Australian state leader quits over $2,800 bottle of wine

NSW Premier Barry O'Farrell on March 3, 2014 in Sydney, Australia. Brendon Thorne/Getty Images

CANBERRA, Australia - The leader of Australia's most populous state quit as premier on Wednesday in the face of mounting evidence that he failed to declare a 3,000 Australian dollar ($2,800) bottle of wine that arrived as a gift on his Sydney doorstep.

New South Wales Premier Barry O'Farrell had told a corruption inquiry on Tuesday that he never received a bottle of 1959 Penfolds Grange Hermitage as a gift from businessman Nick Di Girolamo congratulating him weeks after his 2011 election win.

Grange is an iconic label and is synonymous with expensive Australian wine. Grange vintages are consistently rated among Australia's best shiraz, although 1959 was not an outstanding vintage.

O'Farrell, who described himself as "no wine aficionado," was supposed to add such a valuable gift to a public register aimed at deterring political donors from buying influence.

O'Farrell said he announced his resignation Wednesday because he was told that a thank-you note he wrote to Di Girolamo and his wife would be handed over to the Independent Commission Against Corruption, an agency that investigates allegations of official corruption.

"Dear Nick and Jodie," O'Farrell wrote in the note.

"We wanted to thank you for your kind note & the wonderful wine. 1959 was a good year, even if it is getting even further away!" the note read, referring to O'Farrell's birth year as well as the vintage.

"Thanks for all your support," O'Farrell wrote. He signed the note on behalf of his wife, "Kind Regards, Barry and Rosemary."

O'Farrell accepted that he had written the note, but maintained he could not recall receiving the wine.

He said he would officially resign at a meeting of his center-right Liberal Party lawmaker colleagues next week. The party will then elect a new premier from its ranks. O'Farrell, who lived in state housing as a child and developed a reputation as a politician with integrity above reproach, has not said whether he will quit state parliament.

"I've accepted that I have had a massive memory fail," O'Farrell told reporters. "I still can't explain either the arrival of a gift that I have no recollection of, or its absence, which I certainly still can't explain."

Later Wednesday, O'Farrell told the inquiry that he did not give any special treatment to Di Girolamo's company, Australian Water Holdings. The inquiry has been told that Di Girolamo, a Liberal Party fundraiser, had wanted to develop a AU$1 billion private-public partnership with O'Farrell's newly elected government, but that the government rejected the proposal.

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