to both the federal arms of the Labor and Liberal Parties, as well as various universities.

But under NSW laws, as a property developer, he was banned from donating to state political parties.

Stunning evidence tendered to ICAC yesterday of emails and spreadsheets show Wong allegedly sold the head table to Huang for $100,000.

A few weeks after the dinner, Huang allegedly popped into the nearby Sussex Street ALP headquarters and gave then ALP boss Jamie Clements $100,000 in cash in a supermarket bag, consisting of $100 notes loosely held together by plastic bands.


ICAC heard Labor HQ often took cash donations in plastic bags at the time - and had no adequate safeguarding systems, so staffer Kenrick Cheah says he carried the money home. He alleged Murnain - then still an assistant secretary - bid him to "keep safe" on his journey.

Murnain said she did not authorise him to take it home, did not recall any Aldi bag of money, did not remember saying to "be careful" and had not sighted Huang at Labor HQ.

She also said she had inherited a "lack of accountability" and procedures when she took over the top job after Clements resigned over a sex scandal, so she instituted a number of reforms, including banning cash donations over $1000.

ICAC investigators were told ALP accounts clerk Jenny Zhao banked the money on 9 April that year - but she has since told investigators she doesn't remember the transaction at all.

The ALP reported to the NSW Electoral Commission that the money came from a dozen individuals paying in amounts of $5000, with some paying another $5000 to the Country Labor Party.

Cartoon by Warren Brown
Cartoon by Warren Brown

But ICAC documents show many of the supposed donors were low-paid waiters, and family and friends of those involved in Chinese Friends of Labor.

One of the "straw donors", Steve Tong, testified he was very angry to find out later his name had been used and says he had no idea what Country Labor was.

In response to sustained questions in the witness box over why she signed off on a misleading form in December 2016 to the NSW Electoral Commission, Murnain said she had delegated an internal investigation to a governance officer.

Then the "Boss Lady", who has been involved in the ALP since the age of 15, added: "As people can understand, this a seven-day-a-week, almost 24-hour-a-day job.

"There's always one drama, that you move from one to the next, and issues and problems, and for the first time probably in a decade I've had time off in the last few weeks (for her wedding) and been forced to recall events that happened in 2016 and 2015, which frankly weren't things I was thinking about even at the points at which this investigation had been made public."


Colourful former ALP senator Sam Dastyari, whose federal career ended over his relationship with Huang, also gave an insight into what was going on behind closed doors of the ALP.

They first met when Murnain was about 15, or 16, at a Young Country Labor conference, he told investigators, and became close friends.

He went on to head the party machine, and became a senator, and was a mentor for her and MC'd at her wedding.

A day wouldn't go by "when I wouldn't speak to her four times", he said. But they fell out this year when he suggested she should step down from the top job after Labor's humiliating losses.

Sam Dastyari arrives at the ICAC hearing in Sydney on a hired pushbike. Picture John Grainger
Sam Dastyari arrives at the ICAC hearing in Sydney on a hired pushbike. Picture John Grainger

"There was a lot of gender issues that Kaila had to confront, being the first female secretary," he said. "There was a lot of instances where, you know, dominant male trade union secretaries didn't give her the respect she deserved for her position, and a lot of that led to private frustration.

"I was a personal, private vehicle where she could vent that stuff to, because she can't sometimes call powerful male figures in the Labor Party.

"Usually this level of distress was only related to when she felt that she was being treated differently as a woman."

She confided in him that she felt "everyone had abandoned her and she'd been left alone in the Labor Party office and we all moved on to our other careers and she was there to clean up the pieces".

Under forensic questioning in the ICAC witness box she agreed she was "wrong" in keeping quiet when she heard from MP Ernest Wong about the illegal $100,000 cash donation and looking back says she would have done things differently.

Within hours of her appearance, she had lost her job and any hope of a political career.

Some Labor figures believe she was too young and lacking in life experience for such a huge job, while others suggest elder party apparatchiks deliberately installed her, believing they could retain control.

Regardless, if the ALP is to have any chance of future electoral success in NSW, it will be needing to replace its old straw broom with an industrial strength vacuum cleaner.