Day yesterday quit the senate over the collapse of his building empire before the Federal Government revealed his re-election may have been invalid because he stood to benefit financially – albeit indirectly – from the rental paid by the Commonwealth on his Kent Town electorate office.
Speaking to InDaily this morning, Day lambasted the media for “barking up the wrong tree” and Special Minister of State Scott Ryan, whose actions in pursuing questions over his pecuniary interests he says have “put all MPs and senators in the lurch”.
“It was all approved,” Day insists.
“It wasn’t until Scott Ryan came along and started running off getting a legal opinion on something [that this became an issue] … and now because he doesn’t like the answer he’s put all MPs and senators right in the lurch.”
Nonetheless, Day insists “the onus is on the senator to decide whether they have a pecuniary interest”, arguing all the Government can do “is point you to the relevant act and you make a decision yourself”.
The relevant act, as it happens, is section 44 of the constitution, which states that anyone with a “direct or indirect pecuniary interest in any agreement with the Public Service of the Commonwealth… shall be incapable of being chosen or of sitting as a senator or a member of the House of Representatives”.
The key is whether Day’s arrangement on his electorate office, at 77 Fullarton Rd in Kent Town, constitutes an indirect pecuniary interest.
Day insists it does not.
He cites the 1975 case of Senator James Webster heard by Sir Garfield Barwick, who determined that “individual contracts awarded to a Senator’s family company were held to be outside the scope of section 44” because they would not influence the senator’s “parliamentary affairs” – a point Day emphasised today.
“It’s so indirect,” he said of his financial involvement in the property – SA’s unofficial conservative HQ, which he had previously dubbed the Bert Kelly Research Centre.
He sold the building after his election to Fullarton Investments Pty Ltd, a newly-formed company which ASIC documents show was originally owned by Debra Kim Smith, reportedly the wife of Day’s business partner John Smith.
It was subsequently transferred to Colin John Steinert, who the Plains Producer reported in 2011 was a project manager at Day’s Homestead Homes – the foundation company of his Home Australia Group which collapsed last month, prompting the senator’s resignation yesterday.
Day confirms Fullarton Investments was to receive rent for the property from the Commonwealth – although he says it never did – while repaying Day for the loan it used to purchase it.
“People only want to report the sensational, emotional conflict stuff, but the whole section of the act is about influencing the emotion or action of the MP or senator,” he said.
“The idea is all about influencing votes – it’s not about whether that money goes to him and that flows back to you, it’s about influencing the vote of an MP or senator.
“That’s the guiding principle of this: is it possible that a senator’s vote could be influenced by this pecuniary interest?”
Day said all the relevant information about the company was “on the public record”, but not on his own register of interests where in a box marked “Any other interests where a conflict of interest with a senator’s public duties could foreseeably arise or be seen to arise” he has written ‘nil’.
He said he didn’t have an obligation to declare the arrangement with Fullarton Investments because “it wasn’t me… it was a company that my wife is a shareholder and director of”.
He said he spoke to bureaucrats at the Department of Finance after his election who told him: “We can’t rent it from you, it won’t look good.”
“’It’s not advisable – it won’t pass the pub test’: that’s what the department kept saying,” Day told InDaily.
“I said ‘Well, I’ll sell it’.”
Day now claims the Government “is in possession of a legal opinion which says the day the Department of Finance signed a lease with Fullarton Investments Pty Ltd… was the day I became ineligible to be a senator”.
“That day was 1 December 2015. The lease specified no rent was to be paid until after 1 July 2016. No rent was ever paid to Fullarton Investments Pty Ltd,” he said in a statement today.
“I originally owned the building but sold it to Fullarton Investments Pty Ltd after the 2013 election to avoid any conflict of interest. But because Fullarton Investments owes me money, the Dept’s legal opinion says I have an ‘indirect’ interest in the lease.
“I now call on all MPs and Senators to immediately disclose whether they have any financial interest in any property or company which has a contract, lease, or agreement of any kind, with the Commonwealth… In my case, I had no contract or agreement with the Commonwealth. I had an agreement with someone else who had an agreement with the Commonwealth.”
Before his election in 2013, Day took InDaily on a tour of the “Bert Kelly Research Centre”, named after a former conservative Liberal MP.
At the time, he described it as “the conservative hub of Adelaide”, a space he shared with Liberal maverick Cory Bernardi, who recorded video updates in a backroom studio.
“Senator Bernardi moved out a couple of years ago,” Day said today.
The space was also home to Family First’s state headquarters and a range of other conservative-leaning groups and think-tanks. It featured a library of sympathetic political and economic tomes, with a lectern and seating facilities where he said conservative authors often held book-signings.
It was here that Day busily set about reforming Family First, proudly relating the process in 2013 by which he “put a bit of space between the Steve Fielding era and ourselves”.
“There wasn’t a lot of structure there, there wasn’t a lot of accountability and reporting,” he said.
He said he had remodelled the party along the same organisational lines as his Homestead Homes empire, and lamented his former Liberal colleagues for not being “conservative enough”.
“The Liberals are not conservatives. The Liberals are bigger spenders than Labor. The government grew under Howard,” he said.
“If you own your home, you’ve got a job, you’ve got your finances under control, you live in a safe neighbourhood, you don’t need the government. That’s the last thing the government would want, for you not to need them.”
Day said today he was distressed by media reporting of his Home Group empire’s collapse – with disgruntled creditors happy to speak on camera – but “I don’t mind this one”.
“I relish the opportunity to get to the High Court on this,” he said.
Family First’s state leader and state executive chairman Dennis Hood told ABC891 today “these things are sent to try us”.
“I’ve spoken to Bob about this at some length yesterday and he has actually shown me via email a document which was signed by the Special Minister for State at the time approving the arrangements, so the Government was fully aware of these arrangements back in 2013 or ’14,” he said.
“Not only were they aware of the arrangements, they approved them in writing – so it’s quite astounding to me that some three years later it’s raised as an issue of concern by them.”
If Day’s election is deemed invalid, the position could fall to his running mate Lucy Gichuhi – “who’s actually in Kenya at the moment, to further complicate things” – but it could also end up being taken by One Nation or Labor.
The Opposition was today questioning how long the Government had known about potential issues with Day’s eligibility.
SA Senator Penny Wong told ABC radio “obviously there are questions about the extent to which this has been something people have been concerned about for some time given the facts which have been reported”.
“I note that rent wasn’t paid in relation to this lease in question. I presume that is because there were concerns which preceded the election,” she said.
“And the Government has to understand, this is in the context of a gentleman who voted with the Government nine out of 10 times.”
Scott Ryan wrote to Senate President Stephen Parry last week detailing legal advice that raised “difficult constitutional questions” which have now been referred to the High Court.
Finance Minister Mathias Cormann told Radio National today “it is true that Senator Day has not received rent from the Commonwealth”.
“However, last Thursday, the Government did receive very clear legal advice from an eminent independent expert and, you know, that advice certainly put to the Government that there was a section 44 issue here in relation to a potential indirect pecuniary interest,” he said.
“We provided that advice to the President of the Senate the next morning… ultimately, the only authority in Australia that can determine whether or not there was an indirect pecuniary interest in breach of relevant provisions in the constitution is, indeed, the High Court, sitting as the Court of Disputed Returns.”
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