The Rolling of NSW Labor
The NSW Labor Party has become a crime scene. Sussex Street has been cordoned off and forensic scientists sent in to gather evidence. On the other side of the thick yellow tape, a crowd of confused ALP branch members has gathered in search of answers.
Some things are clear. Whether or not formal charges are brought against Ian Macdonald and Eddie Obeid following the Independent Commission Against Corruption hearings, the crime against Labor’s reputation has been horrific. Two senior party figures, numbers men from the Left and Right factions respectively, are being investigated over the issuing of lucrative mining leases – Labor government decisions that, according to counsel assisting ICAC, involve the worst level of impropriety in the history of the NSW parliament.
Not since the 1963 election, when controversy about the government funding of Catholic schools flared up in NSW, have state issues been so dominant in national politics. As old Jack Lang used to say, where NSW goes, so goes the rest of the country.
On the evidence before ICAC, wrongdoing has occurred, either in the form of influence-peddling or maladministration – quite possibly both. But who allowed Macdonald and Obeid to advance through Labor’s ranks into the cabinet room of state governments? Who gave them factional support and encouragement to do their worst in positions of power? Who stood by and allowed a culture of preferment and self-interest to flourish at the highest levels of the NSW branch? These are the matters puzzling the Sussex Street crowd.
Publicly, at least, nobody has been willing to defend Obeid. His actions are seen as a logical extension of the wheeling and dealing culture of the NSW Labor Right. This was a style popularised by Graham Richardson, the state party general secretary from 1976 to 1983, then senator and factional numbers man in Canberra from 1983 to 1994. In recent times Richardson has resurrected himself as an omni-present media commentator, trading on his reputation as a “political insider”.
For Labor’s sake, one small fringe benefit might have been expected to flow from the ICAC inquiry: we would no longer have to listen to Richardson’s repetitive critique of Julia Gillard’s judgement. After all, Richardson’s own judgement was such that he recruited Obeid to the NSW Legislative Council. For a public figure, it is rare for a mistake committed two decades ago to bring down a federal government. But that’s Graham Richardson for you. His famous ethos of “whatever it takes” positions public life not as a contest between right and wrong, but as an exercise in short-term opportunism.
This was a message Paul Keating conveyed to me in 1986. It was in the Sydney Town Hall at the NSW party’s annual conference, where I, as a 25-year-old greenhorn, had just spoken in favour of federal Labor’s economic reform program. Within the ALP at that time, advocating free trade and market deregulation, as I did, meant being howled down by the Left, as I was.
In recognition of my efforts, Keating’s offsider in Bankstown, Peter Sams, introduced me to the great man. As we spoke, Richardson was at the conference microphone. Subtly pointing in the senator’s direction, Keating’s advice was to “avoid being a clown like some people in politics and make sure you stick to the big policy issues”. I tried to follow this instruction, admittedly with limited success, during my time in parliament. Nonetheless, I remain proud of one achievement. I was never part of the Richardson culture within the NSW Right.
In understanding Obeid’s advancement through the party, the Keating distinction is vital. Not all members of the NSW Right in the 1990s were wheelers and dealers. The faction had a strong core of members interested in public policy – people like Bob Carr, Michael Easson, Stephen Loosley, John Della Bosca and, of course, Keating. Unfortunately, this was a minority grouping.
The dominant tendency was Richardson’s. As his legend grew, both in the media and inside the ALP, his style became an operational template for the next generation of apparatchiks – most notably, Eric Roozendaal, Mark Arbib and Karl Bitar, the NSW general secretaries from 1999 to 2008. During this period, Obeid’s influence as a numbers man in state parliament continued to blossom.
When I was active in politics, I never had much of a handle on the wheelers and dealers. They were different to me; I didn’t like them, so I did my best to avoid them. But having retired from parliament and reflected on the period, I now understand the Richardson and Obeid culture was driven by three forces.
The first was the debilitating impact of the NSW Right fighting the Left for administrative control of the party. The notional Labor values of equality and social justice were marginalised, in favour of the Right faction’s daily routine: the hard-ball politics of smashing its opponents. This power struggle instilled a dual culture: when the numbers favoured the Right, the ruthlessness of using them; when the numbers were not clear-cut, the necessity of factional compromise. In this environment, number-crunching and deal-making became a way of life.
The second factor was laid bare in Richardson’s 1994 memoir, Whatever It Takes. In a moment of candour, looking back on his early years as a right-wing organiser, he wrote:
Meeting the right people in the Labor Party was not part of a brilliant strategy, [rather] I wanted to meet them because everything they did fascinated me ... And while most people who attain positions of power may be reluctant to say so in these terms, the prospect of people deferring to me one day – in the way they were deferring to the “right people” I was beginning to meet – was pretty attractive.
This is not how policy-oriented people look at politics. They see a public problem and try to apply a public policy solution.
For Richardson and his acolytes, however, the party machine offered special rewards, in the form of career and social status. It allowed them to stand over their underlings, with a feudal attachment to pecking orders and the politics of intimidation.
