The police fraud squad is investigating allegations former Victorian Liberal Party state director Damien Mantach embezzled around $1.5 million of election campaign funds.
The money is alleged to have vanished over four years to fund Mr Mantach’s lifestyle.
An audit of the party’s finances after last year’s state election loss uncovered unauthorised financial transactions linked to Mr Mantach, with money missing from both state and federal campaign funds.
The Victoria Police fraud and extortion squad has been called in to investigate.
Liberal Party president Michael Kroger said Mr Mantach had admitted to wrongdoing.
“We feel profoundly betrayed and terribly disappointed with what’s happened,” Mr Kroger said.
- Liberal Party accuses former state director of embezzling $1.5m
- Alleged theft happened over four years
- Victoria Police fraud and extortion squad called in to investigate
- Party believes Mantach took the money to fund his lifestyle
He said the party believed Mr Mantach had acted alone.
“We’re not aware that anyone at the party head office or any officials had any involvement at all,” he said.
It also emerged that Mr Mantach repaid tens of thousands of dollars during his time as state director of the Tasmanian branch.
In a letter to members posted on Facebook, Tasmanian Liberal president Geoff Page said in March 2008 that when he left the role, Mr Mantach fully repaid a liability of nearly $48,000 for personal expenses.
Mr Page said the division considered the matter closed and had robust internal financial processes.
Mr Kroger said he did not believe the missing money influenced the 2014 election result, or that it would affect the next federal election.
Liberal leader Matthew Guy said the party was furious at what he called a “pretty basic effort at embezzlement”.
“We want our money back,” he said.
“We want this matter sent to the police and we will be doing everything we can to ensure that justice is done.
“I saw someone making a comment that we’re white hot with anger, that’s just the start of it.”
Mr Kroger said the missing money was confined to the party’s Victorian division and he was confident some of it could be recovered through assets bought with the funds.
Mr Kroger conceded the Liberal Party had failed to properly monitor spending.
“Obviously it should have been picked up years ago — it wasn’t,” he said.
Former premier Denis Napthine, who led the party during last year’s campaign, said he was surprised and bitterly disappointed by the allegations.
The party’s administrative committee met this morning to discuss how to deal with the missing money.
Mr Mantach has been contacted for comment.
Australian Broadcasting Corporation
Victoria’s Liberal Party has been blind-sided by claims a former Director stole $1.5 million of funds with the fraud squad investigating allegations and branch members asking if other financial dealings are suspect.
SABRA LANE, PRESENTER: Victoria’s Liberal Party has been blindsided by allegations its former director stole $1.5 million of party funds.
The party believes Damian Mantach siphoned off the money using fake invoices and Victoria police is now investigating.
Liberal politicians are furious and say the loss is a slap in the face to party members.
Late today, the Tasmanian Liberal Party confirmed Mr Mantach had to repay tens of thousands of dollars in personal expenses he racked up while director of that state’s party.
Madeleine Morris reports.
LIBERAL PARTY MEMBER: We’re white hot with anger. That’s just the start of it.
DENIS NAPTHINE, FORMER VICTORIAN PREMIER: I’m surprised, I’m shocked, I’m bitterly disappointed.
MADELEINE MORRIS, REPORTER: Sombre-faced and genuinely shocked, Victorian Liberal MPs arrived this morning to be briefed on the alleged theft of $1.5 million by one of their own.
LIBERAL PARTY MEMBER II: We just want to get to the truth and the bottom of the matter.
MICHAEL KROGER, LIBERAL PARTY VIC. BRANCH: Good morning, everybody. Well as you know, the Liberal Party is today referring some matters to the Victoria Police relating to the unauthorised removal of some party funds from the party head office, solely the work of one person. It should’ve been detected a long time ago. It wasn’t, which is regrettable. And the party’s obviously gonna make sure that this never happens again.
MADELEINE MORRIS: That person is Damien Mantach, the Victorian Liberal Party’s state director until March this year. The party believes that over a period of four years, Damien Mantach siphoned off money from Victorian Liberal headquarters via fake invoices for fake work.
The irregularities were uncovered when new state Liberal president Michael Kroger ordered a forensic audit of the accounts when he took over after last year’s disastrous state election.
NICK ECONOMOU, POLITICAL ANALYST: The state Liberal Party is in a bit of trouble and it’s been subject to a great deal of internal tension. There’d been problems within the parliamentary wing of the party. That contributed of course to the Liberals’ defeat at the last state election. And we also know that there were all sorts of tensions in the party organisation, the party membership.
