Grassroot Libs warn chiefs over Pesutto bailout

Local Libs have launched a last-ditch bid to cut a financial lifeline for John Pesutto.

Moira Deeming at Parliament House in Melbourne. Picture: NewsWire / Andrew Henshaw

Victorian Liberal chiefs have been warned by grassroot branch members the party was a “donor exodus waiting to happen” if they authorised a $1.5m bailout for John Pesutto.

In a four-page letter to the administrative committee last week, a branch raised concerns that any financial lifeline for the former opposition leader would breach the party’s constitutional, financial, ethical and reputational responsibilities.

The letter, released by members on the condition the branch was not publicly identified, turns up the heat on the 19-member governing body ahead of Thursday’s critical meeting to vote on a rescue package.

“We (the branch) have spoken with prominent donors, including major contributors at the federal level, who have made it clear that support for Mr Pesutto’s legal bills would result in their immediate cessation of donations to the Victorian Division,” the letter stated.

“One major donor described the situation before the Party as a donor exodus waiting to happen.”

The administrative committee is expected to consider a proposal for the party’s investment vehicle, Vapold Pty Ltd, to lend Mr Pesutto $1.5m in addition to $760,000 he has collected to clear his court-ordered $2.3m legal debt to Liberal MP Moira Deeming over her successful defamation action against him.

The deal would save Mr Pesutto from bankruptcy and being forced from state parliament in a blow to the Liberal Party that would trigger a potentially damaging by-election in his seat of Hawthorn.

John Pesutto. Picture: David Crosling

The Australian understands that despite the opposition to the bailout, including a number of administrative committee members opposed to it, the Pesutto camp remains hopeful the bailout will be given the green light.

In its letter to the administrative committee, including president Phil Davis, the grassroots branch stated that its members wanted to “formally express serious concern and request urgent clarification regarding proposals that the Party fund, or otherwise financially support the legal liabilities incurred by Mr John Pesutto”.

“While the desire to avoid a by-election may appear pragmatic on its face, such reasoning must be balanced against the constitutional, financial, ethical, and reputational responsibilities of the Party,” the letter stated.

Moira Deeming and John Pesutto in a photo posted to social media on February 4, 2023. Picture: Facebook

“The question on hand is not merely political expediency, but one of precedent, propriety, and fiduciary duty. Mr Pesutto’s conduct was neither spontaneous nor accidental. It was deliberate, calculated, and made despite warnings.

“As has been widely reported, Mr Pesutto was advised not to pursue the matter in court. He chose otherwise and must, in our view, bear the consequences personally, as any private citizen would.”

Mrs Deeming successfully sued Mr Pesutto in the Federal Court over allegations he falsely portrayed her as a Nazi sympathiser after she helped organise and attended a Let Women Speak rally that was gatecrashed by neo-Nazis.