Ministers back IBAC review of Labor’s alleged $200K ‘cash for stacks’ rort

LATEST: Senior state ministers are backing a probe by corruption-busters into allegations of an elaborate printing rort which have rocked the Labor Party.

Opposition Leader Bill has said he knew ‘absolutely nothing’ about the printing saga. Picture: Kym Smith

SENIOR state ministers are backing a probe by corruption-busters into allegations of an elaborate printing rort which have rocked the Labor Party.

Deputy Premier James Merlino and Roads Minister Luke Donnellan say they back the Independent Broad-based Anti-corruption Commission being brought in.

Presiding officers released a statement on Thursday afternoon saying the parliament began an initial review of allegations about the misuse of taxpayer-funded allowances, but that its powers did not allow it to go beyond searching parliamentary records.

However, Speaker Colin Brooks and Legislative Council president Bruce Atkinson said that work had shown reasonable grounds to send the matter to integrity authorities.

“We are advised the review of invoices approved under delegation from one member of parliament gives rise to a notification pursuant to section 57 of the Independent Broad-based Anti-corruption Commission Act 2011,” they say in the statement.

“The department was unable to determine if the allegations in the media, and subsequent questions in the House, have substance as its powers of investigation do not extend beyond the ability to examine Parliament records,” it says.

Khalil Eideh’s office manager Robert Mammarella leaves F&M Printing. Picture: Nicole Garmston

The F&M Printing business in Keilor East, Victoria.

The section of the Act referred to says that: “The relevant principal officer may notify the IBAC of any matter that the person believes on reasonable grounds constitutes corrupt conduct”.

It comes after invoices worth more than $200,000 were analysed as part of a Victorian parliamentary inquiry into the Cash For Stacks scandal.

The dramatic escalation comes after the Herald Sun last night revealed federal Labor MPs, including Opposition Leader Bill Shorten and factional heavyweight Kim Carr, had used a firm at the centre of alleged rorting.

Both MPs say their dealings with the company have been aboveboard.

But senior ALP figures fear the saga will damage Mr Shorten and Premier Daniel Andrews if it runs into next year, with a state election due.

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Senator Kim Carr. Picture: AAP

The parliamentary probe was prompted by claims from Labor whistleblowers, as revealed by the Herald Sun last week, that hundreds of thousands of taxpayer dollars had been siphoned from politicians’ printing budgets over several years to pay for ALP memberships.

Invoices were allegedly created for large orders of brochures or other material that were never fully printed.

Opposition Leader Bill has said he knew ‘absolutely nothing’ about the printing saga. Picture: Kym Smith

State parliament paid the money, which was returned to MPs in cash and allegedly used to pay for memberships.

Those included the federal seats of Gorton, Scullin, Maribyrnong and Calwell.

A business named in state parliament as central to the allegations, F & M Printing, has denied wrongdoing.

Mr Shorten was asked last week if he had been involved in the printing saga and said he knew “absolutely nothing about this situation”.

“Of course, it is very serious, and I would expect it to be fully investigated,” he said.

However, the Opposition Leader’s office has since searched records and established that his office had used F & M Printing at least three times — but not since 2011.

A spokesman for Senator Carr has also revealed the printer had “been used by the office” but did not say when or on how many occasions.

“On each and every occasion, the full quantity of printing was provided and we ensured the price quoted was fair and reasonable — as we wanted to ensure the printing budget was maximised,” he said.

The offices of Maria Vamvakinou, Gavin Marshall, Brendan O’Connor and Lisa Chesters said they had not used the services of F & M Printing. A spokeswoman for Ms Chesters said she used a local Bendigo printer.

How the alleged ‘cash for stacks’ scheme worked

■ State and federal electorate offices have taxpayer-funded printing budgets

■ A printing company creates an invoice for work it claims was done for an MP’s office

■ The invoices, which are accompanied by a few print samples, are then submitted to the parliament, which pays the printer

■ The printing job is never fully carried out, it is claimed

■ A cut of 3-10 per cent of the reimbursement, as well as the GST amount, is allegedly withheld by the printer

■ The rest of the money is sent back to the MP’s office in cash, according to claims

■ The money is allegedly used to pay for Labor Party memberships to use for branch stacking

Robert Mammarella has denied all wrongdoing. Picture: Nicole Garmston

Deputy president of the Legislative Council Khalil Eideh. Picture: AAP

Investigations by state parliament have concentrated on the office of Khalil Eideh, who is the deputy president of the Legislative Council, after he was named by Opposition Leader Matthew Guy.

Mr Eideh, who is a close ally of Senator Carr, has denied knowledge of a rort and has also backed his office manager, Robert Mammarella.

Auditors were at the office sifting through documents on Monday, and Mr Mammarella told the Herald Sun: “We’ve done nothing wrong.”

Asked directly whether he knew about an alleged rort that involved fake printing invoices that redirected parliamentary money to MPs’ offices, Mr Mammarella said: “Absolutely no knowledge.”

He said Mr Eideh and all other staff were also unaware.

“We certainly haven’t entered into any scams or anything like that,” Mr Mammarella said. “All I know is, yes, we used that printer.”

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Opposition Leader Matthew Guy said taxpayers were tired of Labor rorting scandals, following the second residential allowance that claimed the scalps of Speaker Telmo Languiller and deputy speaker Don Nardella.

He said Mr Eideh was the third Labor presiding officer to be swept up in a scandal.

“Australians have a dim view of politicians misusing taxpayer funds as their own personal purse, their own personal piggie bank,” Mr Guy said.

“I think Khalil Eideh owes Victorians an explanation as to what is happening in his office. This man is the deputy president.”

Deputy Premier James Merlino said “the investigation should run its course”.

“These are very serious allegations and as is appropriate, it’s being investigated by the presiding officers,” he said.

Mr Merlino backed Mr Eideh in his position as deputy speaker of the upper house despite the escalation, but he declined to comment on whether the government maintained confidence in him occupying the role.

The federal Employment Minister, Senator Michaelia Cash on Thursday hit out at Senator Carr and called on Mr Shorten to release printing invoices.

“Mr Shorten needs to explain his involvement with the latest cash-for-stacks scandal, where a printer used by Mr Shorten on a number of occasions has been accused of creating fake invoices, receiving payment from the taxpayer, and then funnelling that cash to pay for Labor Party memberships,” she told the Senate.

The Leader of the House of Representatives, Christopher Pyne, told parliament Mr Shorten sat on top of “the cesspit that is the Labor Party in Victoria”.

Victoria’s presiding officers are investigating the issue.

- With Monique Hore and Tom Minear