Moira Deeming offered John Pesutto a chance to avoid bankruptcy and delay payment of $2.3m in legal costs until 2027 on the condition her preselection for the next election be assured by the Liberal party.
The upper house MP commenced bankruptcy proceedings earlier this month after the former Liberal leader failed to pay the costs ordered by the federal court in May. The court found Pesutto repeatedly defamed Deeming by falsely implying she sympathised with neo-Nazis and white supremacists.
On Sunday, Deeming wrote to Pesutto with a last minute offer to resolve a damaging saga for the party. The offer was also addressed to the party’s president, Philip Davis and the Victorian opposition leader, Brad Battin. The federal Liberal leader, Sussan Ley, and Dan Tehan, a Victorian frontbencher were also copied into correspondence.
The offer was not accepted before the 5pm Tuesday deadline as the Liberal party did not agree to its terms.
Deeming told the senior figures she was dismayed by reports the state party was considering loaning its own funds to Pesutto to help him pay her legal fees and avoid bankruptcy, which would trigger a byelection in his seat of Hawthorn.
“From the outset, both former president Greg Mirabella and incumbent Philip Davis publicly stated that no party funds would be used in this action and to now expect the party to cover Pesutto’s substantial debts goes against the grain of everything we believe as Liberals,” Deeming wrote.
The proposed loan will be discussed at a meeting of the Liberal party’s 19 member administrative committee next Thursday – 19 June. Large payments must be approved by a majority of members. Sources close to Pesutto believe they have enough support, but some members of the committee remain strongly opposed to the loan.
Deeming’s offer to grant Pesutto more time to pay her legal costs came with five conditions, including that her preselection for the seat of western metropolitan is endorsed “by a special resolution however described in constitutional terms”.
She said this was necessary “so that I enjoy the right to serve my community without any internal distractions, which is something denied to me to date”.
Preselections for the upcoming 2026 state election are expected to begin later this year and Liberal party sources expect Deeming would face a challenge for the top spot of the western metropolitan ticket.
One party source in the region has told Guardian Australia just three of the 11 local branches that make up her seat support Deeming. They said membership numbers in the region since 2022 had increased just enough to tilt the balance in a challenge’s favour.
“She doesn’t have the local numbers to secure preselection,” they said.
It’s possible the party’s administrative committee takes charge of some preselections. But two other Liberal sources have said Battin would not want to intervene.
“He’s fed up with the entire situation,” a party executive said.
“If Moira doesn’t have the numbers, she’s gone. He’s not going to step in to help her. He just wants the membership to decide.”
In the letter, Deeming also asked the Liberal party “to provide me and my family an unreserved written and public apology for the way I have been treated, for the imputations against my reputation, and that all the false allegations and defamatory slurs directed towards me are rejected”. Deeming wanted the apology to come from Battin.
She wanted Pesutto to pay all money raised so far to pay her costs – reportedly more than $1m – to be paid to her now with the rest due by 30 March 2027.
She also urged the Liberal party to appoint an independent person from outside Victoria, such as a former judge, to conduct a review of the party’s complaint resolution process.
Finally, she asked “all parties draw a line under the events of the past two years and ensure our focus is on the constituents we serve, the party we love and the people of Victoria”.
“I also want to respect the donors who have supported our cause in their hope that a good government can once again return to the state we love under the leadership of Mr Battin, whom I am deeply committed to and support as his representative in western metropolitan”.
Battin declined to comment on the offer and said his focus “remains firmly on the issues that matter most to Victorians; spiralling crime, the cost-of-living crisis, and the growing housing shortage”.
Deeming was contacted for comment.
