‘A gift for our opponents’: Liberal boss calls for unity to stem electoral bleeding

Victorian Liberal president Philip Davis has called on party members to end “persistent” internal dramas and accused those mounting a court challenge to the loan to former leader John Pesutto of diverting resources in a “gift” to Labor.

In a memo on Monday afternoon, Davis also sensationally called on members of the administrative committee to resign if they showed contempt for its democratic decisions and breached its code of conduct.

“To succeed we must win the confidence of the people of Victoria. To win we must bring an end to the persistent internal disputation and arguments which are so often reported in the media, creating the public perception of disunity,” Davis wrote in the message to members.

The Federal Court in December found that Pesutto repeatedly falsely implied MP Moira Deeming was a Nazi sympathiser in 2023, ordering him to pay damages plus $2.3 million of her legal costs.

The 19-member administrative committee in June voted to lend Pesutto $1.55 million, via its investment company, Vapold, to ensure he could cover Deeming’s legal costs. The decision spared him bankruptcy and a byelection in his marginal seat of Hawthorn, and neutered the risk of other MPs and former premiers who donated to his defence being chased for costs.

The loan was set at a commercial variable interest rate.

But five members of the committee – Colleen Harkin, Erin Hunt, Anthony Schneider, Ian Pugh and Marcus Li – are challenging the validity of the loan in the Supreme Court, arguing it would constitute a “benefit” in breach of the party’s constitution.

Davis described the proceeding as “a gift for our political opponents” and diverting party resources.

The statement of claim, filed last month, asserted that the meeting was in bad faith.

It said the vote was conducted by secret ballot rather than a show of hands; that committee members did not have details before the meeting or proper time to consider it; that the motions were not recorded in writing; that ballots were counted away from the committee members with no scrutineer; and that the split was never announced despite a request for the count.

Several party members, speaking anonymously to be frank about internal issues, view the court challenge as a political manoeuvre to pressure Davis’ position as state president. Two of Davis’ internal opponents said the memo showed he was under pressure given he is facing a challenge from former state president Greg Mirabella at next month’s state council. They view the loan process as flawed and lacking transparency.

Davis said it was a furphy that the outcome of the meeting was predetermined, given “highly active lobbying from interested parties” and since all members received an agenda in advance.

The statement of claim from the five aggrieved members said the agenda only said, “request from member for Hawthorn”.

Davis, in his memo, said he had witnessed “the best and worst” of politics in the last few weeks. He said the committee members who disagreed with the democratic decision were reneging on their obligations to the party.

“The loan to Mr Pesutto is just another investment in the asset portfolio, generating a return which will be used for the benefit of the party ... Suggestions which have been made to the effect that the loan was undocumented or uncertain in its terms are simply false,” Davis wrote.

He claimed one member had taken a confidential document from the meeting in breach of the code of conduct and had used it in the litigation without preserving its confidentiality, in a reference to lead plaintiff Harkin, though he did not name her.

“These members who have shown contempt for the majority decisions of the committee, and are unable to comply with the code, should resign as members of the committee as set out in the code,” Davis wrote.

Harkin was contacted on Monday.

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