Money-washing claims engulf NSW Libs

A fresh corruption inquiry will expose how NSW Liberal figures flouted electoral funding rules. Source: AAP

ALLEGATIONS of systematic political donation rorting have engulfed the NSW Liberals and sent yet another party MP to the crossbench.

The Independent Commission Against Corruption (ICAC) on Monday aired claims Liberal figures had used a sham company to secretly funnel more than $400,000 in political donations in exchange for favours from sidelined cabinet minister Chris Hartcher.

Counsel assisting the inquiry, Geoffrey Watson, said the watchdog's investigators had uncovered evidence of "sophisticated, well-organised and systematic subversion of the electoral funding laws" of NSW.

New Premier Mike Baird - who took the job two weeks ago, when Barry O'Farrell was forced to resign over a related ICAC probe - said he was appalled by allegations raised so far.

"If any wrongdoing is found, the book should, and will, be thrown at the perpetrators," he said.

Central to ICAC's Operation Spicer is alleged slush fund EightByFive, which was set up by Mr Hartcher's former staffer Tim Koelma.

The company purported to offer marketing and strategic advice, Mr Watson said.

But its true role was to conceal political donations from property developers. These have been banned in NSW since 2009.

The inquiry has heard EightByFive received $66,000 from coal entrepreneur Nathan Tinkler's Buildev, $137,000 from the Gazal family's Gazcorp and $183,000 from the notorious Obeid-linked Australian Water Holdings (AWH).

One MP, upper house MP Marie Ficarra, who is said to have known about EightByFive, stepped down from the parliamentary Liberal Party on Monday at the premier's request.

She follows MPs Darren Webber, Chris Spence and Mr Hartcher.

Mr Spence and Mr Webber ran as Liberal candidates on the central coast in 2011 and are said to have pocketed $105,000 and $50,000 apiece from EightByFive.

Another Liberal-linked outfit, the Free Enterprise Foundation, was allegedly used by some members of the Liberal Party to "wash" money from prohibited donors.

"The actions of these persons were a serious breach of the law and a serious breach of trust with the voters of NSW," Mr Watson said.

In the lead-up to the 2011 election the Foundation donated $700,000 to the Liberal Party, he said.

Fundraiser Paul Nicolaou admitted in a private ICAC interrogation that he was aware of multiple examples of prohibited donors giving money to the Liberal Party via the Foundation.

On Monday Mr Nicolaou resigned as chair of a key fundraising entity, the Millennium Foundation, and the premier has signalled some donations may now be repaid.

"I have told the party's new state director, as a matter of urgency, to investigate the allegations made at ICAC and respond to them promptly," Mr Baird said.

Meanwhile, two sitting ministers are now under scrutiny.

Energy Minister Anthony Roberts was forced to issue a statement on Monday afternoon after it emerged he had accompanied Mr Hartcher on a 2007 trip to Queensland's Whitsundays aboard Nabil Gazal's luxury yacht, Octavia.

"I paid my own airfares and costs associated with my attendance," Mr Roberts said.

"For these reasons, I understood at the time that I did not need to make a disclosure on my pecuniary interests register ... I held no shadow portfolio responsibilities at the time."

The inquiry continues on Tuesday.

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WA Brothers could abuse with impunity

The royal commission will continue in Perth, and will focus on Christian Brothers-run residences. Source: AAP

CHILD abusers at Christian Brothers schools in Western Australia knew they could sexually torture children with impunity, safe in the knowledge the state would do nothing, a royal commission has heard.

The Royal Commission into Institutional Responses to Child Sexual Abuse has heard boys were routinely tortured, raped and beaten by Christian Brothers in four childcare institutions since the 1950s.

The two-week Perth inquiry is investigating the responses of the Christian Brothers and state authorities to the abuse allegations at the Bindoon, Castledare, Clontarf and Tardun residences for boys who were orphaned or forcibly removed from their parents from the UK, Malta and Australia.

