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Allegations of preference deals in the Queensland seat of Lilley have been referred to the Director of Public Prosecutions.

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PETER CAVE: Opposition leader, Kim Beazley, is standing by his frontbencher, Wayne Swan, whose actions have been referred to the Director of Public Prosecutions over allegations that he sent an envelope full of cash to the Democrats who later directed preferences to him. Mr Beazley says the arrangement with the Democrats was put in place at a national level by the former ALP secretary, Gary Gray and by Senator Robert Ray. But, as Mark Willacy reports from Canberra, Mr Gray says that it’s quite possible that separate deals with the minor parties were done at grassroots level, including in Wayne Swan’s seat of Lilley.


MARK WILLACY: Labor’s leadership group last night gathered for their regular dinner and strategy meeting in the national capital and no doubt the issue of plain brown envelopes filled with $50 notes put a dampener on proceedings. The claims by a former ALP organiser that frontbencher, Wayne Swan, gave him $1,400 in an envelope to give to the Democrats during the 1996 election campaign have already pushed petrol prices and road funding off the front pages.


Mr Swan’s solicitor denies there was any secret deal, saying in a letter to the ABC:


I am instructed that Senator Robert Ray reached agreement with the Democrats at a national level in regard to how they would deliver their preferences in various federal seats. I am instructed that subsequent to that agreement being entered into, assistance was provided to Democrat candidates.


The other player in preference negotiations, former ALP national secretary Gary Gray, acknowledges a preference deal was struck in four Queensland seats, including Mr Swan’s electorate of Lilley. But he says any number of local negotiations could have taken place and Mr Gray concedes a deal could have been reached between Mr Swan and the Democrats, but adding that he’s never heard of money changing hands during his time as ALP secretary.


The other preference negotiator in 1996, Right faction powerbroker Robert Ray, agrees that there could have been discussions about pr eferences at a local level. As for the Democrats, they concede they did receive money; however they claim the amount was closer to $500 and that the cash was used for electorate material such as campaign leaflets.


The government, however, regards the allegations as political dynamite, and Special Minister of State, Chris Ellison, has written to the chairman of the Parliamentary Committee on Electoral Matters, fellow Liberal Christopher Pyne, asking him to look into the Swan claims. And, not surprisingly, Mr Pyne is keen to see the allegations cleared up.


CHRISTOPHER PYNE: Usually when a minister refers a matter to a committee it is discussed by the committee and determined whether they’ll include it on the agenda, but it does fit within the general parameters of our responsibilities as the electoral matters committee and so I would be very surprised if we didn’t at least consider it.


MARK WILLACY: So would that involve, if it was placed on your hearings agenda, would that involve Wayne Swan, for example, giving evidence or being questioned?


CHRISTOPHER PYNE: Quite possibly. The committee has a number of different sources of receiving evidence—one of them, of course, is to call witnesses. And it’s possible if the committee determined to do so that they could call Mr Swan and put the allegations to him and seek a response.


MARK WILLACY: The Australian Electoral Commission has referred the Swan claims to the Director of Public Prosecutions, and an AEC spokeswoman told A.M. that the commission is seeking preliminary advice about whether or not there’s any evidence of bribery under section 326 of the Electoral Act. And because the DPP is only providing advice, not launching an investigation, Wayne Swan will not be required by his leader to stand down.


But as one prominent Labor MP told A.M. while the exchange of money is not in his opinion illegal, it is distasteful, not to mention politically damaging.


PETER CAVE: Mark Willacy in Canberra. A spokesman for the opposition leader told A.M. that Mr Beazley was unavailable for comment.


The Prime Minister, John Howard, has stopped short of calling for Wayne Swan to be stood aside from Labor’s front bench. Mr Howard says that the opposition leader, Kim Beazley, should satisfy himself that Mr Swan can remain in the shadow ministry while th e Director of Public Prosecutions investigates the allegations.


JOHN HOWARD: That investigation has been initiated by the Electoral Commission and anybody is entitled to the presumption of innocence in relation to these matters. I am not going to do what the Labor Party has done in relation to allegations made against some of my colleagues and consider somebody guilty without the due process.


PETER CAVE: The Prime Minister, speaking on Channel Nine this morning.