Former state treasurer mastermind behind Labor’s dirty laundry

THE chief architect of Labor’s $388,000 rort was hanging out his washing on Wednesday as Premier Daniel Andrews was holding a press conference to deal with his own dirty laundry.

THE chief architect of Labor’s $388,000 rort was hanging out his washing on Wednesday as Premier Daniel Andrews was holding a press conference to deal with his dirty laundry.

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The former state treasurer John Lenders, who was identified by Victorian Ombudsman Deborah Glass as the mastermind of the scam, declined to comment from his Carnegie home when asked if he accepted her findings that he had “crossed the line”.

Ms Glass details in her report how the now-retired politician concocted the pay scheme — in consultation with then-ALP state secretary Noah Carroll and the Labor Campaign Committee — which vastly boosted the party’s campaign war chest with taxpayer funds.

The revelations will put pressure on Mr Carroll, now national secretary of the ALP.

But Ms Glass says that Mr Lenders “carries the greatest share of culpability” in the scandal.

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Victorian Premier Daniel Andrews. Picture: AAP

In a devastating conclusion, Ms Glass states: “As a senior Member of Parliament, former minister and treasurer, and leader of the government in the Legislative Council, he should have known better.

“He sought advice from DPS (the Department of Parliamentary Services) but did not take it, yet his involvement and personal stature would have been instrumental in giving credibility to the scheme.

“There is undoubtedly a blurred line between permissible and impermissible uses of parliamentary funds, and what is or is not political or party activity prohibited by the Members’ Guide. In seeking to maximise the use of resources available to the party for the 2014 campaign, Mr Lenders crossed this line.”

Mr Lenders retired in 2014 from his Upper House seat, where he had been leader of the Opposition.

The Herald Sun revealed on Monday he resigned from his position as VicTrack chair on March 4, just weeks before the release of Ms Glass’s report.

The Ombudsman probe details how Mr Lenders:

DESIGNED a 60:40 pay split whereby the Victorian parliament paid for ALP campaigners two days a week;

USED his influence to convince more than 20 MPs to give up their staff budget to pay for ALP campaigners;

WAS twice warned not to hire Labor staff as casual electorate workers by parliament secretary Peter Lochert; and

TOLD ALP staff who had been hired to stay quiet about how they were paid.

Victorian Ombudsman Deborah Green. Picture: AAP

Mr Lenders told investigators the plan he proposed had been above board when designed but it later “morphed” into something else.

He claimed the original 60:40 split plan involved ALP campaign staff working three days a week for the party, and two days as electorate staff, carrying out office duties and paid for by the parliament.

But Ms Glass notes that one ALP employee who was hired recalled Mr Lenders saying: “Don’t tell anyone how you were paid. If anyone asks any questions, you are employed by the party full-time.”

Another reported: “Mr Lenders had told field organisers not to publicly discuss the arrangement because, while legal, ‘it’s not something that the public may have the same, you know, take on it’. In other words, ‘the public would not have a positive impression of, you know, the arrangement’.”

Mr Lenders’ claims to Ms Glass that the field organisers were hired to carry out two different jobs and were told so by himself and his staff member Jadon Mintern were also disputed by the staff, according to the report.

And on two separate occasions Mr Lenders approached Mr Lochert, and was told hiring party staff as casual office staff was risky.

He was also told pooling of staff that had occurred previously should not be expanded to include more casual staff.

John Lenders pictured at his home on Wednesday. Picture: David Crosling

“Evidence indicates that, in early 2014, Mr Lenders twice raised the possibility of expanding the existing ALP staff pool to include engaging casual electorate officers with DPS,” Ms Glass noted.

On both occasions, Mr Lochert told Mr Lenders that this was “not permitted”.

Despite being knocked back, Mr Lenders did not communicate this advice to the MPs involved.

Ahead of the Ombudsman’s findings released today, Mr Lenders quietly quit his $90,000-a-year public job with ­government-run rail company, VicTrack, citing family commitments.

Premier Daniel Andrews denied he was ordered to step down, saying: “I think Mr Lenders has indicated in his testimony, in is submissions to the Ombudsman that with the benefit of hindsight he would have done things differently.”

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