In emotional testimony on Monday, John Hennessey told the commission the men who abused him during his time at St Joseph's Farm and Trade School, Bindoon, felt safe in doing so.

"I was exploited and abused by criminals (who were) safe in the knowledge that the state government and church were my legal guardians, and would never bother to meet their responsibilities," he said.

Mr Hennessey was forcibly separated from his mother in Bristol, England, and sent to WA. He did not see her for another 57 years.

While at Bindoon Mr Hennessey was targeted by Brother Paul Keaney, other Christian Brothers and older children at the school.

On one occasion, Brother Keaney publicly stripped and savagely beat him.

"No one came to my aid," said a visibly upset Mr Hennessey, the first witness at the 11th case study examined by the commission. "I am now left with a stutter."

Boys who reported sexual and physical abuse were often abused by the brother to whom they complained, the royal commission was told.

"For some boys, the knowledge of the abuse was well enough understood between the boys, if not necessarily openly discussed," counsel assisting the royal Commission Gail Furness said in her opening statement.

"Other boys never shared their experiences with anyone else.

"However, common to all of those men who will give evidence is the shame, guilt and fear that they experienced as a result of the abuse."

At St Vincent's Orphanage in Clontarf, boys would be selected almost nightly by brothers for abuse, said survivor John Wells.

A brother would tickle the foot of a sleeping boy as a signal to go to his room.

"The boy would often be crying because he knew what was coming and he knew he was going to be in pain," Mr Wells said.

He and his twin brother Arthur were so traumatised they did not physically touch for 70 years - until Mr Wells held Arthur's hand when he was on his deathbed.

Another survivor of Bindoon, Edward Delaney, had the fingers of both hands broken and was left with a permanent disfigurement when a brother - named as Brother Doyle in the commission - hit him repeatedly with a leather strap with a hacksaw blade stitched into it.

Over the next two weeks the commission will hear evidence on how the Christian Brothers responded to allegations of abuse.

It will also hear evidence from representatives of the WA government and the acting director of public prosecutions about the department's response to complaints.

So far, four WA Christian Brothers have been charged with sexual abuse at one or more of the institutions.

One, named at the commission as Brother Dick, was convicted in 1994 on 10 counts of unlawfully and indecently dealing with five boys under 14. He received three-and-a-half years jail.

Another - Brother William Marchant - was charged in 2000 with sexual abuse offences while at Tardun. He was convicted and received a non-custodial sentence.

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Aussie flies home after Bali hijack drama

An Australian detained over a Bali flight hijack scare has been released without charge. Source: AAP

AN Australian man who caused a hijacking scare has left Bali, but faces further police questioning when he arrives in Brisbane.

Matt Christopher Lockley, 28, was arrested on arrival in Bali three days ago.

The Queensland plumber says he had a panic attack aboard his Virgin Australia flight on Friday and mistook the plane's cockpit door for the toilet door.

His banging on the door caused the pilots to trigger an "unlawful interference" alert that put the Indonesian air force and police on notice for a hijacker on arrival.

After spending one day in hospital and another assisting police, he was released without charge late on Sunday.

Mr Lockley didn't answer reporters' questions, saying only that Indonesian authorities had been very helpful.

"I made an accident by knocking on the cockpit door," he said.

"I want to say thank you to the Indonesian police and authorities.

"They only followed procedures and they have provided me with a lot of care and support and I'm grateful for everything they've done."

It was thought Mr Lockley was drunk when he caused the scare on Friday and others described him as aggressive and paranoid.

He denies being drunk, telling police he had consumed only Panadol, Voltaren and Coca Cola before the flight.

Mr Lockley flew home on a Virgin Australia flight on Monday afternoon and didn't comment to reporters at the airport.

He shook hands and thanked immigration and consular staff who were there to ensure he boarded flight VA44.

