By Michelle Grattan and Misha Schubert
MALCOLM Turnbull has cast himself as victim of an outlandish sting by Treasury official Godwin Grech in the OzCar affair after an Auditor-General’s report exonerated Prime Minister Kevin Rudd and Treasurer Wayne Swan from giving special treatment to car dealer John Grant.
As he struggled to rescue his credibility and shore up his leadership, the Opposition Leader released an extraordinary email sent to him by Mr Grech — the official in charge of OzCar. ‘‘I am happy for you to start using my name in Parliament or in media interviews,’’ Mr Grech told him in the email, sent at 10.41pm on June 5.
Mr Grech also provided draft questions for the Opposition to ask the Government in Parliament and at a Senate estimates committee hearing.
Earlier, Mr Grech admitted in a statement to The Australian that on June 12 he had shown Mr Turnbull the now infamous fake email at the heart of the affair. ‘‘Although an error on my part, made under great pressure, I agreed to show [it]’’. .
He said in his statement it was a record of an email he recalled receiving from the Prime Minister’s office making representations for Mr Grant, a Queensland car dealer. He said he concocted it when he could not find the original.
Mr Turnbull said Mr Grech told him and Liberal frontbencher Eric Abetz it was the actual email. Mr Grech said at no stage did he authorise the reporting of the email.
Mr Turnbull called for Mr Rudd’s resignation after Mr Grech told a Senate committee he believed he saw an email from the PM’s office. The affair exploded in Mr Turnbull’s face after the discovery that the email, sent from Mr Grech’s Treasury computer and found in his home computer, was a fake.
In his email to ‘‘Malcolm’’, signed ‘‘Godwin’’, Mr Grech identified with the Opposition, saying: ‘‘Although we will be silly not to allow the [OzCar] bill through, a short committee inquiry could be useful.’’
‘‘I really do believe there is meat in this one. Swan is probably more exposed than Rudd,’’ the public servant wrote.
Mr Turnbull said when he and Senator Abetz met Mr Grech, at the official’s request, Mr Grech was an ‘‘enthusiastic witness’’. ‘‘We had no reason to doubt his word,’’ he said.
‘‘Quite frankly, whether he had shown us a copy of an email or not, if he said he had received an email from somebody, I would have accepted that at face value.’’
What had happened was ‘‘almost beyond belief’’.
‘‘Of all the unlikely things that happened, I cannot think of anything less likely than that a public servant … of Godwin Grech’s seniority and stature would actually sit down and forge an email on a Treasury computer and then show it to the Opposition,’’ he said.
Auditor-General Ian McPhee found that Mr Swan spoke briefly with Mr Grant, at the request of Labor backbencher Bernie Ripoll. ‘‘Treasury was aware that the dealer was acquainted with the Prime Minister, but there is no evidence that the Prime Minister was aware of the representation, or that the Treasurer or his office applied any pressure on Treasury to give this dealer more or better assistance than others,’’ he found.
While Mr Grant got a ‘‘moderate’’ level of attention, it was another car dealer known to be a Liberal donor who got extra attention from Mr Grech. Mr Grant did not get financial help.
Yesterday’s report was scathing about Mr Grech. It accused him of breaching confidentiality, having ‘‘inappropriate’’ communications with third parties and making inappropriate use of confidential information to assist outside parties, and giving preferential treatment to a dealer with Liberal connections.
There were ‘‘serious questions’’ about whether he had breached the public service code of conduct, it said.
Although the report clears Mr Rudd and Mr Swan, the Auditor-General criticises Treasury for failing to keep accurate records of its advocacy and failing to resource the OzCar establishment properly — which delayed the scheme so that dealers began seeking help from MPs and Treasury to secure private-sector finance.
In a strongly written personal defence included in the report, Mr Grech still insists he saw an email from an adviser to the PM, Andrew Charlton, making representations for Mr Grant.
He blames Treasury for not giving him enough resources to deal with OzCar and claims he briefed the PM on the circumstances of the Liberal car dealer. He also gives graphic detail of illnesses he was suffering, including untreated depression.
In his newspaper statement, he told how in a ‘‘serious error of judgement’’ he decided to create the false email.
‘‘Although the email was not an ‘original’, I thought it would help having a record in the form that it appeared.’’
Disputing suggestions that it was pressure from the Coalition that led Mr Grech to fake the email, Mr Turnbull insisted that the public servant had been the one driving the contact.
‘‘The suggestion that Mr Grech was pressured to make statements concerning Mr Grant was false,’’ he said.
Mr Turnbull expressed concern about Mr Grech’s health. He is in a psychiatric ward of the Canberra Hospital. But he ruefully admitted: ‘‘With the benefit of hindsight, one regrets ever having met Mr Grech.’’
Financial Services Minister Chris Bowen said Mr Turnbull had neither integrity nor credibility. ‘‘His position is untenable. He must resign — and if he won’t resign, the powerbrokers of the Liberal Party should require his resignation.’’
The Government says the contact between the Opposition and Mr Grech could be a breach of Senate privilege.