EXCLUSIVE: Wagga gun club and the “missing” $1m

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EXCLUSIVE

ANTHONY KLAN

The 1000-person Wagga Wagga gun club convention centre development at the heart of corruption inquiries was greenlit by the local council – whose members include the project’s developer – before the NSW Government even awarded the $5.5 million grant to fund it.

It can also be revealed that the Australian Clay Target Association (ACTA) has reported, in different documents, substantially different figures for the “cost” of the project – including $5.5m, $6.7m and $7.34m.

Investigations by The Klaxon suggest that up to $1m of the $7.34m “cost” of the convention centre cited in ACTA’s accounts appears to be unaccounted for.

Some of the costs incurred by ACTA were for “furniture” which was bought from China through a company secretly controlled by since disgraced Wagga Wagga MP Daryl Maguire.

Daryl Maguire at the Wagga Wagga gun club. Source: Supplied

It is not known what ACTA paid to G8way International – or to any suppliers or other parties connected with the project – as ACTA’s financial reports simply record the payments as part of an annual combined figure titled “cash payments in the course of operations”.

Further, ACTA does not appear to have submitted any detailed breakdown of costings with its development application to Wagga Wagga City Council, despite the NSW Department of Planning requiring that projects worth more than $3m provide a “detailed cost report prepared by a registered quantity surveyor”.

ACTA has repeatedly declined to comment when contacted by The Klaxon.

The $5.5m NSW Government grant to ACTA has been a key focus of investigations by the NSW Independent Commission Against Corruption (ICAC), which on Monday finished 11 days of public hearings.

As part of Operation Keppel, ICAC has heard evidence that the gun club development was to cost $6.7m, with ACTA contributing $1.2m on top of the $5.5m government grant.

Yet ACTA’s annual report for the 2018 calendar year, which was when the convention centre was completed, records the ACTA function centre as having cost $7.34m.

ACTA’s 2018 annual report, the year the project was completed, shows the function centre cost $7.3354m, or $7.34m after rounding. Source: ACTA 2018 annual report

The “development cost” ACTA filed on its development application, which was subsequently approved by Wagga Wagga City Council, was $5.5m – the exact size of the grant later awarded by the NSW Government.

The $5.5m grant was awarded to ACTA on August 28, 2017 by then NSW Treasurer, Dominic Perrottet.

Wagga Wagga City Council documents reveal that at that time, ACTA’s project had already been approved for over a month.

ACTA had submitted a development application on April 26, 2017.

On July 11, 2017, Wagga Wagga City Council filed an “assessment report” recommending the convention centre project be approved.

On 26 July, 2017 – a month before the $5.5m funding grant was approved – the Southern Joint Regional Planning Panel held a meeting at Wagga Wagga City Council’s offices and formally approved the project.

The development application had to go to the Regional Planning panel – whose members include two Wagga Wagga councillors – because the project was worth over $5m and a small parcel of the gun club land was owned by the council.

The ACTA development – $1m allegedly unaccounted for. Source: Supplied.

It has been revealed that Maguire, who resigned from NSW Parliament in disgrace in 2018, had been pushing for the grant, on ACTA’s behalf, since at least 2012.

ICAC has heard the $5.5m grant, approved on August 28, 2017, had received special treatment and been made outside normal government protocols.

As revealed by The Klaxon, it was the only one of 92 grants in the Riverina – Murray region that didn’t go to a government entity, and it was granted a year before the NSW Government began “project contracting” the other projects in the round.

That the project had obtained full planning approvals before the grant was even approved raises yet more questions about the $5.5m grant and the circumstances in which it was awarded.

Perrottet became NSW Premier last month after Gladys Berejiklian resigned amid the ICAC scandal.

He declined to provide an on-the-record comment.

Wagga Wagga City Council records show that ACTA, in its development application, recorded the “project value” of the convention centre development at $5.5m – the exact figure of the subsequent NSW Government grant.

That is $1.2m below the $6.7m figure that ACTA has publicly stated as the total cost.

The gun club development application and approval. Source: Wagga Wagga City Council

A Wagga Wagga City Council communications officer said that difference could be attributable to the cost of “fittings and furnishings” and “project management costs”, which were not required to be included in the “project value” figure reported to council.

