The Victorian Liberal Party won’t be moving on from the defamation saga involving its former leader any time soon. The party officials who inked a $1.55m deal to save John Pesutto from bankruptcy after his mammoth defamation loss to Moira Deeming have unleashed a whole new chapter of dysfunction. By saving Pesutto, his shame in this matter has now been wholly acquired by the Victorian Liberals.
And Deeming may not have done herself any favours either. This has become, in the words of one senior Victorian Liberal who voted against the rescue package, a case of mutually assured destruction. The other losers, through no fault of their own, are the angry rank-and-file Liberal Party members who are funding Pesutto’s rescue package, along with disappointed Victorian voters, who still don’t have any sign of an alternative state government.
In his email to the party faithful, Victorian Liberal Party president Philip Davis said the administrative committee “resolves that Moira Deeming should be paid what she is owed”. Behind those 11 words is another story.
The Australian has been told by members of the Victorian Liberal Party administrative committee that the deal struck last Thursday was less about saving Pesutto, or even doing the right thing by Deeming. It was rammed through to protect former premier Jeff Kennett and others who potentially faced legal action for third-party costs if Pesutto went bankrupt and couldn’t pay what he owed Deeming.
That explains why Deeming received no apology from Pesutto last week. She was, after all, surely owed that, along with full payment of the legal costs incurred to defend her reputation. A scathing judgment found the former Liberal leader had made several highly defamatory comments about Deeming, including that she associated with neo-Nazis and was unfit to continue to be a member of the parliamentary Liberal Party. How could Pesutto, with a straight face, ask Liberal Party members to save himself and his family from financial ruin without offering Deeming an apology last week?
Easy. It was never canvassed at Thursday’s meeting, even though the administrative committee had the bargaining power to demand that much from Pesutto in return for the $1.55m loan.
Even more unlikely was an apology from the Liberals, including former Liberal premiers Kennett, Ted Baillieu and Denis Napthine, and senior Liberal MPs Georgie Crozier and David Southwick, all of whom were cited by Deeming as egging Pesutto on, aiding and assisting Pesutto in ploughing ahead, trying to defend the indefensible, and using tactics that compounded Deeming’s distress. Even though they surely owed Deeming an apology, too.
The Australian has been told by members of the administrative committee who voted against last Thursday’s rescue package for Pesutto that Deeming’s tactics had unwittingly backfired. She had gone too far when, through her lawyers, she tried to rope Kennett and Co into a possible third-party costs litigation to recoup costs if Pesutto could not stump up the money.
Though last Thursday’s bailout was presented as one to save Pesutto and to save the party from a by-election in his seat of Hawthorn (a certainty had he become a bankrupt), many members of the administrative committee were in no doubt about the unstated motive. “Phil Davis worked hard to force us across the line for one reason only, and that is to protect Kennett and co from litigation,” one administrative committee member said on Monday.
Deeming’s legal team had received a letter from the Victorian Liberal Party’s organisational wing informing it that the party was not liable for any costs arising from the defamation. That meant that if Deeming were successful in securing costs against Pesutto – let alone third-party costs against Kennett or others who helped Pesutto – those individuals would be personally liable.
Threatening to pursue Kennett and co – even if it was entirely reasonable for Deeming to do so – immediately launched this saga into a higher realm. Pesutto was no Liberal luminary. He had only been leader for a matter of months before he defamed Deeming. But once Kennett and co were in the line of fire, a rescue package for Pesutto was a done deal. Unwittingly, Deeming had transformed this debacle into one aimed at saving Kennett and co. It meant Deeming’s legal costs, funded by property developer Hilton Grugeon, would be paid even as she slammed the rescue package as “institutional abuse”.
Facing possible financial ruin, Pesutto entered last Thursday’s meeting with a beaming smile on his face. Did he know the rescue package was not, primarily, about saving him? After that meeting, Pesutto said he felt “humbled” by the decision to bail him out. It was the perfect choice of word. The dictionary definition of being humbled by something is “causing someone to feel less important or proud”. This bailout was about saving more important people than Pesutto. And it is not lost on those unhappy with last week’s rescue package that those people who funded and egged Pesutto on have walked away without a scratch.
In her letter dated June 8, in which she set out an offer to resolve the legal costs drama, Deeming demanded a public written apology from the Liberal Party, through current leader Brad Battin, for how she had been treated. That was not going to happen. She demanded that her preselection be endorsed by a special resolution. That was not going to happen either.
“Moira started out with a great deal of goodwill towards her, and that has now largely evaporated. She has miscalculated that all this antipathy towards Pesutto automatically translates to support for her. Well, it doesn’t, not now,” said one member of the administrative committee who voted against the rescue package for Pesutto. “She won’t get preselection,” the Liberal predicted.
The flip side of the mutually assured destruction equation is the way Pesutto’s rescue package was struck: it promises more dysfunction and disunity.
It was obvious the controversial bailout, opposed by at least seven people on the administrative committee, was stitched up in secret before the meeting began last Thursday evening. Committee members weren’t given much information. The Australian has been told they received a one-line item number on their agenda paper – “Proposal from the member for Hawthorn” – and a few pages explaining why section 18.8 of the constitution for the Victorian division of the Liberal Party allows for the loan to Pesutto.
No written motion, nor details about the 16 or 18 – or was it 20 – people who, according to Davis, had agreed to guarantee $900,000 of Pesutto’s $1.55m loan from the state Liberals’ investment arm, Vapold Pty Ltd. Could the committee call in the loan should a guarantor go bankrupt? Were the guarantors joint and several? In another oddity, committee members were told to vote on the deal by secret ballot.
The Victorian Liberals are nothing if not predictably dysfunctional. The same evening the administrative committee of the Victorian Liberal Party was saving Kennett (and others) from any potential litigation, the very same former premier was reportedly telling a private function that senior ranks of the state party need to be cleaned out and he wasn’t sure Battin is up to winning the next state election. How’s that for thanks. Even if Kennett is right about cleaning out some “seniors”, why stop at those currently in parliament?
More Coverage
Lattouf went rogue, but real blame lies with ABC management
The ABC is not the platform for political activism. Full stop. End of story. But what does this whole sorry Lattouf saga say about the public broadcaster’s management?
Middle East must draw on ‘partners in peace’ vision
I will never forget the day I stood with Yasser Arafat and Shimon Peres as they declared themselves ‘partners in peace’. It’s still possible, although more a hope then a likely event.