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Issue # 1417      1 July 2009

Utegate & democracy

Parliament is in recess but the storm whipped up over “Utegate” is yet to die down. Police are still investigating the origins of a fake email that sought to link Rudd adviser Andrew Charlton to finance arrangements for Queensland car dealer John Grant – a friend of the Prime Minister and a donor to the major parliamentary parties. Treasurer Wayne Swan has come under pressure about his department’s representations in the same matter. The most serious injuries so far in the battle of words appear to have been suffered by Opposition leader Malcolm Turnbull. What seemed to have been a minister or even PM-toppling scandal has backfired on the wealthy would-be Prime Minister with his own record of helping donor “mates” coming under scrutiny.

Utegate – so-called for the donation by John Grant of a second hand utility to Labor’s 2007 election campaign – speaks volumes about the current state of Australia’s two party political system. A mole or a number of moles leak information to the Opposition to equip it to argue the driest neo-liberal economic line in Parliament. Godwin Grech – the senior public servant whose statements to a Senate inquiry ignited the whole Utegate affair – is believed to have met secretly with Turnbull and Liberal Senator Eric Abetz before giving his evidence. He worked for Opposition Treasury Spokesman Joe Hockey during the Howard years and describes himself as a “believer in the positive power of the market.”

In Treasury Mr Grech oversaw preparations for a scheme known as OzCar – a Commonwealth-backed system of finance for the car industry whose dealers’ own credit facilities have failed during the current economic crisis. Clearly, the “positive power of the market” needs the state to step into the role of major risk-taker when the whole system of private profit gets in trouble. Both sides of politics agree and legislation for the $2 billion OzCar taxpayer-funded scheme was passed last week.

Mr Grant, owner of the struggling car dealership at the centre of the recent turmoil, has shown the sort of generosity that provides the cement for Australia’s two party political edifice. He lives in the same street as the PM in the Brisbane suburb of Norman Park. Mr Rudd denies belonging to the exclusive 51 Club but John Grant and up to 20 other members held a dinner in 2002 to raise money to help Rudd pay off a $32,000 legal bill.

Mr Grant’s business partner was controversial property developer George Cheihk. Grant and Cheihk owned a whitegoods importing concern called Aussie Rent. Mr Rudd refused to answer a question from Opposition frontbencher Tony Abbott about whether he had ever made representations on behalf of Aussie Rent during his trips to China as Labor’s foreign affairs spokesman. “All of Mr Rudd’s interactions with Mr Grant have been entirely appropriate,” was all that a staffer from his office would say on the matter.

Aussie Rent went bust in 2007 and Mr Cheihk was declared bankrupt. The bankruptcy was annulled in early 2008. Shortly after he was initially declared bankrupt, Cheihk was in Brisbane Magistrates Court charged with possessing ecstasy and holding a flick knife to the throat of a nightclub patron. He pleaded guilty to an assault charge this month and was fined $500 with no conviction recorded.

Mr Cheihk’s companies made sizable donations to the Queensland branches of Labor and the Libs in 2003-04 according to Electoral Commission records. Collingswood Park Developments donated $206,231 to the Liberal Party and Qld Group Ltd gave $50,000. Collingswood Park gave $89,500 to Labor and his Haven Road Developments contributed $50,000. Qld Group kicked in $12,000.

On the other side of the narrow political divide, Mr Turnbull is being quizzed about a $10 million grant given to a friend and election campaign donor, Matt Handbury. Turnbull was Environment Minister at the time of the grant for a rainmaking project that has since been scrapped. The government maintains the amount paid was five times what was recommended by the department and has described the payment as corrupt.

Turnbull and Abetz have both said they will protect their sources during police investigations into the fake email from Rudd’s office. This prompted CFMEU national secretary Dave Noonan to point out the hypocrisy of the Liberal heavyweights who both support the coercive powers of the Australian Building and Construction Commission. The construction site Gestapo doesn’t even grant building workers the right to silence about union activity under pain of six months’ jail.

It remains to be seen what will come out of the flurry of accusation and counter-accusation and the police investigations underway. A truce might be called on the grounds that each party has equivalent quantities of “dirt” on the other. A judgement may be made on both sides that too many insights are being given to voters about the system of power and influence that keeps the Coalition and Labor as exclusive alternate governments in the service of corporate power.

Next article Scrymgour’s stand wins solid backing

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