Dear Members of the Tribunal,

RE: Kaila Murnain

1. We write seeking the expulsion of former General Secretary Kaila Murnain from NSW Labor,
on the grounds that she has brought the Party into disrepute, among other things by being
investigated by a public authority for improper conduct under contrary to Rule A.33(a) and (i).

2. This submission is in three parts. Part A sets out the undisputed facts concerning Murnain’s
conduct. Part B explains why this means Murnain has brought the Party into disrepute. Part C
explains why immediate expulsion, rather than expulsion following the Independent
Commission Against Corruption (ICAC)’s Operation Aero’s report, is the only appropriate
remedy.

A. Murnain’s Conduct
3. The following summary of the facts is based on Murnain’s sworn evidence, under penalty of
perjury, before ICAC Operation Aero. We understand that it is not disputed.1

4. ICAC Operation Aero is an investigation into:2

whether, from January 2015, officials of the Australian Labor Party (NSW Branch)
(NSW Labor), members of Chinese Friends of Labor, political donors and others have
entered into or carried out a scheme to circumvent prohibitions or requirements under
Part 6 of the Election Funding, Expenditure and Disclosures Act 1981 (NSW) relating
to political donations.

5. In January 2015, Murnain was Assistant Secretary of NSW Labor.3 By the time of the Operation
Aero hearings in August 2019, she had become General Secretary of NSW Labor.4

6. On or about 6 April 2015, Murnain became aware of a cash donation of $100,000 to NSW
Labor and Country Labor.5 On 16 September 2016, Murnain aware became from Ernest Wong,
a member of the NSW Legislative Council, that this donation was not donated by the disclosed
donors, but by Huang Xiangmo, who she knew to be a Chinese property developer6 and
therefore a prohibited donor for the purposes of NSW law.7 Following discussions with Wong
and former General Secretary Sam Dastyari,8 Murnain chose to keep the illegal donation secret,

1
For the avoidance of doubt, this charge does not accuse Murnain of any further misconduct beyond what she has already
admitted to in her sworn evidence.
2
ICAC Operation Aero, Opening Statement of Counsel Assisting the Commission [1], 26 August 2019, available at
https://www.icac.nsw.gov.au/ArticleDocuments/902/26-08-2019%20Operation%20Aero%20-%20Opening%20Statement.
pdf.aspx.
3
ICAC Operation Aero, Transcript 205T, 28 August 2019, available at
https://www.icac.nsw.gov.au/ArticleDocuments/902/28-08-2019%20Operation%20Aero%20transcript%20pp.%2000202-0
0249%20from%202.00pm%20to%204.23pm.pdf.aspx.
4
Ibid, 204T.
5
Ibid, 222T.
6
Ibid, 230T-231T.
7
Ibid, 232T.
8
Ibid, 238T.
1
 rather than disclose it to the NSW Electoral Commission as required by NSW law.9 She did so
even when the NSW Electoral Commission opened an investigation into the donation.10 She
agreed that, when first compulsorily examined by ICAC, she was ‘less than forthcoming’ in that
she did not tell ICAC about her meetings with Wong or Dastyari, even though she was legally
required to answer ICAC’s questions.11

7. In fact, the illegal donation remained secret until it was sensationally revealed in ICAC hearings
on 28 August 2019. By the following day, Murnain had been suspended as General Secretary.12
She resigned on 17 October 2019.13 This makes her the third consecutive General Secretary to
leave public life in under a cloud. Her immediate predecessor, Jamie Clements, resigned on 14
January 2013 in the midst of a sexual harassment scandal.14 His predecessor, Sam Dastyari,
resigned from the Senate on 11 December 201715 after media reports that he told Huang the
latter’s phone was likely being tapped by Australian intelligence agencies.16

B. Murnain’s Conduct Brought the Party into Disrepute

8. Rule A.33(a) of the NSW Labor Rules 2018 provides:
Any member can charge another member with:
● bringing the Party into disrepute;

9. Rule A.33(i) further provides:

Without limiting the generality of subsection (a), ‘bringing the Party into disrepute’ may
include members being investigated by a public authority for improper conduct, where
that investigation is bringing the Party into disrepute.

