Barilaro created “fund” Perrottet used to make illegal grant

The fund Dominic Perrottet used to make an illegal and fast-tracked $5.5 million grant to a regional gun club — at the request of Stuart Ayres — was set up by John Barilaro.

The $5.5m grant to the Australian Clay Target Association at Wagga Wagga NSW is at the heart of the NSW Independent Commission Against Corruption’s Operation Keppel.

As previously revealed, it was NSW Premier Perrottet, as NSW Treasurer, who approved the grant, in August 2017.

It can now be revealed the “fund” that grant came from — the $300m “Regional Growth – Tourism and Environment Fund” — was created by former NSW Deputy Premier Barilaro.

Previously unreported ICAC filings — and since deleted NSW Government documents — show Barilaro, as NSW Regional Minister, was the chief minister responsible for the fund.

Barilaro had been pushing for the fund to be created for over a year, since at least December 2015, before it was approved, on February 28, 2017.

ICAC filings show the fund was approved by Perrottet – in one of his first jobs as NSW Treasurer.

That means Perrottet, as NSW Treasurer, both approved the $5.5m gun club grant at the heart of ICAC’s Operation Keppel, and approved the creation of the $300m fund it came from.

Barilaro resigned as NSW Deputy Premier on October 4 last year citing vague personal reasons.

That was three days after Gladys Berejiklian resigned as NSW Premier.

Barilaro declined to answer when asked by media whether his resignation was linked to ICAC’s Operation Keppel.

Today’s revelations mean that aside from Berejiklian, the three MPs closest to the gun club grant were Perrottet, Barilaro and Ayres.

The same three men are also at the heart of the current Barilaro New York job scandal, which last week saw Ayres “resign” as NSW Trade Minister and deputy NSW Liberal leader, although he remains in parliament.

Barilaro is today facing a NSW Upper House inquiry into the scandal.

In June it was announced Barilaro had been appointed to a plum, $500,000 a year NSW Government trade commissioner role in New York.

Perrottet has been under pressure since the scandal broke six weeks ago and on Tuesday last week announced Ayres’ resignation, saying a draft of an independent report showed the Barilaro appointment was not at “arm’s length”.

The Klaxon’s expose. Source: The Klaxon

The report, by former public service commissioner Graeme Head, raised concerns Ayres had broken the ministerial code of conduct, with investigations ongoing.

He denies any wrongdoing.

Along with the Barilaro New York scandal, Ayres is also central to the $5.5m gun club grant scandal because he officially sought the approval of the gun club grant, as NSW Sports Minister, in December 2016.

Under Operation Keppel, ICAC is investigating the gun club grant, and another involving the Riverina Conservatorium of Music, also in Wagga Wagga.

Both grants were heavily advocated by since disgraced former long-time Wagga Wagga MP Daryl Maguire.

In 2020 it emerged that, from at least 2015 to 2020, Maguire and Berejiklian had been in a secret romantic relationship.

Barilaro’s Fund

Much of the NSW Government material regarding Barilaro’s involvement in the “Regional Growth – Tourism and Environment Fund” has been deleted from the internet.

The Klaxon has obtained copies of numerous documents through web archive, Wayback Machine.

Barilaro announced the $300m fund in a 12-page “expressions of interest” document (archived copy here).

“I am pleased to be able to announce that the investment in regional NSW to drive growth and job creation is continuing,” Barilaro says.

“The Regional Growth – Environment and Tourism Fund will see $300 million in government funding, combined with further private sector investment, deployed to protect and enhance our precious environmental assets and build the new tourism attractions that will entice more visitors to regional NSW”.

Barilaro announces his new fund in March 2017. The 12-page document has since been deleted from the internet. Source: NSW Government/Wayback Machine

Barilaro was the key minister responsible for the fund.

The other two responsible ministers were Tourism Minister Adam Marshall and Environment Minister Gabrielle Upton.

Documents filed with ICAC show Barilaro had been formally pushing for the creation of the “Regional Growth – Environment and Tourism Fund” since December 2015.

It wasn’t until February 2017 — just weeks after Perrottet was appointed NSW Treasurer — that the fund was approved.

A formal statement Barilaro has filed with ICAC, along with supporting documents, shows that on December 18, 2015, he wrote to “the then Minsters for Tourism, Environment, Primary Industries, Lands and Water”, seeking to “establish an interagency working group” regarding his proposed fund.

In April 2016 he prepared a submission for the NSW Expenditure Review Committee to “seek approval for the purpose of the $300 million Regional Growth – Environment and Tourism Fund”.

(The Expenditure Review Committee meets several times a year to approve or reject significant expenditure items and is overseen by the NSW Treasurer of the day.)

The Expenditure Review Committee (ERC) met two months later, on June 2, 2016, and Barilaro was told it still needed “guidelines to be developed”, “prior to the ERC considering and approving the guidelines”.

By December the ERC had still not “considered” or approved the guidelines of Barilaro’s proposed fund.

On December 14, 2016, the ERC met again.

This is the ERC meeting that has been a key focus of ICAC’s public hearings.

At the meeting, chaired by Berejiklian as NSW Treasurer, Barilaro’s proposed fund was not approved.

Although it was mentioned.

Stuart Ayres, as NSW Sports Minister had taken the $5.5m gun club grant proposal to the ERC meeting.

Berejiklian, as Treasurer, had allowed it on the agenda.

