John Sidoti: The $41.4 million cabinet minister

 

Not much changed around their rural retreat at Rouse Hill in the 45 years boilermaker Otto Haller and his wife Marie-Luise Haller owned 38 Cudgegong Rd. They paid $3000 in 1969 for the 2.6ha block, built a shack, grew jasmine over the front veranda and knocked up a couple of sheds.

They were surrounded by farms and eucalyptus trees, and beyond the rusted front gate was a pot-holed road.

Then the developers came knocking, talking offers in the millions.

John Sidoti at the budget estimates hearing on Thursday
John Sidoti at the budget estimates hearing on Thursday

 

Pictures: Dean Lewins
Pictures: Dean Lewins

Four months after her husband died in January 2014, Mrs Haller signed a caveat, giving an entity of Chinese developer Southern Han International first dibs at buying the property. Mrs Haller could not be located to establish what she got in return, but land title records reveal that a year later she sold the property to Southern Han for $4.1 million.

The Telegraph has this week revealed the explosive details of what happened next - and the concurrent behind-the-scenes government deliberations over billions of dollars worth of new metro train lines and profitable higher density property zonings.

The ugly juxtaposition between these secret deliberations - gold for developers - and the multimillion-dollar property portfolio belonging to cabinet minister John Sidoti now threatens to end his political career. This week it triggered an inquiry into his conduct and a referral to the Independent Commission Against Corruption.

Mrs Haller's old Rouse Hill property, in which Sidoti holds a 10 per cent share via JAFS Investment Trust (named after the initials of his children Julian, Ava and Fabian), has since been approved to house 295 apartments - right next door to Tallawong, the last stop on the government's flagship North West Metro.

The cost of building four eight-storey towers on the site is $70 million. Valuations obtained by The Telegraph reveal that on completion the development will be worth $114 million - making Sidoti's share a staggering $11.4 million.

Design drawings for the approved $70 million development of four eight-storey residential towers at 38 Cudgegong Rd, Rouse Hill.
Design drawings for the approved $70 million development of four eight-storey residential towers at 38 Cudgegong Rd, Rouse Hill.

Add to that the potential return on a property development his mum and dad are completing in Five Dock and the family is sitting on a $41.4 million windfall.

Three days of damning revelations in The Telegraph lifted the lid on a banned political donation from Sidoti's developer partner at Rouse Hill, Southern Han International vice-president Ming Shang.

In addition, in three years Sidoti's elderly mum and dad spent $5 million on three lucrative parcels that he kept from the public for years while a site just one block away was firming as a likely location for a future Metro West station.

For Premier Gladys Berejiklian, already under intense internal pressure over her handling of the abortion bill, the scandal is a test of leadership that will not end with her belated call on Thursday to refer Sidoti to an inquiry.

After backing her minister on Wednesday when the story broke, citing how hard he works, her government was ridiculed over his farcical appearance before a parliamentary committee on Thursday. Sidoti stuck to a script of obfuscation and denial that was worthy of political comedy, saying 104 times - almost once for every minute he was in the hot seat - that he met all his disclosure obligations.

The chance to grill Sidoti before a budget estimates committee was a rich pickings for Labor, and a welcome relief soon after its own donation scandal involving $100,000 cash in an Aldi bag from a since-deported Chinese developer.

On Thursday Premier Gladys Berejiklian referred Sidoti to an inquiry. Picture: James Gourley
On Thursday Premier Gladys Berejiklian referred Sidoti to an inquiry. Picture: James Gourley

In two hours of questioning, Sidoti failed to provide a morsel of evidence that backed up his denials of wrongdoing. He stonewalled repeated attempts from Labor's Walt Secord and Penny Sharpe and the Greens' David Shoebridge to elicit a straight answer on how he reconciled and separated his private interests from his public duties, including previous roles as a parliamentary secretary for planning and transport.

A clearly exasperated Shoebridge appealed to Sidoti: "Minister, you were parliamentary secretary for planning by day and you were a property developer by night. There is such an obvious conflict of interest. How could you not understand that?"

"I understand that, and that is why I have complied with all my obligations and made all my appropriate disclosures," Sidoti said.

He was continually challenged on obvious years-long delays between property acquisitions and disclosures, and he did not provide any documents showing he had excused himself from any deliberations or decisions that may have increased the profit he stands to make from those holdings.

"I am saying outright that this is corrupt conduct under Section 8 of the Independent Commission Against Corruption Act and you should be referred for investigation," Mr Shoebridge said.

Greens MP David Shoebridge at Thursday’s hearing. Picture: Steven Saphore
Greens MP David Shoebridge at Thursday’s hearing. Picture: Steven Saphore

Sidoti replied: "It's wrong, it's false and I have always met my obligations. To even insinuate that I would use my position is disgraceful."

