NSW Labor boss Kaila Murnain has been suspended after explosively telling an anti-corruption inquiry she knew a Chinese billionaire had made a potentially illegal donation to the party.
Ms Murnain, 32, the first woman to be Labor’s general secretary in NSW and considered a potential future prime minister, dropped the bombshell as she took to the Independent Commission Against Corruption witness box on Wednesday.
She told the inquiry that in September 2016 upper house MP Ernest Wong told her Huang Xiangmo, a banned donor, had donated to the state ALP.
NSW Labor leader Jodi McKay on Wednesday night said she was appalled by the evidence given to the inquiry this week and is stepping in to ‘clean up the mess’.
Ms McKay asked party officials to suspend Ms Murnain as general secretary.
‘I no longer have confidence in her judgement. I will have more to say about governance within the party at the conclusion of the inquiry,’ Ms McKay said in a statement.
A senior Labor source told Daily Mail Australia the revelations Ms Murnain knew of the donation and kept quiet were a ‘bombshell’.
Kaila Murnain leaves The NSW Independent Commission Against Corruption (ICAC) public inquiry into allegations concerning political donations in Sydney on Wednesday
‘It’s absolutely devastating for the general secretary to do something like that,’ they said.
The source said there was ‘some speculation’ about Ms Murnain and suggested her time was already ‘coming to an end due to a whole range of issues’.
Despite the criticisms, the source understood why she was once pegged as a future prime minister.
‘She had a lot acclaim in the party… had federal ambition, saw the state party was too small for her,’ they said.
‘Her future looked extremely promising, she did some good things.’
The source added Ms McKay was forced to ‘salvage’ the situation.
Ms Murnain (left), 32, the first woman to be Labor’s general secretary in NSW and seen by some as a future prime minister, told the Independent Commission Against Corruption on Wednesday that in September 2016 upper house MP Ernest Wong told her Huang Xiangmo (right) – a banned donor – had donated to the state ALP
‘What Jodi did, she had to do it. She’s been very supportive of Kaila,’ they said.
‘Did Kaila know this and did she keep this to herself?’ he questioned.
‘There is a bit of speculation about how far in this office did it go. Did it just stop and start with Kaila or were other people aware of this?’
Meanwhile, Ms Murnain said Mr Wong was ‘distressed and agitated’ when he told her a person who said they had donated money to the state party had not actually done so – and the money had instead come from Mr Huang.
The party’s general secretary urged Mr Wong several times to get the person to come forward, the inquiry heard.
NSW Labor leader Jodi McKay on Wednesday night said she was appalled by the evidence given to the inquiry this week and is stepping in to ‘clean up the mess’. Ms McKay asked party officials to suspend Ms Murnain as general secretary
Ms Murnain said she couldn’t remember the donation amount but connected it to the money raised at a 2015 Chinese Friends of Labor dinner which is at the centre of the ICAC inquiry.
The inquiry earlier in the week heard Mr Huang allegedly handed $100,000 cash in a plastic Aldi shopping bag to NSW Labor’s then-general secretary Jamie Clements a few weeks after the March 2015 CFL dinner.
‘At some point I responded back (to Mr Wong) ‘What the s***?’,’ Ms Murnain told Wednesday’s hearing.
‘I do remember stepping back and realising what all this meant. That a significant donor had made a donation to our state campaign account who was a prohibited donor.’
After calling then-Labor senator Sam Dastyari for advice, Ms Murnain went to see the party’s lawyer Ian Robertson.
Ms Murnain said she told him: ‘There’s been a massive f**k up.’
She told the inquiry she was advised to ‘forget the conversation happened’ after she informed the lawyer she believed Mr Wong.
‘At the end of the conversation, Ian told me, ”There is no need to do anything from here, don’t record this meeting, don’t put it in your diary, forget the conversation happened with Ernest and I won’t be billing you for this either”,’ she said.
‘And (he said) ‘Don’t tell anyone about it’. So I literally didn’t tell anyone about it.’
NSW Labor boss Kaila Murnain will be suspended after explosively telling an anti-corruption inquiry she was advised by the party’s lawyer not to tell anyone a Chinese billionaire had made a potentially illegal donation to the ALP
The Labor source noted Ms Murnain was appointed by Mr Dastyari, who was dumped by Bill Shorten over his links to Chinese donors.
‘There was a culture under Sam of recklessness… They were brazen,’ the source said.
‘That was a big part of why Sam was moved on from head office. Kaila didn’t seem to learn from that.’
The source said one of the contenders to replace Ms Murnain is an apprentice of Dastyari and suggested the party ‘may not be learning from our errors’.
ICAC is examining whether Mr Huang – who is now banned from Australia – was the true source of the $100,000.
As a property developer, Mr Huang was prohibited by law from making donations to NSW political parties.
Labor staffer Kenrick Cheah told the NSW Electoral Commission in 2017 that Mr Huang went to the party’s Sydney office a few weeks after the CFL dinner and gave Mr Clements the cash-stuffed bag which was later passed on to Mr Cheah.
But when questioned by Mr Clements’ lawyer at the inquiry on Tuesday, Mr Cheah admitted he didn’t actually see Mr Huang carrying the bag of money.
Ms Murnain is due to continue giving evidence on Thursday.
Mr Dastyari – whose connection with Mr Huang in part led to his political downfall – is also expected to address the inquiry.
Who is Kaila Murnain – and why is she considered a potential future PM?
Ms Murnain grew up in regional areas that are normally conservative voting and has been a party activist since she was a teenager.
She was raised in the country, spending part of her childhood in the NSW central-west cotton-growing town of Narrabri.
Like two former Labor PMs – Mr Whitlam and Paul Keating – Ms Murnain hails from Labor’s powerful Right faction and is based in Sydney.
She is also a political insider, which significantly increases her chances of winning preselection for a winnable seat.
While party bosses and political insiders aren’t necessarily household names with voters, they have gone on to win elections, as Scott Morrison showed in May.
Labor’s federal leader Anthony Albanese was himself the party’s assistant general secretary in NSW from the minority Left faction before being elected as the member for Grayndler in Sydney’s inner-west in 1996.
Ms Murnain presided over NSW Labor’s March election loss while only one of her party’s federal candidates in NSW won a seat from the Liberal Party at this year’s federal election.
Asked about her prospect of being a future Labor prime minister, Ms Murnain threw her support behind Mr Albanese.
‘Albo will be a strong and unifying force as leader of the party, and we are all excited and ready to take the fight to the Liberals and Nationals under his leadership,’ she previously told Daily Mail Australia.
Ms Murnain and husband Tom Hollywood underneath the Eiffel Tower in Paris
Ms Murnain’s bombshell admission and subsequent suspension comes just months after she was considered by Labor figures as a future leader.
In May, Veteran Labor strategist Bruce Hawker said Ms Murnain’s role as Labor’s first female general secretary in NSW, since 2016, spoke volumes about her ability.
‘She’s a very strong person and that’s important as a leader,’ he told Daily Mail Australia.
‘She runs a tight show which is also important and is very hands on – she doesn’t sit back and allow everybody else to do the thinking for her, she’s in there with her sleeves rolled up driving the agenda. They’re all very positive things.’
Pat Garcia will take over from Ms Murnain as general secretary.
Ms Murnain’s bombshell admission and subsequent suspension comes just months after she was considered by Labor figures as a future leader. In May, Veteran Labor strategist Bruce Hawker said Ms Murnain’s role as Labor’s first female general secretary in NSW, since 2016, spoke volumes about her ability