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Rudd's chief of staff under the microscope.

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Senator the Hon Michael Ronaldson Shadow Special Minister of State

''Just 24 hours since the release of Kevin Rudd's Green Paper, questions are already being asked about potential conflicts of interest involving the Prime Minister's Chief of Staff, David Epstein,'' said Senator Michael Ronaldson, Shadow Special Minister of State.

''Kevin Rudd's Green Paper has rejected several recommendations from the Rudd Government's key climate change advisor Ross Garnaut.

''One of the recommendations that Kevin Rudd has rejected is that electricity generators not receive compensation for the carbon scheme.

''Instead, there has been a political decision to provide compensation in the form of cash and or free permits to coal-fired electricity generators. Kevin Rudd has also indicated that this compensation will not be decided on a neutral policy basis, but that there will be a process of negotiations and lobbying from each of these companies.

''This exemption creates a feeding frenzy for the lobbyists that represent them in negotiating cash payments and free permits from Government.

''The Lobbyist Code shows that Government Relations Australia is the single biggest lobbyist for electricity generators and energy companies in Australia.

Clients that Government Relations Australia is actively lobbying the Rudd Government over include Loy Yang Power, Newcastle Coal Infrastructure Group, the National Generators Forum (representing 22 power generators with combined assets of more than $40 billion), BG Group and Monash Energy (a collaboration of Shell and Anglo American).

Questions that Kevin Rudd must answer: 1. Which of Government Relations Australia's energy clients were also clients of David Epstein's when he was a Director and Shareholder of Government Relations Australia?

2. Did David Epstein have access to any cabinet submissions regarding the special exemptions for electricity generators?

3. What meetings, correspondence and other discussions did Kevin Rudd or members of his office have with clients of Government Relations Australia?

''Kevin 07 styled himself as open and transparent. Here is Kevin Rudd's big chance to prove it and disclose whether or not his Chief of Staff was lobbied by Government Relations Australia on behalf of any of their clients with an interest in this exemption.

''This is not merely a perception of a conflict of interest. It's not even a potential conflict of interest. It is a straightforward, garden variety, conflict of interest.'' said Senator Michael Ronaldson, Shadow Special Minister of State.