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Keneally retreats on power inquiry

Sean Nicholls STATE POLITICAL EDITOR January 1, 2011

KRISTINA KENEALLY has bowed to criticism of her repeated claim that an inquiry into the controversial $5.3 billion power sale is illegal and will try to expedite the legal advice her department is seeking from the Crown Solicitor.
Two days after declaring she ''cannot direct the Crown Solicitor [Ian Knight] as to when he will be providing the advice,'' the Premier suddenly reversed her position.
''I understand the Crown Solicitor is on leave until the 10th of January. However, we're seeking to see if we can get his advice any earlier than that,'' she told a news conference.
Ms Keneally had previously insisted she would have to wait for Mr Knight to return from leave, meaning his advice would be delivered within a week of the inquiry's starting date of January 17.
Since she prorogued, or shut, Parliament on December 22, the Premier has relied on advice that Mr Knight provided in 1994 to claim the inquiry was illegal because it was set up after the closure.
But the Herald revealed yesterday that on the day Ms Keneally first called the inquiry illegal, December 23, her department was so unsure of the claim that it wrote to Mr Knight seeking ''urgent advice''. Despite not having received that advice, Ms Keneally has continued to claim the inquiry is illegal.
She has said it cannot call witnesses and that they would not be covered by parliamentary privilege, potentially exposing them to legal action if they were to disclose information that is commercial-in-confidence.
But these are the matters about which the Department of Premier and Cabinet is seeking Mr Knight's advice.
The Premier's claim has prompted the Opposition Leader, Barry O'Farrell, to accuse her of trying to intimidate witnesses, who would include the eight directors of state-owned power companies who resigned in protest on the night of the sale. At the news conference yesterday, Ms Keneally said the department had asked for the updated advice on December 23 ''because journalists had further questions'' about her claim.
The parliamentary inquiry is set down for January 17 and 18 and to report by January 31, less than two months before the election on March 26.
Ms Keneally is under growing pressure, including from within her party, over the government's handling of the power sale, which the Treasurer, Eric Roozendaal, rushed through just before midnight on December 14.
At the last minute Mr Roozendaal was forced to appoint members of his own sales team to the boards of the state-owned power companies involved in the sale, Delta Electricity and Eraring Energy, after the directors resigned.
Ms Keneally is accused of proroguing Parliament two months early to try to dodge the inquiry, an accusation she strongly denies.
Mr O'Farrell said yesterday that Ms Keneally was ''running out of excuses'' for blocking the inquiry.
''Ms Keneally has an opportunity to stop trying to hide the truth, and she should finally admit today that the only alternative she now has is to allow the parliamentary power inquiry to do its job,'' he said.

http://www.smh.com.au/nsw/keneally-retreats-on-power-inquiry-20101231-19bzp.html