At the meeting, at which Barilaro was also present, the gun club grant was given “conditional approval” and it was decided the money would come from Barilaro’s proposed fund.

This was unusual because Barilaro’s fund had not yet been approved or created.

Things moved quickly from here.

The following month Berejiklian was appointed NSW Premier and she appointed Perrottet NSW Treasurer.

Weeks later, on February 28, 2017, the first “Expenditure Review Committee” under the new regime was held.

It was overseen by Perrottet as NSW Treasurer.

At that meeting Barilaro’s “Regional Growth – Environment and Tourism Fund” was approved.

The ICAC has heard the Treasurer directs what projects are approved or rejected by the ERC.

Just two week later, on March 6, the fund was announced to the public and opened to “expressions of interest”.

In August 2017 the $5.5m gun club grant was approved through Barilaro’s new fund by Perrottet, as NSW Treasurer.

It was the first grant approved through the fund – and by almost a year. (The other grants made in the $100m “round one” stage of the Regional Growth – Environment and Tourism Fund were not “contracted” by government until mid-2018).

The progression of Barilaro’s $300m fund through the NSW Government follows a similar timeline to the progression of the gun club grant, pushed by Maguire, and later Ayres.

Timeline:

Dec 2015 – Barilaro writes to MPs about his proposed new fund

Jan 2016 – Maguire writes to Ayres seeking gun club grant

Apr-Jun 2016 – Barilaro applies to ERC for proposed new fund

Jul 2016 – Ayres visits Wagga Wagga gun club with Maguire

Dec 2016 – Ayres takes gun club grant proposal to Berejiklian’s ERC

Jan 2017 – Berejiklian becomes NSW Premier and Perrottet becomes Treasurer

Feb 2017 – Perrottet’s ERC approves Barilaro’s $300m RGTEF fund

Aug 2017 – Perrottet approves $5.5m gun club grant from Barilaro’s new fund

Barilaro and Ayres have both told the ICAC they were unaware of the relationship between Berejiklian and Maguire at the time the fund club grant was made.

(Perrottet has not been publicly examined by the ICAC in the ongoing Operation Keppel.)

In January 2016, weeks after Barilaro sought to create an “interagency working group” for his proposed new fund, Maguire wrote to Berejiklian and Ayres, as NSW Sports Minister, seeking the gun club grant.

This was rejected by Ayres. (Maguire had been pushing for a grant since at least 2010 but had been repeatedly rejected).

Yet six months later, in July 2016, Ayres visited the gun club with Maguire and met with club officials.

Then in December 2016, Ayres took the gun club proposal to Berejiklian’s ERC, where it received the “conditional approval”.

Restart

As revealed last month – and on top of the issues raised publicly at ICAC hearings – the $5.5m gun club grant was illegal from the outset.

Barilaro’s “Regional Growth-Tourism and Environment Fund” was drawn from the multi-billion Restart NSW Fund.

The Restart NSW Fund was created in 2011 to house the proceeds of state infrastructure sales, with that money to be “recycled” to be used for new infrastructure projects.

More than $30 billion has been put into the fund, mostly from the sale of the state’s “poles and wires” electricity infrastructure.

Dozens of smaller sub-sets, or “funding programs”, have been created which use Restart NSW Fund money.

They include the “Fixing Country Roads”, “Bridges for the Bush” and “Future Focused Schools” programs.

Barilaro’s “Regional Growth-Tourism and Environment Fund” was one of these.

The ACTA gun club grant: sourced from the Restart NSW Fund.

The source of the gun club grant highlights the number of different “funding programs” that have spurned from the Restart NSW Fund.

The $5.5m came from Barilaro’s “Regional Growth – Environment and Tourism Fund”, which was one of the subsets of the “Regional Growth Fund”.

The money ultimately comes from the Restart NSW Fund,.

The Restart NSW Fund is governed by the Restart NSW Fund Act 2011.

The Act is just five pages long and it expressly stipulates the types of infrastructure projects that Restart NSW Fund money can legally be used for.

Purposes for which Restart NSW Fund money can be legally used. Source: Restart NSW Fund Act

They include transport and roads infrastructure, health and public services infrastructure, infrastructure in areas “affected by mining operations” and infrastructure “required for the economic competitiveness of the State”.

The Australian Clay Targets Association’s “large clubhouse/ conference facility” development on the outskirts of Wagga Wagga NSW meets none of them.

Perrottet has not denied the $5.5m grant was illegal.

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

(As previously revealed, the grant escaped the scrutiny of the NSW Auditor-General because it was not “sampled” as part of its 2017-18 audit).

Instead, he pointed us to Infrastructure NSW.

That’s despite the Restart NSW Fund Act clearly stating that while Infrastructure NSW makes “recommendations” to the NSW Treasurer – including on whether projects are likely to deliver a net benefit to taxpayers – it is the Treasurer who is responsible for approving or rejecting grants.

In any event, the “conditional approval” given to the gun club grant by the ERC in December 2016 specifically notes the Treasurer’s involvement – on top of the requirements of the Act.

There were four conditions and condition four was: “The finalisation of a satisfactory business case, noting this could be approved by the Treasurer following Infrastructure NSW assurance processes”.

In the since deleted “expressions of interest” document for Barilaro’s $300m new fund he states:

“I am looking forward to receiving visionary and innovative proposals from communities and businesses across NSW”.