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NSW Labor boss dragged into ICAC cash scandal

NSW Labor boss Kaila Murnain has been dragged into a donation scandal engulfing her party after it was revealed she allegedly told a colleague to "be careful" with the bag full of cash at the centre of a corruption inquiry.

Ms Murnain is expected to give evidence at the Independent Commission Against Corruption on Wednesday as part of its investigation into an alleged scheme by Labor to circumvent the state’s donation laws.

NSW Labor general secretary Kaila Murnain.

NSW Labor general secretary Kaila Murnain.Credit:Alex Ellinghausen

The Aldi plastic bag was full of $100,000 cash, bound by elastic bands, and had allegedly been dropped off at Labor's Sussex Street headquarters by Chinese billionaire Huang Xiangmo, according to a key witness.

The witness, NSW Labor's community relations director Kenrick Cheah, said Ms Murnain had told him to be careful with the bag when learning what it contained after then-NSW Labor general secretary Jamie Clements handed it to him.


"I can recall shapes of people, so to speak, so, which leads me to believe there were three to four people there, but only because Kaila said to be careful was the, is the reason that I remember," Mr Cheah said.

Mr Cheah also revealed that after he was interviewed by the NSW Electoral Commission into the 2015 donations in June 2017, he had told Ms Murnain that Mr Huang had given the cash to Mr Clements.

Former NSW ALP general secretary  Jamie Clements, Chinese billionaire Huang Xiangmo and former Labor MP Ernest Wong.

Former NSW ALP general secretary Jamie Clements, Chinese billionaire Huang Xiangmo and former Labor MP Ernest Wong.Credit:

The Herald understands there is movement within Labor concerning Ms Murnain’s future after she was dragged into the scandal on Tuesday.

Two MPs, one a factional ally of Ms Murnain, said they didn’t believe she would remain in the top job for more than a few weeks following the ICAC revelations.

“I felt sick ... no one wants anything to do with the machine anymore,” one MP said about the first day of the inquiry.

The ICAC is investigating whether a set of “straw donors” were used to donate the cash at a Chinese Friends of Labor fundraising dinner in March 2015. Evidence provided to the commission by Ms Murnain suggests Mr Huang, who has since been barred from Australia, was the true source of the donations.

The inquiry on Monday heard the bag had allegedly been dropped off at Sussex Street by Mr Huang to Mr Clements.

Mr Cheah had said the billionaire had personally delivered the cash to bring himself “prestige”.

However, when questioned further by Mr Clements' lawyer Stephen Lawrence, Mr Cheah said he could not be certain Mr Huang had been holding the cash when he entered Labor's office.

Mr Lawrence accused Mr Cheah of attempting to mislead the Electoral Commission in 2017 when he gave evidence that Mr Huang had dropped the money at Labor's head office.

Mr Lawrence said the evidence was "self serving" and incriminated two people, Mr Clements and Mr Huang, who he did not have a close relationship with, compared to others implicated.

Mr Lawrence accused Mr Cheah of making evidence up, and using Mr Clements as a scapegoat.

“I don’t have any animosity towards Mr Clements to make him a scapegoat," Mr Cheah replied.

“It’s not made up at all, it’s 100 per cent truthful.”

Mr Cheah added that it was "well known" that Mr Clements and Ms Murnain had an "intense dislike for one another" when asked by Mr Lawrence whether the pair "hated each other".

Mr Cheah said he had likely made Ms Murnain aware there was a substantial amount of cash in the bag, but added the then-assistant general secretary probably didn’t know the overall figure.

“Not sure if I told her there was $100,000 in there but I definitely would have said something along the lines of ‘yeah there’s a lot of money in there’,” Mr Cheah said.

ICAC commissioner Peter Hall QC asked Mr Cheah if he had made any queries as to why all the donations in the bag, which were supposedly meant to have come from 12 separate people at the fundraising dinner, was entirely in cash.

Ms Cheah said it had struck him that it was unusual, but he had not asked any questions. He later took the cash home because he didn’t have access to a safe at Labor's premises, the inquiry heard.

Mr Huang was seated at the VIP table along with then state and federal leaders Luke Foley and Bill Shorten. Mr Cheah said the reason Mr Huang was seated at the table was because he was rich and powerful.

“I don’t know if there was someone richer or more powerful at the time,” he said.

The ICAC on Monday heard explosive evidence that a key witness took his own life after he learned he was implicated in the scandal.

Leo Liao, a director at developer Wu International, was due to give evidence at a compulsory private hearing on June 25, 2018, but took his life in the days prior.

Tom Rabe is a journalist with The Sydney Morning Herald

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