Coalition war chest topped up by Cormack Foundation

Scott Morrison has been secretly handed a $500,000 election campaign-eve gift from the Cormack Foundation.

Scott Morrison at Shellharbour Hospital yesterday. Picture: AAP

Scott Morrison has been secretly handed a $500,000 campaign gift from the Cormack Foundation but the Victorian Liberal Party faces a $1.8 million annual hit to its ­finances.

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The Prime Minister met with the foundation before the federal election campaign began and has been delivered the extra $500,000, but the Victorian party is bracing to miss out on its annual $1.8m Cormack allocation to run its party headquarters.

Senior Victorian Liberals are accusing the foundation of using “weasel words” when negotiating a peace deal last year that resolved a long-running battle between the two entities.

The belief among the party leadership was that the $75m Cormack Foundation would resort back to regularly funding its Victorian operations, with $900,000 expected in the first quarter and $900,000 expected in the September quarter.

But the foundation has put the Victorian Liberal Party on notice that after the current cycle of election donations, it will revert to growing the Cormack fund rather than handing out cash to help run the organisation.

Senior figures are concerned the failure to provide the $1.8m will undermine the party’s campaign funding and future operations.

A senior Liberal said negotiations “in good faith” with Cormack last year had soured. “In good faith we thought that’s what would happen,” a senior Liberal said of the $1.8m. “Then they say: ‘Oh no, we’ve got to rebuild the corpus’.”

A Cormack spokesman said the foundation was satisfied that it had complied fully with the terms of the $8.5m peace deal struck between it and the party’s former leadership last November.

“We are not prepared to speak publicly on whether the federal party got more or less. There is no issue whatsoever with Cormack and the federal party,” he said.

The Australian understands the $1.8m annual support for the party’s Victorian administration was excluded from the deal due to the windfall sale of the party’s headquarters — reported to be up to $40m — and more generous public election funding arrangements in Victoria from 2022.

The Cormack deal was to provide $8.5m over three elections — $3m for this federal election, $3m for the next and $2.5m for the last Victorian campaign.

After the Morrison bonus, Cormack will have provided $3.5m for this federal campaign and $2.5m for the last state campaign, putting it ahead of schedule for its original commitments.

Victorian Liberal president Robert Clark did not respond to The Australian, nor did Mr Morrison. But The Australian understands the battle between Cormack and the party had taken a significant toll on the Victorian headquarters’ operations.

Key staff have had to be sacked after the party and Cormack were locked in a long-running legal battle over who owned the corpus — Latin for body — of money that is the foundation.

The legal battle cost the party and Cormack several million dollars each, with former prime minister John Howard and former federal minister Richard Alston becoming party nominees to the eight-member foundation board.

Under last year’s deal, they agreed there would be no further litigation, an expert body would review the state of governance reform within the Victorian party, and millions of dollars would flow to federal and state campaigns.

The groups agreed to more ­engagement and that Cormack would not donate to other political parties while the Liberals were the dominant conservative party.

But Cormack would donate to other libertarian causes, such as the Institute of Public Affairs.