Editorial: Cash stack claims probed

THE Andrews Government has been rocked by further allegations of electoral funds rorting — and this time, the accusation is outright theft.

Victorian Ombudsman Deborah Glass. Picture: David Caird

THE Andrews Government has been rocked by further allegations of electoral funds rorting — and this time, the accusation is outright theft.

A full-blown criminal investigation must be immediately launched into these serious claims.

While parliament has already begun an inquiry through Upper House president Bruce Atkinson, it is likely the matter will also be referred to Victoria Police.

Victorian Ombudsman Deborah Glass, who is probing separate allegations of Labor’s misuse of electoral funds in the lead-up to the 2014 state election, should also conduct an investigation as an independent officer of the Victorian parliament.

The Independent Broad-based Anti-corruption Commission, which has the power to investigate corruption by members of parliament and staffers, must also be called in.

Such is the seriousness of the allegations revealed in yesterday’s Herald Sun — which were raised not by Liberal opponents but by three whistleblowers from within Labor’s own ranks — that swift and comprehensive answers are demanded.

What is alleged constitutes the wholesale theft of hundreds of thousands of dollars in taxpayer funds over a number of years by several state Labor electorate offices.

The defrauded money was used to pay for ALP memberships in four federal seats and involved a number of printing firms, the whistleblowers claim. In one MP’s office, it is ­alleged up to $30,000 a year was being siphoned.

Opposition Leader Matthew Guy asked Premier Daniel Andrews in state parliament yesterday if he had used the firm F & M printing which has carried out work for the office of Labor’s deputy president of the Legislative Council, Khalil Eideh, the MP for Western Metropolitan.

Mr Guy also asked the Premier in parliament whether “F & M Printing, a backyard business located in Keilor East, has been used by your Labor MPs to fraudulently produce invoices for printing they haven’t done in order to siphon off taxpayer money to pay for Labor Party memberships?”

Mr Andrews said he “has no knowledge” of the business and was not in a position to comment on any of the allegations.

At the centre of the accusations is a scam which used phony invoices for brochures and other promotional material to claim funds from parliament for electoral office reimbursements. But, other than a token number of materials being printed, a cut of 3 to 10 per cent of invoiced cost was allegedly retained by the printer for work not done and the remainder of the parliamentary funds paid for ghost memberships at Labor branches. It is alleged the costs for more than 120,000 prints from one electorate office alone since 2014 were part of the wider fraud which was estimated at costing taxpayers several hundred thousand dollars.

The claim that defrauded money was then used for the grubby purposes of branch stacking within the Labor Party adds salt to the wound.

It’s a scandal which threatens to further undermine public confidence in the political process — if indeed it could sink lower.

While the “lobster with a mobster” saga which hit Mr Guy last month was embarrassing — and the Opposition Leader should have left the restaurant as soon as he realised who was there — ultimately, it was an error of judgment.

The current scandal Labor confronts is far more serious and amounts to deliberate, premeditated, orchestrated fraud against the taxpayer.

This is now the second investigation into Labor’s rorting of the electoral funding process.

The Ombudsman, despite Labor’s obfuscation and failed court appeals, has for two years investigated the so-called red shirt brigade rorting of electoral funds for campaign purposes. The dodgy redirection of hundreds of thousands of dollars from electoral allowances to campaign staff and resources in 2014 occurred, as a matter of fact and not supposition.

Again, when the Herald Sun lifted the lid on that saga, the manipulation of public funds by Labor in the lead-up to the election was raised not by the Liberals or political foes, but by Labor members disgusted at the hijacking of funds by their own party.

In the end, whether that amounted to an offence may come down to legislative interpretation, and if that is the case, then laws need to be tightened.

However, there is no room for interpretation in the current allegations. When questioned by the Herald Sun this week, several Labor MPs told this newspaper if the fraud had occurred, any colleagues or party members complicit should go to jail.

There are two aspects to the allegations and both are insidious:

1. The theft of money and defrauding of parliament using fictitious printing invoices to claim thousands of dollars in electoral expenses.

2. The use of those stolen funds to pay memberships for ghost members and stack branches to control factional preselections in those seats and influence wider party policy.

ALP rules forbid members ­paying for any membership ­except their own and that of immediate family.

But for years, branch stacking has tarnished the party and almost 300 ghost members were purged in 2015 for breaches. When you add public theft to the latest allegations, suddenly it’s much more than simply cooking the books on membership.