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Federal

Jun 22, 2009

Utegate explained

Canberra correspondent Bernard Keane lays out the Utegate scandal with easy-to-understand cast notes and diagrams.

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The cast:

John Grant: Brisbane car dealer and neighbourhood friend of Kevin Rudd and occasional attendee at John Howard events. Donated a 1996 Mazda Bravo to Rudd in 2007, lobbied MP Bernie Ripoll for assistance in the face of the GFC.

Godwin Grech: Principal Adviser, Financial Systems Division, Treasury. Former PM&C officer and workaholic SES Band 1 officer and long-serving Treasury bureaucrat, charged with the implementation of the OzCar initiative.

Steve Lewis: Veteran Press Gallery figure, political journalist for 17 years, at The Australian until 2007 when editor Chris Mitchell moved him on. Now one of the nation’s most widely-read political journalists via News Ltd tabloids.

Andrew Charlton: Prime Ministerial adviser. Economist, author of, inter alia, Ozonomics and apparently possessor of an ego the size of Rudd’s and Turnbull’s. Said to have been a big fan of Turnbull’s until he decided the ALP was his path to the Prime Ministership. Discussed OzCar with Turnbull at MidWinter Ball, later claimed Turnbull had threatened him.

David Martine: Head of the Financial Systems Division – Band 2 SES officer and Grech’s supervisor; moved from Finance to Treasury in 2001. Advised both the Senate inquiry and the Treasurer’s office that the Charlton email had not been found.

Mike Mrdak: Deputy Secretary, PM&C, incoming Secretary of Department of Infrastructure. Mrdak has an impeccable record and a strong reputation for probity. Oversaw the search for the Charlton email in PM&C and advised it had not been found.

Michael Delaney: Long-time head of the Motor Trades Association of Australia, Labor staffer in a distant previous life, heavily involved in coordinating work with Treasury in support of car dealers in the face of the withdrawal of GE Money Motor Solutions and GMAC from the car dealership finance market.

OzCar: Special Purpose Vehicle to provide Big Bank support to motor vehicle dealer financiers using a part-Government guarantee. Still not in existence.

The claims:

1) Kevin Rudd sought preferential treatment for John Grant as part of the OzCar implementation

Malcolm Turnbull 19 June: “The Prime Minister and Treasurer have used their offices and taxpayers’ resources to seek advantage for one of their mates, and then lied about it to the Parliament.”

Eric Abetz 4 June, in Estimates: “Minister, can you also take on notice for us whether the standards of ministerial ethics include in paragraph 2.17:Ministers shall ensure they do not come under any financial or other obligations to individuals or organisations to the extent that they may appear improperly influenced in the performance of their official duties as Minister.

“I would have thought that might apply even more so to the Prime Minister… he only responds to some [letters], like people that give him a private car.”

The evidence:

For:

  • Grech says he was contacted by the PMO in relation to John Grant, although his recollection may be faulty.
  • Grech’s manager, David Martine, and Labor senators vigorously, and successfully, acted to prevent Grech from answering a question at the Senate inquiry about whether it was Andrew Charlton, at least giving the impression there was something to hide.
  • The text of a 19 February email purportedly from Charlton to Grech has been circulated: “Hi Godwin, the PM has asked if the car dealer financing vehicle is available to assist a Queenslander dealership, John Grant Motors, who seems to be having trouble getting finance. If you can follow up on this asap that would be very useful. Happy to discuss. A.”

Against:

  • Rudd and his office deny being contacted by Grant or making representations for him. John Grant says “”I’ve never spoken to Kevin Rudd or anyone of his staff [regarding] the SPV, or now called OzCar… Never asked him for anything.”
  • PM&C and Treasury have advised the Charlton-Grech email has not been found in either system.
  • Grech says he does not have an email, and told the Senate hearing on Friday that he told Lewis he didn’t have an email. The permanent erasure of an email from two separate IT systems is extremely difficult.

Who’s right?

The AFP will be able to conduct a more forensic investigation than PM&C and Treasury’s IT providers undertook on Friday afternoon, and the issue will not be resolved until then, if at all. The absence of the email from both Treasury and PM&C systems can only be accounted for by deliberate erasure. But a cover-up of the email would require a conspiracy at the highest level between the PMO and Treasury and perhaps PM&C, and their IT providers, and Grech and Martine.

The only available evidence is therefore Grech’s caveated evidence to the inquiry, and doubts have been cast on Grech’s evidence by the head of the Motor Trades Association.

In the absence of the increasingly-unlikely email, not guilty.

2) Wayne Swan sought preferential treatment for John Grant

Malcolm Turnbull 19 June: “The Prime Minister and Treasurer have used their offices and taxpayers’ resources to seek advantage for one of their mates, and then lied about it to the Parliament.”