9
Ibid, 244T; ICAC Operation Aero, Transcript 258T-259T, 29 August 2019, available at
https://www.icac.nsw.gov.au/ArticleDocuments/902/29-08-2019%20Operation%20Aero%20transcript%20pp.%2000250-0
0299%20from%2010.00am%20to%2012.43pm.pdf.aspx.
10
ICAC Operation Aero, Transcript 260T-267T, 29 August 2019, available at
https://www.icac.nsw.gov.au/ArticleDocuments/902/28-08-2019%20Operation%20Aero%20transcript%20pp.%2000202-0
0249%20from%202.00pm%20to%204.23pm.pdf.aspx.
11
ICAC Operation Aero, Transcript 688T, 5 September 2019, available at
https://www.icac.nsw.gov.au/ArticleDocuments/902/05-09-2019%20Operation%20Aero%20transcript%20pp.%2000674-0
0709%20from%2010.15am%20to%2012.48pm.pdf.aspx.
12
Ibid, 252T.
13
Christopher Knaus, ‘Outgoing NSW Labor boss denounces 'nasty culture of sexism' after formally resigning’, The
Guardian, 17 October 2019, available at
https://www.theguardian.com/australia-news/2019/oct/17/outgoing-nsw-labor-boss-denounces-nasty-culture-of-sexism-af
ter-formally-resigning.
14
Daniel Hurst, ‘Jamie Clements quits as NSW Labor boss after harassment allegations’, The Guardian, 14 January 2016,
available at
https://www.theguardian.com/australia-news/2016/jan/14/jamie-clements-quits-as-nsw-labor-boss-after-harassment-allega
tions.
15
Amy Remeikis, ‘Sam Dastyari quits as Labor senator over China connections’, The Guardian, 11 December 2017, available
at https://www.theguardian.com/australia-news/2017/dec/12/sam-dastyari-quits-labor-senator-china-connections.
16
Katharine Murphy, ‘Sam Dastyari's loyalty to Australia questioned after he tipped off Chinese donor’, The Guardian, 29
November 2017, available at
https://www.theguardian.com/australia-news/2017/nov/29/sam-dastyaris-loyalty-to-australia-questioned-after-he-tipped-of
f-chinese-donor. For the avoidance of doubt, we are agnostic as to whether the allegations against Clements or Dastyari are
true.
2
 10. Murnain’s conduct is being investigated by ICAC, a public authority. The relevant questions,
then, are twofold.
a. First, is it proper conduct for the General Secretary of NSW Labor to engage in what
effectively amounts to a conspiracy of silence to conceal illegal donations from the
NSW Electoral Commission?
b. Second, is the investigation into Murnain’s conduct bringing the Party into disrepute?

a. It cannot be proper conduct for the General Secretary of NSW Labor to engage in a conspiracy of
silence to conceal illegal donations from the NSW Electoral Commission.
11. Rule A.33(i) concerns ‘improper’ conduct. Our submission is that the rule is engaged by any
conduct a reasonable member of the public would consider improper, whether or not it is
criminal,17 for three reasons.

12. First, the language of Rule A.33(i) supports this interpretation. The choice of the broad word
‘improper’, rather than ‘illegal’ or ‘criminal’, is deliberate: there is no express requirement that
the conduct be unlawful or a crime.

13. Second, the context of Rule A.33(i) supports this interpretation. The improper conduct is a
subset of conduct ‘bringing the Party into disrepute’, which could be done by legal or illegal
conduct.

14. Third, the purpose of Rule A.33(i) supports this interpretation. The Rules do not aim to create a
parallel criminal justice system. They aim to govern NSW Labor as a political entity which
supports candidates for public office. The charging provisions’ purpose is in part to protect the
Party’s reputation by excluding those whose continued membership could damage it, which as
above could be done by legal or illegal conduct.

15. A reasonable member of the public would consider Murnain’s participation in this conspiracy of
silence improper, for two reasons.

16. First, Murnain’s conduct effectively amounts to a conspiracy of silence, along with Wong and
Dastyari, with the purpose and effect of concealing a criminal offence. Based on their
discussions, Murnain decided to keep the evidence of the illegal donation secret rather than
reporting it to the proper authorities. This is all the more improper, because as the General
Secretary she was the person ultimately responsible for NSW Labor’s reporting to the NSW
Electoral Commission, and as a witness before ICAC, she was legally required to answer
questions about the donation truthfully.

17. Second, the crime she chose to conceal strikes at the heart of NSW democracy. The relevant
NSW law aims to further public trust in the political system, by preventing the appearance of
influence-buying by property developers or interference by foreigners in the NSW politics.
Murnain’s conduct was all the more improper, because as General Secretary members placed
17
See also Powell & Carr, NSW Labor Review Tribunal [20]. For the avoidance of doubt, we are agnostic as to whether the
conduct described above amounts to a criminal offence.
3
 her in a position of trust to run NSW Labor in a way consistent with the Rules’ principles of
democracy and integrity.

b. Murnain’s conduct brings the Party into disrepute.

18. The Review Tribunal has found that the relevant question is whether the conduct brings the
party into disrepute in the eye of the public generally.18 Four factors indicate Murnain’s conduct
does so.

19. First, under penalty of perjury before ICAC Operation Aero, Murnain herself agreed that her
conduct ‘cast an unfair shadow over the entire party and its members’, including that it
‘compromised the ALP… because it opened them up to suggestions of… the ALP engaging in
acts of illegality’.19

20. Second, Murnain’s conduct attracted considerable adverse media coverage over the course of
months, including from the ABC,20 SBS,21 the Sydney Morning Herald, the Australian,22 the
Australian Financial Review,23 and the Guardian.24

21. Third, the Administrative Committee’s response to Murnain’s conduct, to immediately suspend
her and later require her resignation, indicates that Murnain’s ongoing association with the Party
continued to damage its reputation and urgently needed to be severed.

