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Former President of the Liberal Party and businessman has claimed that the National Crime Authority has colluded with the Victorian Director of Public Prosecutions to blacken his name

PETER THOMPSON: John Elliott, the businessman and former Liberal Party President, has set out to clear his name by taking on two of Australia's key law enforcement agencies. The former head of Elders IXL says that the National Crime Authority and Victoria's Office of Public Prosecutions colluded to blacken his name by conducting investigations lasting more than three years. The inquiries, which Mr Elliott calls a conspiracy, were begun in 1989 when he was President of the Liberal Party. They centred on foreign exchange transactions which Mr Elliott says were totally commercial and above board in all respects.

John Elliott's legal battle to stop the investigations into his business dealings was revealed yesterday when the Federal Court lifted suppression orders. It was revealed that the National Crime Authority was considering charging Mr Elliott and another former Elders executive with two counts of theft and one of taking money from one company and giving it to another. Investigations centred on foreign exchange transactions between Elders and companies associated with Alan Hawkins, the New Zealand entrepreneur who is now in jail for conspiracy and fraud.

Our finance correspondent, Phillip Lasker reports on an earlier crossing of paths between companies run by Mr Elliott and Mr Hawkins.

TV ADVERTISEMENT: Australia's future depends on a strong and healthy steel industry. A while back it looked as though we would end up buying our steel from other countries but BHP has invested hundreds of millions of dollars here and at Newcastle and Whyalla, to modernise Australia's steel production.

PHILLIP LASKER: Remember that - it was all over the television screens at the height of the battle for control of Australia's biggest company, BHP. The ads were used by BHP as a weapon against Robert Holmes a Court's daring takeover bid for the company. By that time, in mid-1986, Mr Holmes a Court's bid was seen as deadly serious, as opposed to six months earlier when it was described as a Clayton's bid. But suddenly, Robert Holmes a Court finds someone else has accumulated a stake in BHP as big as his own; John Elliott, the Elders IXL chief, and like Robert Holmes a Court, a brilliant takeover tactician - a white knight who just wants a seat on the board, or an opportunist? No-one seemed to know. Nevertheless, Robert Holmes a Court pressed ahead. As a formal bidder for control of the company, he was able to acquire more than 20 percent of BHP.

John Elliott had not launched a takeover bid so he was restricted by a 20 percent limit. Enter a little-known New Zealand investment group, Equiticorp, headed by Alan Hawkins. This is where the questions really started. Why was Mr Hawkins buying into an expensive war that had to be decided between Mr Holmes a Court and Mr Elliott? Equiticorp didn't even have the asset strength to attract large lines of credit, but suddenly banks were prepared to lend it huge amounts to acquire the BHP stake. The combined might of Messrs Elliott and Hawkins was enough to prevent Robert Holmes a Court from achieving his aim.

There was speculation of an illegal deal between Equiticorp and Elders. It prompted the corporate watchdog, the National Companies and Securities Commission, to confiscate Equiticorp's BHP shares and rule that in the context of the BHP takeover, Elders was guilty of unacceptable conduct because of business and social connections between it and Equiticorp. Mr Elliott denied there was any wrong-doing and Elders successfully appealed against the declaration in the Victorian Supreme Court. It brought a stinging attack from Mr Justice Marks who found the NCSC had acted without hearing Mr Elliott's case and that the Commission's declaration was of grave concern. But the BHP play sparked investigations by Australian authorities and information from Australian investigators has been used to help convict a number of people in New Zealand.

Now the focus is on a foreign exchange scheme and the mysterious 'H' fee, which allegedly saw almost $70 million taken from Elders IXL and paid to recipients in New Zealand. The fee was mentioned at the trial of Alan Hawkins in New Zealand, who has been convicted of conspiracy and fraud.

PETER THOMPSON: Phillip Lasker reporting. Now let's hear part of yesterday's robust counter-attack by John Elliott against the NCA and Victoria's Office of Public Prosecutions.

JOHN ELLIOTT: The NCA has been involved in a relentless and unremitting campaign against me for the past three and a half years, and the Office of the Victorian Director of Public Prosecutions has aided and abetted it in its illegal activities. These bodies have colluded in an attempt to blacken my name. I have been advised by senior Counsel that they have acted unlawfully and have abused the power entrusted to them by the Commonwealth and the State of Victoria. This conspiracy was commenced in late '89 by State Labor Governments of Victoria and South Australia, along with the Federal Government, and was then designed to damage me as Federal President of the Liberal Party, and through me, to harm the Liberal Party.

PETER THOMPSON: John Elliott, claiming there was a political element surrounding the investigations into his business dealings which began while he was serving as President of the Liberal Party. The Federal Opposition's finance spokesman, Peter Costello, says that inquiries such as the NCA's into John Elliott, should not be allowed to drag on and on, but he says that the NCA's investigations into John Elliott's business dealings has not damaged the Liberal Party.

We will hear Mr Costello's comments on the Elliott case in a moment. Mr Costello was in Sydney last night, speaking at the conservative dining club, the Council for National Interest, where he fielded questions about the party's direction and leadership.

Sarah Armstrong's report begins with a question to Mr Costello from one of the assembled diners, a question which centred on the performance of the current Liberal Leader, John Hewson.

UNIDENTIFIED: And of course as someone who really has failed in the way he did, that I cannot see why he can stay there, because it just beggars belief that you would keep him. And you don't have to answer that if you don't want to but .....

SARAH ARMSTRONG: Peter Costello wouldn't buy into criticism of John Hewson, despite his own leadership ambitions.

PETER COSTELLO: Look, John Hewson is the Leader of the Liberal Party because he is the best equipped person to lead it ....

UNIDENTIFIED: Rubbish!

PETER COSTELLO: .... and that is why he is the leader and that is why he should be the leader. Until, until .... no, look, unless there is somebody better, he should be the leader and my view is he is the best.

SARAH ARMSTRONG: Peter Costello was also somewhat reluctant to discuss yesterday's accusations by former Liberal Party President, John Elliott, that there has been a conspiracy against him and the Liberal Party.

PETER COSTELLO: You have got to be very careful in this area. I think most people would say that we need a strong agency to attack organised crime. They would also say that these agencies have to operate within the law, just like anybody else, and if these agencies have information or evidence, the proper thing to do is to bring it into court, an open court, and to bring the evidence that way. I don't think it is in the public interest for inquiries to drag on and on and on, and people have rights too, you know, and the NCA has rights. And I think the issues, if there are issues, ought to be brought out into open court rather than going on and on behind the scenes.

SARAH ARMSTRONG: Were you surprised at what John Elliott said?

PETER COSTELLO: Look, he is entitled to defend his character and that is what he has chosen to do. In Australia, anybody is entitled to defend their character and if there is anything that indicates somebody has done wrong, the proper place to bring that out is in a court. I mean, you don't run campaigns like this behind the scenes or through the media.

SARAH ARMSTRONG: Do you think there has been a campaign against John Elliott?

PETER COSTELLO: Well look, I can't comment on that. These are obviously matters that are subject of legal proceedings and I am not acquainted with the detail.

SARAH ARMSTRONG: Did the investigation into John Elliott damage the Liberal Party at all?

PETER COSTELLO: Not in the slightest. If people want to put that around, then it really proves the case, doesn't it, that these sorts of investigations can be used for political purposes. I would have thought, at this very moment, everybody - the NCA, the DPP, the Labor Party - would be at absolute pains to say that there is no political element, no political mileage, one way or the other, in this.

PETER THOMPSON: Peter Costello, the Shadow Finance Minister.