Ex-Labor minister Theo Theophanous resigns from board of State Trustees

Former Labor minister Theo Theophanous has resigned from the board of State Trustees amid a damning new finding.

Former Labor Minister Theo Theophanous says IBAC overlooked or ignored critical evidence in reaching its conclusion.

Former Labor minister Theo Theophanous has resigned from the board of State Trustees amid a damning new IBAC finding.

It has been revealed Mr Theophanous — a member of the Cain, Kirner, Bracks and Brumby governments — was the subject of a secret Independent Broad-based Anti-corruption Commission investigation that found he improperly lobbied for a developer and received donations for his daughter Kat’s state election campaign.

The special investigation, dubbed Operation Clara, probed lobbying activity relating to a $31bn proposal by the Australian Education City (AEC) consortium to develop a large education, residential and employment district in Melbourne’s west.

It found Mr Theophanous improperly lobbied in favour of the proposal on behalf of AEC, and misused his position on the board of the Metropolitan Planning Authority.

He also failed to declare a conflict of interest and to comply with a requirement to register a lobbying client and “sought to advance his private lobbying business by indicating to clients he had access to staff and information within the VPA that would assist with their matters.”

IBAC found that instead of payment, he obtained benefits from AEC and its associates in the form of donations to his daughter Kat’s campaign for election to the Victorian Parliament.

Former Labor Minister Theo Theophanous has been asked to resign from the board of State Trustees.

Ms Theophanous, who has held the seat of Northcote since 2018, was specifically cleared of any wrongdoing.

A government spokesman said the report raised “extremely serious allegations” about Mr Theophanous’s dealings.

Mr Theophanous resigned from the VPA board last week.

The report comes amid an ongoing Victorian Ombudsman investigation into the politicisation of Victoria’s public service.

As part of the report, IBAC called for wide-ranging changes to the conflict of interest provisions, including a ban on lobbyists being appointed to public entity boards.

“Confidence in democratic government is undermined if there is a lack of transparency in this process and if particular individuals or bodies can gain a disproportionate or improper influence over government decision-making,” it said.

“Conflict of interest provisions are insufficient in reassuring the public that lobbyists can be trusted to focus on advancing the public interest when serving on a public entity board.

“This is because of the ease with which privileged access can be inferred and the conflict of interest requirements disregarded by a lobbyist serving as a director on a public entity board.

“Operation Clara suggests that lobbying and public entity board duties are, at least to some extent, incompatible.

“The board of a public entity must act and be seen to act in the public interest. The first step in achieving this is to appoint directors who can demonstrate that they do not have ongoing connections to lobbying interests relevant to the functions of the board to which they have been appointed.”

In a statement issued on Wednesday Mr Theophanous said the report lacked “coherence, credibility and truthfulness”.

“The findings and allegations in IBAC’s report simply do not stack up against logic, the timelines, the context or the evidence,” he said.

“I refute IBAC’s claims against me in their entirety.”

“If IBAC is allowed to get away with this kind of self-serving report that is peppered with false assumptions and foregone conclusions in pursuit of its agenda it will represent the greatest challenge to a functioning innovative adaptive democracy. At the very least it should be objectively and critically analysed with serious questions asked of IBAC as outlined in my submission,” he said

Originally published as Ex-Labor minister Theo Theophanous resigns from board of State Trustees