Eric Abetz 4 June: “It defies belief that the Treasurer… acknowledges that he had made representations to his own department on behalf of somebody that could become a beneficiary. And of course with money being made available.”

For:

  • Grech advised the Senate inquiry that the Treasurer’s office, which asked him to deal with Grant, made it clear that Grant was “no ordinary constituent.”
  • Grech’s emailed responses about his contact with Grant were sent on to Wayne Swan’s home fax.
  • Grech (in a hilarious exchange with ALP Senator Doug Cameron) stated that he had given Grant far more time than the dealer about whom Nationals MP Kay Hull had made representations.
  • Greg Cohen from Ford Credit told a Senate inquiry Ford Credit was asked to consider assisting John Grant by Treasury officials in a meeting about Oz

Against:

  • Grant has not received any assistance from Ford Credit or, obviously, the yet-to-be-established OzCar.
  • Delaney says his documents show Grant received treatment no different to that provided by Treasury for many other dealers, and if anything Grant received poorer treatment because he went through the Treasurer’s office.

Who’s right?

While Delaney disputes it, the idea that Grant did not receive better treatment than other dealers doesn’t stack up. Grech said he devoted considerable time and effort because he knew Grant wasn’t any “normal constituent”. And it is entirely normal for Ministers’ offices to ask public servants to devote time and effort to looking after Government mates and mates of backbenchers. What Grech was doing was what public servants have done for decades.

Guilty — in the same way as every other minister for the last decade is guilty.

3) Kevin Rudd misled Parliament with the statement

Kevin Rudd misled Parliament with the statement: “(I have been advised that neither I nor my office have ever spoken with Mr Grant in relation to OzCar; (2) neither I nor my office have ever made any representations on his behalf; and (3) I have not been aware of any representations on his behalf made by anyone in the government, including the referral referred to before by the Treasurer’s office.”

For and against:

  • See 1.

Who’s right?

Rudd’s caveat “I have been advised…” gets him off the hook even if the email turns up, although he will be seriously and perhaps terminally damaged, and would need to sack at least one staff member, as Howard did to Grahame Morris over the travel rorts affair. That now looks highly unlikely.

Not guilty.

4) Wayne Swan misled Parliament

Swan’s statements in Parliament:

It is the case that Mr Grant made representations to my office, and he was referred on to the SPV, just like everybody else. I have no idea what the outcome of that was. But it is entirely normal that, in circumstances where car dealers right around this country were potentially going to the wall, car dealers would have been ringing members of parliament, including the Treasurer’s office, asking how they could make contact with this organisation in the Treasury establishing the vehicle. That is the situation—an entirely normal situation, as the Treasury officials have reported in estimates today. — 4 June

I can say I have had no discussions with the Prime Minister about this matter whatsoever—none whatsoever. I am happy to look at what communications have taken place between my office and other offices. I am happy to do that, and I am sure there were a number of communications between my office and many over there and many over there. But, in the case of the Prime Minister and me, there were none. — 4 June

Mr Grant approached my office. He was referred to a departmental liaison officer who then referred him on to the relevant section of the department. Mr Grant would have received the same assistance as any other car dealer who was referred through that process received. — 15 June

Whether Swan has any idea what the outcome of Grant’s process was cannot be known. Let’s ignore that. The home fax issue is a furphy – all Ministers and Departmental Secretaries have home faxes. In fact, the real scandal is why Swan like a lot of other MPs can’t use a PC.

His last sentence on 15 June, however, says clearly that Grant would have received the same assistance as any other dealer, a statement at odds with Grech’s evidence. Swan is continuing to maintain that today. If other struggling dealers were not referred to finance companies by Treasury — and MTAA head Michael Delaney appears to be saying they were – then Grant clearly got better treatment.

Swan has a case to answer

5) Senior officials participated in a cover-up

Tony Abbott 19 June: “Well, you know, I hate to sound cynical, but there are such things as searches designed to lose the evidence.”

For:

  • Nothing.

Against:

Mrdak advised the Prime Minister’s office on Friday evening:

As advised, the Department has this evening undertaken a search of all of the emails in the PM&C email system for the period 16 February to 22 February. This search indicates all emails from and to Mr Chalrton. The search would include any material deleted from the system. PM&C captures a copy of all emails in and out of the Department’s system.

The Department has not found any record of an email from Mr Charlton to Treasury which relates to motor vehicle dealership or any related matters.

Abbott is suggesting either Mrdak is lying or PM&C officials and its ICT provider, Macquarie Telecommunications, which also provides services for the Defence Signals Directorate, deliberately failed to find the email.

