Labor link in Rudds' cut-price family home

KEVIN Rudd and his wife, Therese Rein, purchased their family home in Brisbane at a reduced price from two businessmen who were directors of a key Labor Party asset-controlling and fundraising company.

KEVIN Rudd and his wife, Therese Rein, purchased their family home in Brisbane at a reduced price from two businessmen who were directors of a key Labor Party asset-controlling and fundraising company.

The house, now worth about $1million, was bought by Mr Rudd and Ms Rein for $384,000 in late 1994, seven months after the former directors of the Labor company, Texberg, had bought it for $500,000.

Liberal Party figures in Queensland, including a forensic accountant, have been examining the purchase, and the links between the vendors and the Labor Party's investment companies, for several months.

The cut of almost 25 per cent in the price of the house in Norman Park, one of Brisbane's most fashionable suburbs, occurred when the local residential property market was experiencing modest growth.

Property sources say that such a significant loss at that time was inexplicable unless the vendors were inexperienced or had paid far too much in the first place. Larry Moses and Nick Kassos, the two former Texberg directors, were experienced investors in businesses and real estate.

Mr Moses told The Australian yesterday that he had paid too much for the house when he bought it for $500,000. He said he agreed to pay $500,000 to the vendor, Peter Drew, because it was the only way he could offload another more expensive property to Mr Drew.

"I paid an inflated price for the property, which was bought subsequently by the Rudds," Mr Moses said.

"I don't think there is an angle there. It might look like he got some special deal, but he didn't. I was the mug who had paid too much for it because I was desperate. It was my stupidity, not any clandestine intent on Kevin Rudd's part. Until you spoke to me, I did not even know that Kevin Rudd had bought it."

Mr Moses said he became a director of Texberg in 1991, before the transaction, because he had been running restaurants on properties owned by the Labor Party, and he knew Labor stalwart Ian Brusasco.

"Ian is still a friend of mine and he knows that I do not vote Labor," Mr Moses said.

He said Mr Rudd's political rivals would "end up with egg on their face" if they pursued the matter. "There is zero mileage in this one," he said. "The only goose in the arrangement is me."

The $116,000 loss incurred by Mr Moses and Mr Kassos came at the same time Mr Rudd and Ms Rein made a windfall profit by selling another property in the area after owning it briefly.

Mr Rudd at the time was the most senior public servant in Queensland, as Director-General of the Cabinet Office in the state Labor government of then premier Wayne Goss.

The businessmen were directors of Texberg with Labor luminaries and union bosses. They included Mr Brusasco, the then chairman of Labor Holdings, the major fundraising entity for the ALP in Queensland; and Harry Hauenschild, former president of the Trades and Labour Council in Queensland.

Subsequent directors of Texberg after Mr Kassos and Mr Moses resigned from the company in 1992 include Wayne Swan, now the Opposition Treasury spokesman; Australian Workers Union head Bill Ludwig; ALP state secretary Milton Dick and his predecessors Mike Kaiser and Cameron Milner; and Queensland Teachers Union general-secretary John Battams.

Texberg, which has been named in federal and state parliament because of its connections to the Labor Party, was deregistered last year.

The investigation of Mr Rudd's financial background by the Liberal Party has involved scrutiny of his late payment of stamp duty on a Brisbane investment property that he had bought for $240,000 in June 1994 and sold for $287,000 in December 1994, and the purchase by Ms Rein of a Sunshine Coast unit in April 1994 for $203,000.

The Nationals have also been raising questions about the property purchases.

A spokesman for Mr Rudd said yesterday: "Mr Rudd and Ms Rein put a bid on a house in December 1994. They understood that the house had been vacant and on the market for a long period of time. After a normal commercial negotiation through the real estate agent, they bought the property."