Bentleys, brown paper bags and bundles: Newcastle can’t shake reputation for wheeling and dealing

Jul 22, 2023

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Bentleys, brown paper bags and bundles of cash. It’s nearly a decade since a corruption inquiry unearthed astonishing evidence of wheeling and dealing by Newcastle’s political and business elite.

Geoffrey Watson SC, who led the charge as the ICAC’s counsel assisting during Operation Spicer, had hoped the inquiry he worked on in 2014 would usher in a new era of integrity for the coal city as it left its seedy underbelly behind.

Newcastle is facing a fresh scandal years after a corruption inquiry sent shockwaves through the city.

However, this week’s revelations that the Labor MP for Newcastle Tim Crakanthorp did not declare extensive property holdings belonging to his family – a decision that has seen Premier Chris Minns sack him as a minister and refer him to the corruption watchdog – has put a dent in Watson’s optimism.

“To me, I look at it and laugh and say that’s classic Newcastle,” Watson, a director at the Centre for Public Integrity, said on Friday.

“I would have thought it would be maybe a time for the good people of Newcastle to reassert control, wrest it from the bad guys in this Machiavellian battle.

“I’m not saying that didn’t happen, but it does seem to me what I’m hearing about Crakanthorp is classic reversion to earlier conduct.”

Geoffrey Watson, who led ICAC’s Operation Spicer. Credit: Rob Homer

Dwarfed by Sydney but far denser than a country town, Newcastle has been casting off its industrial identity with the rapid gentrification of the inner-city, spurred along by rezoning decisions and rivers of cash flowing from state government coffers.

Watson believes a perfect storm of factors has bred an environment ripe for bad behaviour.

“I always felt Newcastle was an odd place, insofar as it seemed to be run by a smallish group of very powerful people, well placed in the law, politics, but mainly business, who really seemed to be in control.

“There seemed to be these sort of weird oligarchs, who were very wealthy, controlled particular industries, and manipulated and did things themselves.”

Tim Crakanthorp (left) and Chris Minns pose together shortly after this year’s election.Credit: Instagram/@timcrakanthorp

Watson said Newcastle was a wonderful city with impressive leaders, many of whom were wealthy because they were skilled entrepreneurs. But he believed its problems could be traced back to “too much power in too few hands”.

In 2014 the ICAC put a blowtorch through the Liberal party’s ranks in Newcastle, as it investigated NSW politicians for accepting banned donations from property developers. Crakanthorp’s career in state politics was born from the ashes.

Liberal Member for Newcastle Tim Owen resigned after confessing he accepted an envelope stuffed with $10,000 in cash from developer and then Newcastle lord mayor Jeff McCloy.

Charlestown MP Andrew Cornwell was another Liberals casualty after admitting to receiving $10,000 in a brown paper bag during a rendezvous in McCloy’s Bentley, and accepting money from another property developer disguised by a sham artwork sale.

McCloy, who described himself as a “walking ATM”, also confessed to giving money to Swansea MP Garry Edwards. Edwards stood aside but denied looking inside the envelope before passing it to a Liberal party official.

Crakanthorp, a long-term Newcastle councillor who had been angling for the state seat, was finally rewarded for his patience as he was preselected to stand for Labor in a by-election triggered by Owen’s resignation.

The son of two school teachers from the sleepy town of Moruya, on the NSW South Coast, had moved to Newcastle for university and “fell in love with the city”.

Crakanthorp was a keen surfer and family man raising four kids with his wife Lara, now known as Laura. He had long been scaling the ranks of the ALP, but also boasted real-world experience in disability care and mine safety and had served on the board of the Westpac Rescue Helicopter Service.

Crakanthorp’s campaign was not without its wobbles as he was quizzed about 18 months he had spent working for disgraced Lake Macquarie businessman Hugh Charles Gordon.

Some Hunter families lost everything after Gordon’s company, Whet Investments, collapsed in 2005 after raising more than $10 million. Gordon was jailed for 11 months on dishonesty and fraud charges in 2010.

Crakanthorp admitted to the Newcastle Herald he had been warned about Gordon but said: “As soon as I realised it was not a good place to be I stopped working there.”

When asked if revisiting the issue was fair, he said: “I don’t think it’s significant at all.”

During another interview with the newspaper, Crakanthorp batted off suggestions Novocastrians would still be wary of Labor due to past corruption scandals.

“Joe Tripodi is out of the party now. It’s a new crop of people,” he said at the time.

Candidates in the October 2014 by-election were made to attend an Electoral Commission of NSW seminar where they were drilled in their funding and disclosure obligations.

Crakanthorp won the seat with a weaker-than-expected 37 per cent of the primary vote. In his maiden speech, he made only a passing reference to the ICAC turmoil that had resulted in his predecessor’s downfall and McCloy’s resignation as Lord Mayor.

“This experience has given me an even deeper appreciation of what is really important to the everyday lives of my fellow citizens of Newcastle,” he said.

On Friday McCloy told the Herald he was surprised at Crakanthorp’s failure to comply with his disclosure obligations.

“He watched me leave the room many times if there was a hint of a conflict of interest as they should be easily managed,” McCloy said.

Current Newcastle Lord Mayor Nuatali Nelmes, who has never been found to have engaged in misconduct or wrongdoing during her tenure, said Crakanthorp had been very supportive of the council’s “progressive agenda”.

“Particularly supporting our strong action on climate change and net zero targets,” Nelmes said. “Tim also helped secure the vital $25 million to combat devastating coastal erosion ... after years of campaigning from the community and council.”

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