Martine advised Chris Barrett, Swan’s COS, on Friday night that no emails from the PMO had been received by Grech on 19 February, and that “even if an email was subsequently deleted, it would appear in the log [for incoming external emails].”

Abbott’s claim similarly suggests Martine is lying or has been lied to by Treasury staff and their ICT provider.

Who’s right?

No evidence has been produced by Abbott. The involvement of senior PM&C and Treasury officials in a conspiracy such as this would be unprecedented in modern Australian history and, if revealed, require the resignations of the senior echelons of PM&C and Treasury, as well as all associated officials. It would represent a disastrous failure of the Australian Public Service beyond anything seen in the Howard years.

6) If the email is fake, its originator has broken the law

The basis of the AFP investigation is Division 144 of the Commonwealth Criminal Code, which provides that creating a Commonwealth document with the intention of dishonestly influencing the exercise of a public duty or function is punishable by ten years’ gaol. There is also an offence of impersonating a public official. Anyone employed by the Commonwealth falls under the definition of public official, including advisers.

Rudd’s calling in of the AFP appears to have worried the Coalition, who are now backing away from the email. Backbencher Stuart Robert this morning remarkably said “we’ve never actually made reference to it at all”. This was the real point of Rudd’s summoning of the AFP, and it has worked very well indeed.

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7 comments

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7 thoughts on “Utegate explained

  1. AR

    As usual, the magisterially omniscient, rabble-soothing, derailling trolls like ‘Rud…nist’ raqnts contain no typos, are constructed with correct, if latinate, grammar.
    This is not common with yer avraj RWDB.

  2. David1

    Ditto. if the ignoramus cannot bother to construct another contribution, albeit an insignificant pack of nonsense and stupidity, he/she/it should be tossed.

  3. Venise Alstergren

    Since when does Crikey allow identical comments to be posted on different sections of these hallowed pages?
    I refer of course, to Ruddisnotacommunist.

  4. David1

    Bernard I think I understood you correctly when you state….Steve Lewis: Veteran Press Gallery figure, political journalist for 17 years, at The Australian until 2007 when editor Chris Mitchell moved him on. Now one of the nation’s most widely-read political journalists via News Ltd tabloids…..be interested to know where you received your information re Mr Lewis being so widely read. Is that since his discord on the now disgraced, fake email or before? I have never seen figures published or spoken regarding his readership numbers.

  5. Heathdon McGregor

    I think that the libs used this as a test run, to see the automatic fallback position of Mr Rudd and Mr Swann. As probably predicted the fall back was partial denial, full deflection and weasel words. Mr Swann’s interview with Mr Oakes was like listening to Howard. Q. Did he get special treatment? Do you monitor other applicants as closely? A. He didn’t get the credit so how could i have assisted? I get faxes all the time? Anything but answering the question.

    Why didn’t Mr Rudd just say my office never sent the email as opposed to We cannot locate any evidence. Were they, as Mr Abbot alluded making sure the email could not be found?

    If the Libs have something on the Prime Wowser and 3dub(www) Swann then they simply need top allude to it in future and watch them weasel word their way into trouble.

    (www = weasel words wayne)

  6. RuddIsACommunist

    Rudd and Swan are GUILTY.

    This issue is NOT about an email, it is about the fraud on seret backroom deals and favours and liars covering their ar*ces.

    Labour and Kevin ‘bully’ Rude’s private paid PR spin team can put all the smokes and screen diversion tricks up, coz Kevin ‘BULLY’ RUDE knows he is a goner and his reptutation shot…. he cried communist red tears last night, coz his globalist dream of being head of the United Nations Security Council is slippin away 🙂

    Rude and his Canberra flat mate of 10 years aka ‘Australian Treasurer’ Wayne Swan are in deep deep trouble over a scandal of favours for business dealings that could see both of them SACKED from Parliament, it has been labled as ‘Utegate’.

    In Kevin Rudd’s bid to dodge fire, deflect and confuse the media reporting on the truth, he is firing furfy’s back at the main accuser Turnbull and getting his team to throw curve balls that looks like keystone cops with contradictory statements of fact and fiction.

    One of them must go – Kevin Rudd or Wayne Swan.

    It may be a dead swan song final curtain call to take the fall for his Kevin bloody Rude.

    This is the Scandal of the Century as it involes LIES, DECEPTION, COVER UPS, FRAUD and PROPAGANDA SPIN at its Ruddy Best.

  7. j-boy57

    and this would appear to leave Malcolm Turnbull looking about as forensic as the still surviving senator Heffernan
    after his homophobic attack on Kirby, any chance of a whoo-hoo Malcolm, the winner here is Craig Motors the losers
    would be the uteless Lib/nats Bravo Fella’s

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