The third factor relates to time management. For activists who join a party but have little interest in policy research and argument, an obvious question arises: how do they occupy their time once they have achieved paid professional positions as party administrators or members of parliament? One ready way of filling up an empty day is through mischief: working the numbers, roughing up enemies and making new alliances. This is the stock-in-trade of the apparatchik.
In the Richardson style, internal party mischief was synonymous with the politics of self-promotion. To keep his underlings in line, a factional chief constantly needs to prove he is the smartest operator in the room. For the sub-ordinates, it’s the permanent, unspoken fear of knowing that if they betray or even disobey their boss, he will destroy them politically. Thus factional warlords are constantly hoping to pull off outrageous ploys and stitch together unexpected deals. They need notoriety to cultivate deference.
Importantly, this trait was not confined to the ruling Right faction. A sub-faction of the Left, led by the hustling NSW frontbencher Frank Walker, also adopted these methods. Its members were known as the Hard Left. Among their number was the Walker staffer-cum-MLC, Ian Macdonald. During the 1988 NSW election, for instance, the Hard Left specialised in running fake independent candidates who siphoned preferences to Labor – a daring scam. In some seats, as many as six of these bodgie campaigns were orchestrated, pulling off unexpected victories in tough electorates.
Richardson’s cultivation of Obeid displayed the core elements of machine politics. When they first met in the late 1970s, Obeid owned the largest Arabic newspaper in Australia, El Telegraph. He was an ideal political associate for Richardson: he tapped into a new source of party donations while also encouraging Lebanese Christians to join the ALP and help with local preselections. When a Labor upper house vacancy arose after the 1991 NSW election, Richardson used his dominant position within the faction to secure the seat for Obeid, at the expense of the party’s longest-serving speechwriter, Graham Freudenberg.
For many apparatchiks, Labor politics is a circuitous path to serving the ruling class. As Richardson, Arbib and Bitar have left politics to take up highly paid positions with the Packer organisation, a pattern has emerged: leaders of the NSW Right leaving Labor behind and living off the human brutality of gaming revenue. If you’re seeking status in life, there is only so much the ALP can do for you. The real money and power lie elsewhere.
If the NSW Right is to have a future, the ICAC inquiry must be used to kill off the remnants of the Richardson legacy. The faction must return to its policy origins, abandoning rancid machine politics. The jig is up. The public has seen how wheeling and dealing can pervert the Labor movement’s purpose. The faction’s next generation of leaders now has the perfect model to follow: building an anti-‘Richo’ Right.
The Left faction faces a different challenge. Over the past decade, the influence of the Walker Left has faded. New leaders like Anthony Albanese have emerged with a stronger interest in public policy. This is not to suggest, however, that another Macdonald will never push through the ranks of the NSW Left. As long as senior figures such as Senator Doug Cameron, the former AMWU secretary, continue to argue for so-called industry policy, the risk of impropriety is real.
Whatever else might be said about economic rationalism, it doesn’t lend itself readily to government corruption. Financial decision-making is left to market forces, keeping politicians and rent-seekers at arm’s length. Indeed, whenever governments in Australia have adopted a free-market outlook, they have been comparatively trouble-free. Historically, scandals have been associated with interventionism, most notably with the “White Shoe Brigade” of developers in Queensland under the corrupt National Party premier, Joh Bjelke-Petersen, and “WA Inc” under Labor’s Brian Burke in the 1980s.
Industry policy encourages politicians to believe they can pick winners, by allocating subsidies and protection to selected companies. Once governments start meddling in the investment decisions of the market, they are only one step away from ministers picking winners to suit their own financial interests and associates. Macdonald lived for decades within this policy culture, attending hundreds of meetings of the Left where market forces were denounced and government intervention praised. As a NSW minister, not surprisingly, this became his modus operandi.
Instead of recognising this policy failing, senior Left figures have been off with the pixies. Both John Faulkner and Rodney Cavalier have been quoted in the Sydney Morning Herald fingering Macdonald as a long-standing right-wing “plant inside the Left”. “There were no secrets any more,” Faulkner said. “Ian Macdonald had finally come in from the cold.” This Cold War–style paranoia was echoed in the March issue of this magazine, in which Mark Aarons described Macdonald as “a triple agent”.
It is hard to know whether to laugh or cry. Macdonald was not spying for the Right. He was implementing the Left’s preferred economic model – the product of scores of Leftist policy manifestos. Their man, ‘Macca’, had no hesitation in picking winners, in this case conferring publicly sourced benefits to mining interests linked to the Obeid family. The Left’s lack of self-awareness is stunning. If Faulkner, Cavalier and Aarons want to know where the Macdonald effect came from, they ought to study the policy resolutions of their own meetings.
For NSW Labor, the ICAC inquiry has been the perfect storm: the exposure of the wheeling and dealing culture of the Right coinciding with the logical endpoint of the economic ethos of the Left. The eye of the storm now hovers over Gillard and her government.