Sinodinos stands aside during corruption inquiry

Senator Arthur Sinodinos has stood aside from his role as Assistant Treasurer. AAP/Alan Porritt

Assistant Treasurer Arthur Sinodinos has bowed to political pressure and stood aside from the ministry during the Independent Commission against Corruption’s inquiry into a company he chaired that was financially linked to the notorious Obeid family.

“I do not want this sideshow to be an unnecessary distraction to important work of the government which I am proud to serve,” Sinodinos told the Senate in a short statement in which he again pledged he would fully co-operate with the investigation.

He thanked colleagues “for their strong support and … their ongoing faith in my integrity. The ICAC is an important forum, the appropriate forum for me to answer any questions in relation to this matter”.

Sinodinos’ standing aside comes as a relief to government MPs. There was widespread concern in the government about the affair overshadowing the run up to the Senate election in Western Australia on April 5.

Prime Minister Tony Abbott told Parliament just before question time: “Earlier today, Senator Sinodinos advised me of his decision to step aside for the good of the government until the investigation into Australian Water Holdings has been resolved at least as far as he is concerned.

"Senator Sinodinos has done the right and decent thing … as you’d expect from someone who has given our country such long and faithful service.

"I look forward to his restoration to the ministry.”

The Minister for Finance Mathias Cormann will undertake Sinodinos’ duties.

The opposition immediately turned its attention to what Tony Abbott might have known when he appointed Sinodinos to the ministry.

There was speculation, when he was made assistant treasurer rather than being given the more senior post of finance, that this could have been because of some apprehension about the coming ICAC inquiry. Abbott strongly denied this at the time.

He said today that Sinodinos had been appointed to the ministry because he was a man of “great distinction and of high competence”.

Asked who had made the decision for Sinodinos to stand aside, Abbott said: “He made the decision”. He said that Sinodinos’ standing aside was in “the best Westminster tradition.”

Abbott dodged questioning about if and when he had discussed AWH with Sinodinos. “It’s not my job to provide a running commentary on private discussions,” he said.

Earlier Labor and the Greens combined in the Senate to demand Sinodinos provide a “full explanation” of his role as a director of Australian Water Holdings, especially its political donations, his shareholdings and his role in contract negotiations.

Labor’s Senate leader Penny Wong told the Senate: “This senator is being investigated by two separate anti-corruption inquiries – Operation Credo and Operation Spicer”. There were no allegations being made in the motion calling on him to make a statement, she added.

Labor alleged it was now clear there were inconsistencies and inaccuracies in what Sinodinos had told the Senate in February last year when he made a statement on his role in the company, which had secret financial links to the notorious Obeid family.

The Independent Commission against Corruption heard this week that AWH had given donations to the NSW Liberal party - of which Sinodinos at the time was a senior office holder - that were extracted as expenses from Sydney Water. Sinodinos has denied any knowledge of the donations and said he had not been told that the Obeid family had bought into the company.

Attorney-General senator George Brandis accused Labor of a “disgraceful smear” against “one of the greatest Australians who’s participated in the life of this country over the last two decades”.

He said no allegations of any wrong-doing had been made against him.

Sinodinos did not appear in the chamber during the morning long debate.

The opposition, who (apart from one MP, Kelvin Thomson) had steered away on Tuesday from calling for Sinodinos to stand aside from the ministry, had moved to do so today.

Shadow treasurer Chris Bowen said if Sinodinos could not make a full statement “then he should stand aside and if he won’t stand aside the prime minister should show some leadership and stand him aside”.

Former prime minister John Howard declared in a statement that Sinodinos, his former chief of staff, was “a man of great integrity and ability”.