BLACKMAIL ALLEGED

Hawera Star, Volume XLVII, 18 May 1928, Page 5

BLACKMAIL ALLEGED

PAYMENT FOR CONTRACT.

SYDNEY CIVIC AFFAIRS. MORE REVELATIONS. /nw'TKD PRESS ASSOCIATION—BY ELECTRIC TELEGRAPH—COPYRIGHT.) (AUSTRALIAN PRESS ASSOCIATION.) SYDNEY, May 16. The Royal Commission which is investigating the affairs of the late Sydney City Council resumed its sittings to-dav. ' Mr. A. B. Shand appeared as counsel for the Crown solicitor, and Mr. AV. A. Holman for the deputy-gen-eial manager of the city electrical department.

The commission continued its investigation of the circumstances surrounding the letting of a contract to Babcock and Wilcox, Limited, of London, for a steam-raising plant for the Sydney power-house. At JMonday’s sitting evidence was given that Mr. Maling had notified Mr. Arnott, Sydney manager for Babcock and AVilcox, that in consideration for the acceptance of the firm’s tender certain aldermen required £IO,OOO, of which £BOOO was to go to them and £2OOO to Mr. Maling. A further £6OO would be requircd for expenses if the money were, sc-nt from London.

Miss Gordon gave evidence that she v/as employed as a housekeeper, but as she was very friendly with Albert she frequently met him and transacted business for him. She also Knew Buckle, but never discussed or mentioned Mr. Maling’s money to him and never had a suspicion or curiosity about it. She had two bank accounts of her own, but did not know whether Albert ever opened an account in her name, and did not know if he ever used her account.

“FOR THE GANG AND MYSELF.”

Arthur Arnott, attorney and general manager in Australia for Babcock and Wilcox, gave evidence that his firm’s tender for the power-house contract wa3 prepared in London and copied in Australia. One day he went to tnc Town Hall to see if there was any good news, and an alderman told him it was all right; his tender was the lowest. Later, in response to a telephone message, he went to see Mr. Maling as the tender was complicated and there were questions to answer. Mr. Maling, after discussing the tender, said lie wanted £7500 to give his firm the contract, adding: “I am sorry I have got to do this, but I have got to find £SOOO for the gang and I want £2500 for myself.”

AVitness said he tried to have the reduced, but Mr. Maling replied: “Those are my instructions; I cannot help it.” Witness neither accepted nor rejected the proposal. The next thing that happened was that witness received a telephone message from Alderman Holdsworth who wanted to see him. lie went to Aiderman Holdsworth’s place of business and the latter said he was prepared to advocate acceptance of the tender by the council if witness gave him £IOOO. Again witness neither accepted nor rejected the proposal, realising that after what Mr. Maling had said about the gang it might be useless to refuse. At another interview at Mr. Mai ing’s home Mr. Maling had said there had been a meeting of certain aldermen and it had been decided that unless witness agreed to pay £IO,OOO the contract would be let to another drip, namely, International -Combustions, Limited, which deposited £15,000 with ai independent party to be paid ,to the aldermen if they gat the contract. After further discussion witness said, “T soo I must recommend my firm to pay your blackmail,” and the introview ended. Before leaving he told Mr. Maling about Alderman Holdsworth’s demand, Mr. Maling had said: “Don’t pay him; he is one of the gang and will get his £IOOO with the others.” A little later witness was notified that his firm’s tender had been accepted.

‘ 1 'RUNNING' .FRIGHTFUL RISK.”

After witness was advised of the aeeoptanee of the tender he had a short interview with Alderman Holdsworth and told 'Mr. Alaling, who expressed the opinion that Alderman Holdsworth was hunting with the gang and also hunting for himself. Witness informed Mr. Maling that he did not wish to have anything to do with the payment and that if he would nominate somebody in Sydney who would receive the money, witness would communicate with the managing director and tell him where to send the money. He was told at a later stage that Frank ißueklc would receive the money.'

Witness had said to Mr. Maling: ‘“You are running a frightful risk and will get into trouble over this.” Mr. Maling then asked for an additional £OOO to cover expenses, and this was agreed to.

Tn reply to a question by Mr. Shand, witness said he wrote privately to Sir .Tames Kennall, the firm’s managing director - in London, who had since died, stating in his letter that, the tender was a very difficult affair and witness did not want to have anything to do with it, adding that he would rather have .Sir James Kennall come out and witness resign, and that it would be better for the firm not to get the job under the existing circumstances. Sir James Kennall had replied that he could not come out and if Arnott was satisfied the firm’s tender was satisfactory in every way and that they were not bribing anyone to pay any blackmail necessary. Witness wrote again to Sir James Kennall, telling him that as he had Sir James’ authority to pay blackmail he had agreed to pay £IO,OOO and asked him to send it with an additional £OOO for expenses to Frank .Ruckle at a cer rain bank in Svdney.