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NSW Libs boss admits his party is a laughing -

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TONY JONES: It's proving to be a tough time for the Liberal Party. Police have now laid charges
against five members in relation to the distribution of a racist pap threat in the seat of Lindsay
just before the federal election last year. There's been more embarrassment for the party with the
revelation today of a high pro file member had his application to join his own branch rejected by
local branch members. Shortly we'll hear from Tony Abbott. First this report from Philippa
McDonald.

PHILIPPA MCDONALD: In the heart of Sydney's southern suburbs the port hacking branch of Liberal
Party has decided to teach the local federal member Scott Morrison a lesson. They've denied him
membership of their branch.

GEOFF SELIG, NSW LIBERAL PARTY PRESIDENT: It's extremely disappointing for all rank and file
members to have seen a new and energetic federal member with a great future ahead of him rejected
from a branch in his own backyard.

PHILIPPA MCDONALD: Scott Morrison comes with an impeccable Liberal Party pedigree. He was anointed
by the former prime minister John Howard and previously served as State director of the party in
NSW. And while he won the seat of Cook comfortably, four months after the election his local branch
wants little to do with him.

BRUCE BAIRD, FORMER MEMBER FOR COOK: It's just a few people who have decided to become obstinate
and flex their power and it's shown up to be a total nonsense that it is.

PHILIPPA MCDONALD: But to the Liberal Party's executive, it's indicative of far greater division
which could see the party in opposition for years to come.

GEOFF SELIG: And I think it just points to some of the internal machinations and games that we've
had in the NSW division for some time that if we do not sort out once and for all, people will
continue to make very negative judgements on us, certainly NSW in terms of our capacity to govern
the state if we can't govern ourselves.

PHILIPPA MCDONALD: John Ryan was, until 2006, the deputy leader of the Liberal Party in the NSW
upper house but he was defeated by the party's right for being too Liberal and he says the fours of
right are at play in Scott Morrison's rejection.

JOHN RYAN, FORMER SENIOR NSW LIBERAL: The Port Hacking branch of Liberal Party is well known in our
party as being a bastion of the hard right. Essentially what would have happened is Scott Morrison
would have applied to join that branch as he had every right to do and unfortunately it has become
the practice of factional war lords within the Liberal Party if they can't control the person who
wants to join a branch that they control, they simply use a rule which exists within the Liberal
Party to stop people of bad character joining the party, they exploit this rule in order to
maintain their dominance of a particular branch.

PHILIPPA MCDONALD: Today a man who rarely speaks publicly was speaking out. David Clarke hails from
the right and he's one of the NSW Liberal Party's most influential power brokers.

DAVID CLARKE, NSW LIBERAL POWERBROKER: You know, I don't know the individuals, I don't know the
detail of it, all I know is if I had any opportunity to exert any influence that I may have over
people who may have been prepared to listen to me, I would have cautioned them against taking the
step that they did.

PHILIPPA MCDONALD: So when you think about the Port Hacking branch of Liberal Party, are there any
members of your faction that spring to mind?

DAVID CLARKE: Well look, um, this idea of factions, I repudiate this idea that our party is based
on factions. When you talk about factions, we think of the ALP, that's a faction ridden party and I
don't believe our party is a factionally driven at all.

PHILIPPA MCDONALD: For his part the member for Cook today issued a statement.

SCOTT MORRISON MP: It is not my policy to comment on matters concerning the internal workings if
the Liberal Party. I am grateful for the overwhelming support provided by both the local community
and local party members and branches.

PHILIPPA MCDONALD: Behind the scenes some Liberals are saying off the record that they're shocked
and despairing over Mr Morrison's treatment, that it's made the Liberal Party a laughing stock. And
then there are those closely connected to Mr Morrison's electorate who are accusing him of taking
his local branch for granted saying he's been rejected because he never communicated with them, nor
did he attend a single branch meeting. The previous federal member Bruce Baird is encouraging Mr
Morrison to ride it out. After all other branches in his electorate would be happy to have him.

BRUCE BAIRD: He has been invited to join the Cronulla's women's branch which there are several men
as members but the latest I hear is the wool ware branch, the president rang him just before lunch
saying we'd very much like you to become a member of our branch so I think that's probably what
he's going to do.

PHILIPPA MCDONALD: Sydney's southern suburbs aren't the only area of discord for the Liberal Party
at the moment. The scandal over the pap threats distributed in Lindsay has resurfaced. Police have
confirmed they've charged five men, including Jeff Egan from the right of the party, and a former
member of the Liberal Party State executive. Also caught up in the affair is the husband of Jackie
Kelly, Gary Clark. Ms Kelly retired from the seat in last year's election. The Rudd Government is
planning its own inquiry into the Lindsay pap threat affair after the court case is completed.

Philippa McDonald, Lateline.