Members of the Liberal party’s federal executive say they will demand an end to “a culture of financial secrecy” at a meeting next week after being “kept in the dark for years”.
The members say the serious concerns about transparency and governance raised in explosive leaked emails from the party’s outgoing honorary treasurer, Philip Higginson, echoing complaints made in 2010 by his predecessor, Michael Yabsley, must finally be addressed by the federal director, Brian Loughnane, and president, Richard Alston.
Both Higginson and Yabsley complained that they were asked to sign off on financial accounts without full knowledge of what was in them. Sources said the treasurers had not known how much Loughnane was paid and did not have full access to the “management accounts” – the income and expenditure of the Liberal federal directorate.
“They need to answer these questions or this is going to blow up,” one federal executive member said, saying answers would be demanded at the first federal executive meeting of the year on 6 March.
“These issues have been going on for years. The federal executive doesn’t see the accounts. The finance committee meets about once a year and it is told about the accounts but it doesn’t see them and it doesn’t see the letter from the auditor. The whole thing is a farce.”
But former federal treasurer Shane Stone, himself the author of the famous “mean and tricky” memo in 2001, said the federal organisation needed to “settle down and support the government and the leader”.
He said if any members of the federal executive had issues with financial transparency they should raise them internally and not in the media.
And he criticised Higginson, saying it was “not helpful that he had sent his email to every Tom, Dick and Harry, because it was inevitable that it would leak”. Stone’s email also leaked, but he said he had only made one copy, for the then prime minister, John Howard.
Stone said he could see “no validity” in Higginson’s concerns.
Higginson is understood to have refused to sign off on the accounts for several months because of incomplete information, but the prime minister, Tony Abbott, has said that since Higginson has now signed off on the party’s accounts the issue is “a storm in a teacup”.
But the communications minister, Malcolm Turnbull, had a very different view on Wednesday.
He said the party treasurer should have access to all financial information and it was clear “some issues” had developed in recent years.
“Transparency, accountability is absolutely critical,” he said. “We demand it in the corporate sector; we demand it in the government sector.
“I was satisfied with the level of accountability and transparency when I was the honorary federal treasurer [of the Liberal party] but I had access to the management accounts. There was no financial information that I sought when I was federal treasurer of the party that was not available to me. Clearly some issues have developed in the intervening decade-plus years.
“From what I’ve read of the recommendations [from Higginson] they seem pretty standard recommendations about corporate governance. Phil Higginson is a very experienced company director. He is a corporate governance expert. He’s regarded as an authority in that field, so I’m sure the federal executive will pay very careful attention to his proposals.”
Yabsley, who resigned as federal treasurer in 2010, said there was “a remarkable similarity between the points I was making at the end of 2010 and the points that Phil Higginson is making at the beginning of 2015”.
In his emails, leaked on Monday, Higginson, who is a personal friend of Abbott’s and former president of the federal electoral council in Abbott’s electorate of Warringah, said: “I have attempted at times, without a great deal of success, to maintain a close watch on where the money went due to stonewalling and obfuscation by management.”
He recommended a series of changes, including a review of internal financial controls, the setting up of an audit committee, and new processes for declarations of interests and pecuniary interests.
And he was incredulous that the Liberal party had allowed Loughnane and his wife, Tony Abbott’s powerful chief of staff, Peta Credlin, to occupy two such critical roles at the same time.
“How this party ever let a husband and wife team into those two key roles where collegiate competitive tension is mandatory … is a complete mystery … The federal director has a fiduciary duty to act in the best interests of the organisation at all times, repeat, at all times. How can this possibly happen when the COS to the PM is his wife?
“It immediately brings about cessation of open communication to the federal direction, contributes to wooden and unreliable communication ... and, dare I say it, retribution.”
Loughnane was contacted for comment.