Yet investigations suggest that after including costs for fittings and furnishings, and project management costs, the total cost of the project would likely still fall significantly below $6.7m.

ACTA’s financial statements suggest that gap is even larger.

The gun club’s 2018 audited financial statements state the “cost” of the function centre was $7.34m.

That’s $1.84m more than the $5.5m “project value” recorded on the development approval for the project.

Adding to the lack of clarity, ACTA has not broken down the actual cost of the convention centre in its accounts, instead simply pooling them as part of an annual figure called “cash payments in the course of operations”.

ACTA’s accounts don’t disclose where the money for the convention centra was spent. Instead it’s combined into an annual figure called “cash payments in the course of operations”. Source: ACTA 2018 annual report

Adding yet further to the murkiness, Wagga Wagga City Council appears to have failed to adhere to government requirements that development applications be accompanied with detailed cost breakdowns, with the level of required disclosure increasing with a project’s value.

The council has provided The Klaxon with documents connected to ACTA’s development application, and the subsequent approval, but has failed to produce any documents which show a breakdown of the costs of the project.

That’s despite the NSW Department of Planning stating that a “detailed cost report prepared by a registered quantity surveyor verifying the cost of the development should be submitted with the DA”, for projects over $3m.

When asked about this apparently missing cost report, Paul O’Brien, manager of development assessment at Wagga Wagga City Council, said the council considered the $5.5m “was an appropriate estimate” of “costs at the time of lodgement”.

“The actual cost to complete a development often varies from the figure used for assessment due to a range of factors including, but not limited to, allowable exclusions and the time between initial preparation of documentation, assessment, approval, project commencement date and project completion date,” O’Brien said.

ICAC has previously heard that Maguire secretly ran a company called G8way International, which had sourced “furniture for the Clay Target Association” from Chinese entities.

ICAC has heard that G8way International had been entitled to a commission on the purchase, which it had shared with a Chinese businessman, Mr Gordon Tse.

Convention centre furniture. Apparently sourced from China for undisclosed sums through a company secretly owned by Maguire. Source: Supplied.

McGuire’s business partner in G8way International, former Wagga Wagga RSL director Philip Elliott, has told ICAC that their company received a commission on the furniture deal, but that was “relatively small” due to an “unexpected cost” involving a shipping container.

Last year it emerged that Maguire and Berejiklian had been in a secret relationship from at least 2015 to August 2020.

Berejiklian announced her voluntary resignation as NSW Premier, and from parliament entirely, after ICAC last month said it had broadened earlier investigations into Maguire to also include her. She has denied any wrongdoing.

As previously revealed by The Klaxon, the ACTA convention centre development contract was awarded to Pascoe Constructions, which is owned and operated by Kerry Pascoe, a current local councillor.

Pascoe has been on Wagga Wagga council since 2004, including eight years as Wagga Wagga mayor.

Council records show that Pascoe’s interest was declared at the planning panel meeting on July 27, 2017, where the project was approved.

Then ACTA President Robert Nugent (left) poses for a photo inside the new convention centre with its developer, long-time Wagga Wagga local councillor, Kerry Pascoe. Source: Supplied

The panel of five, which included two Wagga Wagga councillors, Rod Kendall and Dan Hayes, were “unanimous” in approving the project.

Pascoe has repeatedly declined to comment when contacted by The Klaxon.

The records of the meeting suggest that Pascoe’s building company had been “approved” to undertake the development  – either by ACTA or the NSW Government – before it had made a tender.

“Cr Kerry Pascoe’s building company has been approved through an E.O.I and have subsequently been asked to tender on the project,” the meeting records state.

 The Klaxon has exclusively revealed to date:

–  That the person responsible for approving or rejecting the $5.5m grant was the NSW Treasurer, which at the time was Dominic Perrottet, now NSW Premier

– That Perrottet did personally sign off on the $5.5m grant as NSW Treasurer

– The grant was made almost a year before other grants in category were “contracted”

– The construction contract went to a current Wagga Wagga city councillor

– The gun club claims to have incurred mystery “significant costs” in securing the $5.5m grant that were so big they dinted its 2016 profits.

