With the Victorian ALP hierarchy now on a single-minded mission to drive dot.bomb mogul Evan Thornley out of hiding in the south of France and into the waiting arms of slavering journalists, one issue has remained out of sight — Thornley’s intimate relationship with his financial overlords at Macquarie Bank. Ever since Thornley and partner Tracey Ellery set up LookSmart in 1995, Macquarie has never been far behind — providing venture capital, governance advice and even moral support to Thornley’s private sector career hatched in the bearpit of the Melbourne University Student Union.

To date, the focus has been squarely on Thornley’s cosy relationship with Better Place, the electric car battery firm that he, and Victorian Premier John Brumby, hopes will revolutionise car transport on the Eastern seaboard. Macquarie is in the thick of that deal, having pledged to help Better Place raise $1 billion for the ambitious electric car network.

In 1998, after Thornley bought back LookSmart for a song from Readers Digest, Macquarie was among a stable of venture capital firms that stumped up $US8.3 million in seed money to re-launch the firm. MacBank held a 8.8% stake before it floated in the US and Macquarie Technology Ventures’ Anthony Castagna was installed as a LookSmart director as a major shareholder. 

Macquarie saw the value of its investment skyrocket when LookSmart went public in 1999. As this announcement indicates, Macquarie sold 439,217 shares on 23 February 2000, just before the dot.com crash, for approximately $26 million. It held a further 750,000 LookSmart shares in one of its funds, but that was investors’ money, not Macquarie’s. Macquarie got out at $59 per share (LookSmart’s all time high was very briefly $72 a couple of weeks later).

But the relationship wasn’t completely severed — when three board members jumped ship in 2002 amid disputes over Thornley’s bid for the chairmanship, Castagna stayed put. Thornley also stayed brave and true — as late as August last year, nine months after his election to Victoria’s upper house, he still had a substantial part of his $54 million fortune tied up in Macquarie Fortress’ disastrous managed funds that were mauled by the credit crunch.

For someone with Thornley’s reputed business smarts, his rumoured $700,000 salary as Better Place’s local CEO seems skinny compared with the fortune he made selling-off LookSmart shares shortly before the tech-wreck, as Adam Schwab details elsewhere in today’s edition. Crikey understands Thornley may also be seeking an equity stake as condition of his return to the private sector, if not in Better Place then part of a consortium backed by his pals at Macquarie.

Curiously, in yesterday’s Financial Review it was revealed that Macquarie had considered purchasing ABC Learning but abandoned that bid after it was rebuffed by then-chief Eddy Groves and chairman David Ryan. The idea of Thornley benefiting on two taxpayer-subsidised fronts is perhaps a stretch in the current political climate. Still, stranger things have happened and if Thornley enters into a quid-pro-quo as Macquarie’s man at Better Place in return for contributing part of his private fortune to a Macquarie-led buyout of Groves’ old mob, you’ll have read it here first.

Alternatively, with the political fallout intensifying, Macquarie and Better Place could now be thinking they tapped the wrong person entirely. Victorian Innovation Minister Gavin Jennings, Robert Ray and Rob Hulls have joined the chorus of disapproval among senior ALP ranks — the thought of Thornley travelling cap-in-hand to Canberra to win cash from former factional buddy Kim Carr is now laughable. Even more dubious would be a Better Place deal thrashed out between Thornley and his successor Martin Pakula in Thornley’s old office.

It beggars belief that the Better Place conflict of interest implications wouldn’t have crossed Thornley’s mind. But as Victoria’s richest ex-politician hit the phones to seek support for his still-live Cabinet tilt late on 27 December, before hastily quitting politics just hours later, it’s not inconceivable that a rash decision may have been reached with lasting consequences for his post-politics career.