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Issue # 1423      12 August 2009

The Ozcar labyrinth

Last week the Commonwealth Auditor General’s Department released its report into the federal opposition’s attempt to discredit the Rudd government over an allegedly corrupt relationship with a Queensland car dealer. The report’s findings will prove politically fatal for Liberal leader Malcolm Turnbull, but it also raises serious questions for the government.

The controversy began with opposition allegations that Rudd and the ALP leadership had benefited materially when an Ipswich car dealer, John Grant, lent Rudd’s 2007 federal electoral campaign team a second-hand utility truck for use during the campaign. The opposition also alleged that after the election the government sought favoured treatment for Grant under the Ozcar finance scheme, which was established to provide financial backing for car dealers after withdrawal of two firms from the Australian car finance market.

Liberals Senate leader, Eric Abetz, first questioned Godwin Grech, the senior Treasury official who oversaw the Ozcar scheme, about Grant during a Senate estimates hearing on June 6. However, it has now been revealed that prior to the hearing Grech had contacted Abetz and Turnbull and told them he had received an email from a government adviser, Andrew Charlton, suggesting that Grant should receive Ozcar assistance. Grech had also suggested questions to be asked at the hearing.

On June 12 Grech met with Turnbull and Abetz and showed them a copy of the alleged email. He also suggested that a Senate inquiry should be convened, with him as key witness, and suggested which questions he should be asked. Turnbull instigated the inquiry, and on June 19 Abetz read out the text of the email, which he claimed he had heard about from a journalist, and asked the questions Grech had suggested.

However, the government denied it had sent or authorised the email, and initiated a police investigation, which located evidence of the email and identified it as a forgery. Grech subsequently confessed that he had fabricated the email, and that he had discussed the Ozcar scheme with Abetz and Turnbull.

Abetz and Turnbull admitted that they had seen the email during discussions with Grech, but denied that they knew it was a forgery. Turnbull conceded he had given Grech the phone number of the journalist mentioned by Abetz, but he also produced documents that revealed Grech’s involvement in the pre-determined questions.

Turnbull claimed that Grech had orchestrated the whole affair, and had misled “the opposition, the parliament and the Australian people”. He declared that his only regret in the whole matter was ever having met Grech. Abetz, more wisely, apologised for his part in the affair.

Possible charges

Grech clearly breached the public service code of conduct during his discussions with Turnbull and Abetz. His career is ruined. Turnbull, Abetz and Grech may face charges that they manipulated parliament and were guilty of contempt of the Senate, which is punishable by a censure, a fine or even imprisonment.

Turnbull and Arbetz described Grech as “a person we knew very well”. It is clear that they cultivated their relationship with Grech, and that they deliberately used his information to pursue their Utegate vendetta.

Coaching a witness regarding Senate hearing questions would constitute contempt of the Senate, but Turnbull and Abetz maintain that Grech told them what to ask, not the other way around. Grech certainly prepared the list of questions, but discussing the matter with him and agreeing on a list of questions may still be deemed to be an offence. The Clerk of the Senate has stated that coaching constitutes contempt, “whichever way around” it occurs.

Abetz has claimed that seeking information from public servants is a normal part of the activities of opposition MPs. However, the Australian Public Service Commissioner Lynelle Briggs has stated that public servants must serve the government, and that they have no right to provide information to opposition MPs. The implication is that Abetz and Turnbull were also at fault by encouraging Grech to do so.

The government will seek a Senate privileges inquiry into the Ozcar affair. They tried to do so when the Liberals first made the allegations, but were blocked by the vote of Family First Senator Steve Fielding.

Unanswered questions

The government has emerged the winner in this astonishingly complex saga. Rudd had declared receipt of Grant’s utility during the election, and the Auditor-General’s report has cleared Rudd and his team of any wrongdoing. However, the government’s policies have come under question.

For example, is it really necessary to featherbed Australia’s Ford car dealers with the Ozcar scheme, which will cost an estimated $850 million? The firm Credit Suisse has been commissioned to implement the scheme for another $5 million, and now the whole Ozcar program is to be reassessed by a specially-appointed probity advisor, doubtless for a further hefty sum.

Moreover, Grech claimed he had been working more than 80 hours per week, in order to implement the scheme The Auditor-General’s inquiry has concluded that the resources allocated by Treasury were inadequate, which stands to reason, given that the severe cuts made to the public service during the Howard years have still not been rectified by the Rudd government.

However, the most significant outcome from the Ozcar affair concerns the Liberal Party leadership. Turnbull’s days as leader are numbered. Tony Abbott has insufficient support as a potential replacement, and Joe Hockey has expressed reluctance. Andrew Robb is little known.

That leaves the way open for Peter Costello. He has declared that he will retire before the next elections, but he has a very powerful motive for changing his mind, because of his long frustration at not being able to take over as Prime Minister from Howard.

So we could have a return of the politician with the maddeningly smug Cheshire cat smile, who played a key role in the Howard government’s introduction of the GST, the national maritime dispute, the WorkChoices industrial horror, and numerous other outrages against the working people of Australia.

Just watch what happens before the next elections.

Next articleMore drama ahead for a country practice

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