On arrival at Brisbane airport on Monday night, he will be met by Australian Federal Police (AFP) officers investigating what, if any, offences may have occurred on the flight.

"Following evaluation of available evidence, the AFP will be in a position to determine what further action may be taken," a spokesman said.

Indonesian police say Mr Lockley came to Bali looking for his Indonesian wife, whom he hasn't seen in weeks.

They allowed him to rest in hospital following his arrest, describing his state as confused and exhausted. He was visited by friends and Australian consular staff.

Indonesian officials say they are still looking into the circumstances surrounding the sending of the hijack signal and how it was responded to.

Virgin Australia says international protocols require the crew to send an "unlawful interference code" when someone tries to enter the cockpit unlawfully.

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Tornadoes kill at least 17 in US

Officials say a tornado has killed at least two people and destroyed buildings in Oklahoma. Source: AAP

POWERFUL tornadoes have killed at least 17 people as they flipped cars, ripped up homes and uprooted trees across the south-central United States, emergency officials have reported.

"It's chaos right now," the mayor of the Arkansas town of Velonia, James Firestone, told CNN late on Sunday emergency crews used searchlights to comb through the debris in some of the hardest-hit areas.

The central part of the town of 4000 "seems like it's completely levelled. There's a few buildings partially standing, gas lines spewing. Fire lines down. We've had some casualties."

The twisters tore through the region on Sunday and continued overnight into Monday. They are forecast to threaten much of the region throughout Tuesday.

Firestone said that police and firefighters from nearby cities as well as National Guard troops were heading to Velonia.

Twisters also devastated large sections of the town of Mayflower, population 2300, just northwest of the Arkansas state capital Little Rock.

Pictures of tornado damage posted by Arkansas TV station THV 11 showed smashed cars, homes ripped in half and whole residential blocks reduced to rubble.

Officials said that parts of Interstate 40, a major east-west highway across the United States, was closed due to debris and overturned vehicles in the Mayflower area.

Two regional utility companies, Entergy and First Electric Cooperative, said that more than 15,000 customers were in the dark.

"It's been a truly awful night for many families, neighbourhoods and communities but Arkansans always step up to help each other recover," Arkansas Governor Mike Beebe wrote on Twitter.

The full impact of the storm and its toll will likely not be known until after sunrise.

In Oklahoma, a powerful twister struck the town of Quapaw.

"There have been numerous homes and buildings damaged and some destroyed," Keli Cain of the Oklahoma Emergency Management Agency told AFP.

She cited local emergency officials as saying that a fire station was destroyed and there was damage to the northern part of the town.

Dozens of homes were also reported destroyed in nearby Kansas, though state officials have reported no fatalities.

The National Weather Service warned of a severe weather threat across the central and southern United States over the next days.

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Palmer trying to buy govt in NT: Giles

Federal MP Clive Palmer has induced three rebel Northern Territory MPs to join his political party. Source: AAP

CLIVE Palmer has been accused of buying his way into Northern Territory politics after three indigenous MPs joined his party a month after walking out on the Giles government.

The Palmer United Party (PUP) founder declared that Alison Anderson would be chief minister after the next territory election, after announcing that she, Larissa Lee and Francis Xavier Kurrupuwu were now part of the Palmer party.

The three MPs quit the ruling Country Liberal Party (CLP) in early April after a rift between Ms Anderson and Chief Minister Adam Giles, saying they wanted to create their own regional political party.

On Sunday they revealed they had joined the Palmer United fold, with Ms Anderson to be the party's leader in the territory.

"We approached Clive Palmer because we believed that we could achieve better things for all Territorians with the Palmer United Party," Ms Anderson said in a statement.

"I met with Mr Palmer (on Saturday night) and in consultation we decided to join the Palmer United Party.

"We were not offered any inducements to join, we did so because we strongly believe it is the best way forward to give the people of the Northern Territory the future they deserve."