Within an hour of Sidoti leaving the hearing room, Berejiklian referred the minister's conduct to a review being conducted by Department of Premier and Cabinet secretary Tim Reardon. Reardon will look into whether Sidoti complied with his disclosure requirements, whether he had access to confidential information that was personally beneficial, and whether he "appropriately managed" any conflicts of interest.

The Premier expects the "thorough" review to be wrapped up quickly - potentially within days - and says it will provide the people of NSW with clarity around his alleged conflicts of interest.

A deep dive into Sidoti's conduct will turn up the heat even further on the Premier.

Berejiklian in April promoted Sidoti from parliamentary secretary to cabinet, handing him four ministerial portfolios - Veterans, Multicultural, Seniors and Sport - a hefty workload for a novice minister, knowing Sidoti had declared private property interests near the government's metro corridors.

This week she refused to answer The Telegraph's questions on whether Sidoti followed the ministerial code of conduct and declared a conflict of interest to her, and whether she subsequently gave him authority to act within his portfolios.

Opposition Leader Jodi McKay has referred the matter to the Independent Commission Against Corruption.

The metro heads in Tallwong railway station, close to the property at 38 Cudgegong Rd, Rouse Hill. Picture: Justin Lloyd
The metro heads in Tallwong railway station, close to the property at 38 Cudgegong Rd, Rouse Hill. Picture: Justin Lloyd

Ms Berejiklian told 2GB radio the review she has ordered would look into whether Mr Sidoti abided by the NSW ministerial code of conduct and whether he, either as a minister or in his previous roles, had access to confidential information that may have benefited him.

"I think what is important is for the public to maintain integrity and confidence in the process of government," she told Alan Jones.

Deputy Premier John Barilaro said the issue had come at a time when trust in politicians was at a particularly low point.

"We know public sentiment towards politicians and government has probably been at the lowest in many years," he told a budget estimates hearing. He said the ministerial code of conduct was "important" and that every minister should "use every endeavour to make sure that you follow the code".

"I would hope to believe that every minister abides by the code, fills in their pecuniary interest, they report everything that is accepted or expected from members of parliament," Mr Barilaro said.

Deputy Premier John Barilaro.
Deputy Premier John Barilaro.

In a disclosure record remarkable for its gaps, Sidoti's declarations are surprisingly prompt on his interest in 38 Cudgegong Rd.

He declared his interest in the land in September 2014, when the option was still in place but prior to the purchase in March 2015, just as he was celebrating his re-election in Drummoyne.

The re-election was helped by a donation from Southern Han's Shang, repaid by the Liberal Party this week.

In the hearing, Secord grilled Sidoti over how he came to own his 10 per cent share in the Cudgegong Rd deal, worth $11.4 million.

"Was that a gift, a purchase or a share?" Secord asked.

"When it comes to property disclosures, Mr Secord, I have complied with all my obligations," Sidoti replied.

"Fifty-one times now you have used that excuse. Are you now going to say the dog ate my homework," Secord asked.

"I am offended that you would even suggest that a member of parliament would be gifted something," Sidoti retorted.

When the option on the land was taken out, Sidoti was chair of the parliamentary standing committee on ethics overseeing conflicts of interest and disclosure matters.

"You accept that that is an important role," Sharpe asked.

"A very important role. Everybody should make the proper declarations," said Sidoti, triggering sniggers from observers in the room.

Before heading to Macquarie Street in 2011, Sidoti was mayor of Burwood council and ran a function centre with his family at 120 Great North Rd.

The former function centre space is owned by his parents and is now rented out to a gospel church.

Walt Secord grilled Sidoti at Thursday’s hearing. Picture: Carmela Roche
Walt Secord grilled Sidoti at Thursday’s hearing. Picture: Carmela Roche

His mum and dad's $5 million buying spree of three adjoining properties is metres from a possible site of a future Metro West station.

Plans to consolidate the four Five Dock parcels of land and build 20 units plus a second building of two four-bedroom units have been drawn up by Zhinar Architects, part of Southern Han International and the same firm which has designed the Rouse Hill development.

On completion, the project has an estimated value of $30 million.

Sidoti delayed reporting the new properties to parliament for up to three years - while confidential discussions ensued within the transport department over the possible sites of the stations for the government's planned key infrastructure project. In 2014, the same year the first property of three was purchased, the precinct received a more lucrative zoning from the local council, changing it from general commercial to mixed-used commercial and residential - and allowing building heights to be increased by a further three storeys.


Sidoti denied helping or advising his parents in the purchases, but his returns show he acknowledges an interest in the trust that owns two of the four holdings, and all four lots are declared on his most recent return.

"I have been cautious since the day I was elected to parliament because my commitment is to my electorate and the people of my electorate. I do things for the right reason, Mr Secord," Sidoti said during the hearing.

"I think it is your bank balance," Secord replied.

"Today's evidence shows very clearly what motivates you, Mr Sidoti - property deals and fattening your own bottom line."



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