22. Fourth, Murnain’s conduct needs to be examined in context. Due to the activities of disgraced
former NSW Right powerbroker Eddie Obeid, NSW Labor has become synonymous with
corruption: a Google search for ‘NSW Labor corruption’ turns up approximately 765,000
results (the first of which is ‘NSW Labor in corruption scandal, again’). Murnain is the third
consecutive General Secretary to leave public life in under a cloud, in a scandal which taps into
pre-existing public concerns about property developer donations’ corrupting influence on NSW

18
Powell & Carr, NSW Labor Review Tribunal [20].
19
ICAC Operation Aero, Transcript 828T, 6 September 2019, available at
https://www.icac.nsw.gov.au/ArticleDocuments/902/06-09-2019%20Operation%20Aero%20transcript%20pp.%2000819-0
0834%20from%202.00pm%20to%202.46pm.pdf.aspx.
20
Selby Stewart and Kathleen Calderwood, ‘NSW Labor boss Kaila Murnain resigns amid ICAC inquiry’, ABC News Online,
17 October 2019, available at
https://www.abc.net.au/news/2019-10-17/nsw-labor-boss-kaila-murnane-resigns-amid-corruption-inquiry/11611266.
21
‘Ex-NSW Labor boss Kaila Murnain concedes she was “less than forthcoming” to ICAC’, SBS News Online, 5 September
2019, available at
https://www.sbs.com.au/news/ex-nsw-labor-boss-kaila-murnain-concedes-she-was-less-than-forthcoming-to-icac.
22
Andrew Clennell, ‘ICAC-tainted Labor boss Kaila Murnain in bid to stay on’, The Australian, 15 October 2019, available at
https://www.theaustralian.com.au/nation/politics/icactainted-labor-boss-kaila-murnain-in-bid-to-stay-on/news-story/f1a0d
7fa89abbd3750e8fe8e273f5877.
23
Angus Grigg, ‘ICAC evidence leads to suspension of NSW ALP boss’, The Australian Financial Review, 28 August 2019,
available at
https://www.afr.com/politics/alp-boss-kaila-murnain-suspended-after-sensational-evidence-at-icac-20190828-p52lnh.
24
Christopher Knaus, ‘Kaila Murnain tells Icac her silence over unlawful donations cast “shadow” over Labor, The Guardian,
6 September 2019, available at
https://www.theguardian.com/australia-news/2019/sep/06/kaila-murnain-tells-icac-her-silence-over-unlawful-donations-ca
st-shadow-over-labor.
4
 politics, and foreign interference in democracy. This context has exacerbated the effect of her
conduct on the Party’s reputation.

C. Immediate Expulsion is the Only Appropriate Remedy

23. The remedy sought is Murnain’s immediate expulsion from NSW Labor. This Part explains why
expulsion is the appropriate remedy, and why it should be granted immediately, rather than
delayed until (for example) ICAC releases its report into Operation Aero.

a. Expulsion is the only appropriate remedy.

24. First, for all the reasons set out above, Murnain’s conduct is objectively serious, amounting to a
conspiracy of silence to conceal illegal donations by a Chinese property developer, in breach of
the trust that members place in her. Murnain had numerous opportunities to come clean and
repent of her conduct. She could have immediately reported the illegal donation, properly
answered the NSW Electoral Commission’s enquiries about the donation, or given forthcoming
evidence when first examined by ICAC. She chose to do none of these things.

25. Second, expelling Murnain, and clearly demonstrating this conduct is completely unacceptable
in NSW Labor, is the only way to begin properly repairing NSW Labor’s reputation. A mere
reprimand or suspension would not signal a clean break with the scandals of the
Dastyari/Clements/Murnain era.

b. The remedy should be granted immediately, rather than awaiting the ICAC Operation Aero report.
26. First, the need to expel Murnain is urgent. For as long as she remains a member of NSW Labor,
the illegal donation scandal remains a running sore in NSW Labor’s side, as reflected by
ongoing adverse media coverage. Expulsion allows NSW Labor to make a clean break with the
scandals of the Dastyari/Clements/Murnain era, voluntarily, without being shamed into action
by Operation Aero’s report. By contrast, allowing Murnain to remain a member threatens to
continue the appearance that NSW Labor, like Murnain herself, tolerates illegal and corrupt
conduct and protects wrongdoers.

27. Second, there is simply no need to wait for ICAC’s findings. There is no meaningful dispute as
to the facts for ICAC to resolve: the summary of facts set out above reflects Murnain’s sworn
evidence, under penalty of perjury. Whatever else ICAC may find, and however the criminal
prosecuting authorities and courts may subsequently deal with Murnain, these facts themselves
establish conduct requiring Murnain’s expulsion.

28. In the end, the question the Tribunal has to decide is simple: is it acceptable for the General
Secretary of NSW Labor to engage in a conspiracy of silence to conceal illegal donations from
the NSW Electoral Commission? The Administrative Committee and the public have already
decided their answers to this question. We submit the Tribunal’s answer should be the same.

29. We would be grateful for the opportunity to make further submissions in reply to any made by
Murnain, and for the chance to address any questions the Tribunal may have.

5
Yours sincerely,
Harry Stratton.