Mr Palmer said his party was in discussions with other territory parliamentarians, and expected them to join the PUP in the next few weeks.

"I think she'll (Ms Anderson) be the chief minister after the next election," Mr Palmer told ABC TV.

"That government is falling apart, it's not really got a good future."

But Mr Giles said the multi-billionaire miner was trying to "buy government" in the NT, and he was not concerned that other members of the CLP could join Mr Palmer's party.

"Clive can try and throw his money around as much as he wants but I can tell you the members of the CLP, the Country Liberals, are not for sale, the Northern Territory's not for sale," he told Sky News.

"And we won't stand ... for any of these bullyboy tactics by some rich bloke from the Gold Coast."

Queensland Premier Campbell Newman joined in the criticism of Mr Palmer, saying questions needed to be asked about what cash, jobs and financial support he had offered the three MPs.

Ms Anderson defended her defection, describing the PUP as "the new force in Australian politics".

Asked what was in Mr Palmer's deal for the three NT MPs, she said: "I think it gives us comfort, it gives us stability, it gives us a home".

"He's welcomed us, and said that 'you can come on board' with his party, and we're happy to do that," she told ABC TV.

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Vic Premier to ask feds for help at COAG

MAJOR infrastructure funding and a greater share of GST revenue are Premier Denis Napthine's targets for the next Council of Australian Government (COAG) meeting in Canberra on Friday.

Dr Napthine said Victoria needs more support from the federal government.

"I will certainly be raising with the federal government the need for key infrastructure funding for Victoria that is improving transport efficiency, improving business productivity and delivering jobs for Victoria," he said.

"I will also be putting the case for Victoria to get a fairer share of the GST.

"We are being dudded under the current GST arrangements.

Last week, Victorian Treasurer Michael O'Brien blamed a cut in the state's GST revenue from 90 cents in the dollar to 88 cents in 2014-15 for a $32 hike in car registrations and an increase in vehicle stamp duty.

The extra charges would be used to fund major transport infrastructure in the May 6 state budget, he said.

Dr Napthine said he would also raise a recycling initiative at the COAG meeting.

"I will also be raising one of my pet topics, and that is the need for a national container deposit legislation approach."

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We'll be fair in tough May budget: Abbott

PM Tony Abbott has refused to comment on reports his government may soon introduce a debt levy. Source: AAP

TONY Abbott has promised to be fair and equitable when meting out some of the tougher measures in the May budget.

However, the prime minister has refused to comment on reports he is considering a debt levy to tackle the deficit.

Mr Abbott said the government wouldn't "squib the challenge" of fixing the budget, when asked if the coalition would soon introduce what Labor has dubbed a "deceit tax".

Based on the Queensland flood levy, News Corporation on Sunday said a "one off" impost on high income earners would be a feature of Treasurer Joe Hockey's May budget.

Mr Abbott repeated his well-worn mantra that he would not rule anything in or out of the May 13 budget when asked about the latest speculation.

But he said the coalition had committed to fixing the "fiscal disaster" left by the Labor government.

"Now we are going to do it in ways which are faithful to the commitments that we made to the Australian people," the prime minister said on Sunday.

"We will do it in ways which are fair, which are equitable, and which I believe will be seen to be fair by the Australian people."

Labor says the levy would breach a pre-election pledge not to impose new taxes on the Australian public.

"Make no mistake, this will be the biggest broken promise of all," shadow treasurer Chris Bowen said.

"Tony Abbott told the Australian people he would cut taxes and he specifically said he would introduce no new taxes."

Mr Bowen accused Mr Hockey of creating a "conflated budget emergency".

"But that doesn't justify a tax on Australian families who would pay the cost for this breach of promise from Tony Abbott," he said.

But Mr Abbott said the government would keep its election commitments.

"A very important commitment was to get the budget back on track to a sustainable surplus, but we will do that in ways which keep faith with our commitments to the Australian people in the election campaign," he said.

