Marlene Kairouz staffer in tears during IBAC questioning

Marlene Kairouz, a former Labor MP at the centre of an anti-corruption probe, will not face a public hearing amid concerns for her welfare.

Former Andrews government minister Marlene Kairouz allegedly spent $60,000 over five years paying for other people’s Labor memberships, the state’s anti-corruption watchdog has heard.

It comes as it was revealed Ms Kairouz would not give public evidence to the Independent Broad-based Anti-corruption Commission

Counsel assisting IBAC, Chris Carr SC, on Wednesday said the body did not have the power to call Ms Kairouz publicly, despite days of questioning about the misuse of taxpayer resources in her office.

He said the commission has strict conditions on when it can hold public hearings and had received credible concerns for her welfare which mean they are forced to hold the process in private.

It is not yet clear whether transcripts of her evidence could be available.

On Wednesday afternoon, Ms Kairouz’s staffer Kirsten Psaila was grilled about forged signatures within Victorian Labor.

Premier Daniel Andrews with former minister Marlene Kairouz.

Labor members linked to branches run by Ms Kairouz and have told investigators their signatures had been forged, with one member from the 1970s never paying his fees.

Others were unaware that they were still enrolled.

The commission is probing how non-genuine members were used to ‘stack” local branches, control MPs and amass power all while using taxpayer staff and resources.

But Ms Psaila, who earlier in the day admitted to paying for memberships and filling out ballots, maintained she had never forged any signatures.

Mr Carr said the factional work done for Labor hopefuls in taxpayer roles was morally corrosive.

“What happens is by the time people get into power, the time they become MPs. If they’ve been exposed to this sort of conduct or if they’re engaged in supervising this conduct as MPs they’re unlikely to bring a strong moral compass to their parliamentary duties.”

Ms Psaila maintained Ms Kairouz was a good local member.

“That may be so, but she’s administered part of this corrosive and corruptive factional machinery, hasn’t she?” Mr Carr said.

“They all have,”she replied.

STAFFER IN TEARS OVER ‘SERIOUSLY WRONG CONDUCT’

Ms Psaila, an electorate officer for former Andrews government minister Marlene Kairouz and the late George Seitz, broke into tears during questioning from the Independent Broad-based Anti-corruption Commission on Wednesday.

Ms Psaila admitted she had assisted in helping renew memberships and in voting on behalf of members for internal Labor elections, but this was common across the entire party.

“My work was not solely factional work,” an emotional Ms Psaila said.

“I do a lot of work for the local community.

“I just feel like it is being doubted.”

Ms Psaila agreed it took an “enormous” amount of time and resources to co-ordinate these factional activities and that using taxpayer resources for this was “seriously wrong conduct”.

“But they all do it,” she said.

The commission heard how multiple staffers working for Ms Kairouz had spreadsheets detailing which members they had the responsibility for renewing and voting on behalf of for internal party matters.

In one document, Ms Psaila is shown to have checked off names as their ballots for the party’s 2018 national conference were mailed out to party headquarters.

They also listed who had received their vote, with Ms Psaila preferenced ahead of other factional allies in the ballot for a senior Labor position.

Mr Carr said she had started as a well-meaning member of the Labor Party who had joined to make the world a better place.

“I want to understand how your interest in the Australian Labor Party, which came from an idealistic origin, ended up being channelled into this quite unethical factional work,” he said.

IBAC heard these factional “captains” could come from different ethnic groups and that one of these was Kaushaliya Vaghela’s husband Dinesh Chauhan.

On Monday, IBAC was told Mr Chauhan sent just one work email in 2020 and that his own wife believed he was involved in factional work.

Every month Ms Kairouz’s office would get an update on new people moving into the electorate through Labor’s own internal database which access electoral roll information.

When questioned about Mr Chauhan, Ms Psaila maintained he was doing real work for Ms Kairouz, which included accessing this information.

“He was identifying the ethnicity of residents that have moved into the new electorate area because there’s a distinction between the Indian, Pakistani and the Nepalese (because) there was a bit of confusion there,” she said.

Staffers working for Ms Kairouz had spreadsheets detailing which members they had the responsibility for renewing and voting on behalf of.

IBAC earlier heard that Ms Kairouz allegedly spent as much as $18,300 a year paying for other people’s Labor Party memberships, the state’s anti-corruption watchdog has heard.

Ms Psaila agreed with lawyers assisting IBAC that Mr Seitz was a noted branch stacker and had “control” of up to 400 members in Melbourne’s northwest.

Ms Kairouz then “took over” these members in 2015 after his death and paid for them from her personal accounts.

“She would give me the cash,” Ms Psaila said.

“Maybe about $4000 or $5000 (a year) and you would get some of that back.”

But counsel assisting the commission, Chris Carr SC, revealed this figure went even higher and went to Ms Psaila around “renewal season” when memberships were due to expire.

“In 2015, Ms Kairouz transferred to you and you then withdrew in cash $14,700,” he said.

“All of that money was for memberships wasn’t it?

“In 2016, during renewal season from February 23 to May 5, it was $18,300.”

But a year later, just $1000 was transferred between the pair.

Ms Psaila said she believed this was because the applications were paid for by “team captains” who oversaw factional work and were responsible for different groups of members.

Among these were taxpayer-funded electorate officers who did this work during office hours.