– NSW MP Stuart Ayres has allegedly given false or misleading evidence to ICAC. His visit to Wagga was a year earlier than one he referenced in ICAC public hearings.

Refund

Property developers are generally required to pay levies, or “contributions”, to local council when undertaking projects, with that money used to fund public infrastructure such as footpaths and roads.

For larger projects, this developer contribution is usually 1 per cent of the development cost.

The development cost ACTA reported to the Wagga Wagga City Council for its convention centre was “$5500000”, or $5.5m.

“The application is for a function centre, associated car parking and landscaping and a new access driveway to Copeland Street,” ACTA’s development application states.

Maguire and Berejiklian before Maguire was forced to resign from NSW Parliament in disgrace in 2018. Source: Supplied

“The development has a value of $5.5 million”.

ACTA paid the council a development contribution of $55,000, which is 1 per cent of $5.5m.

Combined with other charges, including for sewage, the total fees paid by ACTA were $159,178.

A letter from the gun club to council states that ACTA paid the $159,178 on 11 August, 2017, which was two weeks before it obtained the $5.5m government grant.

In the letter, dated September 4, 2017 – one week after ACTA received the $5.5m government grant – ACTA asked council to refund it the $159,178.

“The council’s support of a refund of the fees as a contribution to the development would be greatly appreciated and received by the ACTA,” wrote then ACTA Executive Officer Tony Turner.

That was rejected by council.

“Their request did not entirely align with the Council’s Policy, particularly in relation to the site not being Council owned, and that the public were going to be charged fees for use of the facility,” council documents state.

“It was outlined that the Officer’s recommendation to Council would not support ACTA’s request, however ACTA have indicated that they wished to proceed to Council in any case, hence this report is now presented.”

The Klaxon’s expose last week. Source: The Klaxon

Mr Tse

Maguire had been the NSW MP for Wagga Wagga for 19 years until he was forced to resign in disgrace after an earlier ICAC investigation, Operation Dasha.

The investigation, into the then Canterbury council, heard Maguire had been involved in a string of secret business deals behind-the-scenes while MP.

In one case, Maguire was found to have secretly sought payments from major Chinese developer Country Garden in exchange for brokering property sales.

ICAC also heard Maguire had run an illegal “cash for visas” scam for Chinese nationals.

Maguire and Elliott had run the cash-for-visa scam through G8way International.

Elliott told ICAC last year that he had been the sole director and shareholder of G8way International to conceal Maguire’s control of the company.

In reference to Maguire, the company’s website had said: “G8way International’s influence and expertise reaches to high levels of government”.

Elliott told ICAC last year that one of the projects G8way International had been involved in was purchasing “furniture” for ACTA.

Elliott told ICAC he had travelled to China with some ACTA officials to buy the furniture.

He said G8way International had been entitled to a commission on the purchase – shared with a Chinese businessman “Mr Gordon Tse”.

Elliott said the commission G8way International received was “relatively small” because “the purchase required an additional container” which G8way had been required to purchase, not lease or rent, which had eaten into the commission to be received.

Project approved on Jul 26, 2017. “Capital investment value” reported as $5.5m. Source: Supplied

Project Management 

According to construction experts, the “project management” fee for a development of $5.5m would be about 4-5per cent of its cost.

At 5 per cent, the project management fee would be about $275,000.

At a relatively high estimated price of $150 a chair, and $300 a table, the cost of the gun club furniture would only be around $200,000.

Combining those estimates with the $159,178 in development fees and levies paid takes the $5.5m “development cost” to about $6.34m.

That’s about $360,000 below the $6.7m ACTA has publicly stated the project would cost.

And it’s $1m below the $7.34m cost of the project recorded in ACTA’s audited financial statements.

Along with the $5.5m “project value” listed on council documents is the “capital investment value” of the project.

The “capital investment value” is also listed as exactly $5.5m.

That’s despite the two figures being calculated slightly differently, according to the law.

For example, the capital investment value, which is stated as $5.5m, includes project development costs.

More to come…