The levy is the latest unpopular measure mooted to be in Mr Hockey's first budget.

Since the beginning of the year the government has been forced to fend off concerns it may introduce a GP co-payment.

Last week the treasurer said an increase in the pension age was an "inevitability", but stopped short of confirming the budget will lift it to 70.

Clive Palmer on Sunday said he wouldn't support lifting the pension age, when the Palmer United Party along with other crossbenchers hold the balance of power in the Senate.

"I just couldn't employ Joe Hockey or Tony Abbott at 69, no matter how competent they are," Mr Palmer told ABC Television.

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Search zone for MH370 broadened

The search zone for MH370 has been expanded after an underwater drone found nothing of interest. Source: AAP

THE search area for the missing Malaysia Airlines flight has been expanded after the Bluefin-21 underwater drone found no trace of the passenger jet.

The automated underwater vehicle (AUV) has completed sidescan sonar work in a narrowed-down circular zone 10km in radius, 1584km north west of Perth, which centred on an acoustic ping detected on April 8.

Other man-made acoustic signals were picked up in the vicinity on April 5.

Now on its 15th mission, the Bluefin-21 is combing adjacent areas, the Joint Agency Co-ordination Centre said in a statement on Sunday.

Due to deteriorating weather conditions, the air and surface search for floating debris has been suspended for the day.

On Friday, the AUV was forced to resurface after a software issue that required re-setting.

Last week, Malaysia's Acting Transport Minister Hishammuddin Hussein said more sophisticated and expensive technology would be needed if the Bluefin-21 came up with nothing.

The next phase of the search would require probably submersibles that would be very, very expensive and probably more Bluefin-21s, he said. MH370 vanished en route from Kuala Lumpur to Beijing on March 8 with 239 people on board.

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No tsunami risk from Tongan quake

A 6.3-MAGNITUDE earthquake has struck off the coast of the Pacific Island nation of Tonga but experts say there is no threat of a tsunami.

The quake reportedly struck in waters northeast of the Tongan capital, Nuku'alofa, at about 7pm local time (1600 AEST) on Saturday.

Geoscience Australia reports the impact could have been felt by people more than 600-kilometres away.

Seismologist Marco Maldoni said residents of the island nation would definitely felt shaking after the movement of tectonic plates and that that part of the world was prone to earthquakes.

"That earthquake itself happened where the Australian plate meets the Pacific plate," Dr Maldoni told AAP on Saturday.

"Thankfully this is a non-tsunamigenic earthquake - something that can potentially generate a tsunami."

Dr Maldoni said that in the past five years there had been about 200 earthquakes within that area, with another one occurring near Tonga at a magnitude of 6.2 as recently as Friday.

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Hard line on boats paying off: Morrison

Immigration Minister Scott Morrison says the government's tough stance on asylum seekers is working. Source: AAP

NO people-smuggling venture had succeeded in landing asylum seekers on Australia for more than four months, the government says.

In the latest update on Operation Sovereign Borders, Immigration Minister Scott Morrison said on Saturday that vigorous border protection activities was deterring illegal boat arrivals, even into the post-monsoon period when weather conditions usually improve.

Mr Morrison said the practice of turning back unauthorised boats remained in effect.

"Anyone seeking to enter Australia illegally by boat will be faced with the same policies those who previously attempted illegal entry met," he said in a statement.

Mr Morrison said no one had reached Australia since December 19 and that continued this month. But 3351 on 47 boats arrived in April 2013 under the former Labor government.

The latest Operation Sovereign Borders operational update says there are now 1281 in the processing centre on Manus Island and 1177 on Nauru, making a total of 2458.

Another 1405 remain on Christmas Island. During the last week, eight asylum seekers were transferred to Nauru.

Seven unauthorised maritime arrival transferees were voluntarily returned to Iran.

Since Operation Sovereign Borders started on September 18, 220 asylum seekers have voluntarily returned to their home countries.

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