DENIS NAPTHINE: I’m absolutely devastated, but particularly for the candidates across the state of Victoria who worked extremely hard, for the Liberal Party members and volunteers who worked extremely hard. This is a real shock to all of us.
MADELEINE MORRIS: That includes Angelo Kakouros, chair of the party’s South Barwon branch. He’s been fielding calls from party members all day.
ANGELO KAKOUROS, CHAIR, LIBERAL PARTY SOUTH BARWON BRANCH: It is a lack of trust and great, great disappointment.
MADELEINE MORRIS: But Mr Kakouros says his branch has been worried about the former state director for some time.
ANGELO KAKOUROS: I’ve had concerns with Damien Mantach for the last three to four years as a state director and personal experience and just the way things have operated and the communication between Damien, the administrative committee and some of the people within the organisation with their communication here locally in our area.
NICK ECONOMOU: It’s a very, very big task to try and keep track of what’s going on and to keep paid full-time officials answerable and accountable in what is essentially a voluntary organisation. The state treasurer of the Liberal Party would be a volunteer after all. Now, on top of this we’re getting increasing regulation to try and regulate the flow of donations. … But I suspect that that may be encouraging clever people to be a bit tricky here and try and find ways to squirrel resources away.
MADELEINE MORRIS: Today, Michael Kroger admitted there was a systemic problem with the Liberal Party accounting and changes were being made.
MICHAEL KROGER: More people in the accounting section and different oversights in relation to levels of authorised expenditure and a greater role for the party finance committee and more attention on these matters by the party executive.
MADELEINE MORRIS: It’s not the first time Damien Mantach has been in the headlines. Two years ago, he was investigated and ultimately cleared over payments he authorised to a former Liberal staffer who quit after being implicated in a scandal that snared the Police Minister.
And late today, the Tasmanian branch of the Liberal Party confirmed Mr Mantach had to repay nearly $48,000 in personal expenses when he was Tasmanian branch state director.
The fallout today extended all the way from Spring Street to Canberra.
BRENDAN O’CONNOR, FEDERAL LABOR MP: In 2013 the Prime Minister said, and I quote, “I know Damien Mantach well. He’s a person of integrity. So let’s see where this investigation goes. He has my confidence.” Does the Prime Minister agree that this ringing endorsement is yet another failure of judgment on his part?
TONY ABBOTT, PRIME MINISTER: But I can inform the House that matters concerning the individual in question have this morning been referred to the Victorian Police.
MADELEINE MORRIS: Today, no answer at the Mantach family home and Damien Mantach couldn’t be reached on the phone.
There is palpable shock here in Victoria that this could’ve happened to the party which prides itself on good financial management, particularly amongst Liberal rank and file. One branch chair told me it was like finding out the priest had been stealing from the collection plate. But there’s also relief it’s been uncovered by the party’s new state leadership.
ANGELO KAKOUROS: Michael Kroger, the state president, he’s doing a fantastic job in order to bring honesty and transparency back into the party.
MADELEINE MORRIS: The impact for the party may yet be felt in the place it will hurt most: the coffers.
NICK ECONOMOU: The Liberal Party really does rely heavily on membership fees and donations, so I think something that might damage the reputation of the party’s fundraising ability could be really seriously damaging to the Liberal Party.
LIBERAL PARTY MEMBER III: I think this is simply a matter of we’ve been robbed. We want our money back and we want justice done. Police will investigate and i think that’s all I should say at this point in time.
SABRA LANE: Madeleine Morris reporting.
Rachael Brown reported this story on Thursday, August 20, 2015 12:20:47
ELEANOR HALL: Let’s go now to Victoria where that state’s branch of the Liberal Party is having some trouble of its own.
The Liberal leader Matthew Guy has accused the former state director of the Victorian Liberal Party, Damien Mantach, of embezzling $1.5 million in the election campaign funds.
Mr Guy says his party is “white hot” with anger, and that the funds could’ve made a difference in last year’s election.
In Melbourne, Rachael Brown reports.
RACHAEL BROWN: The Liberal Party says discrepancies were uncovered during a forensic audit of the party’s funds after last year’s state election loss.
The party’s former state director Damien Mantach is being accused of stealing $1.5 million over four years, but the audit continues.
Mr Mantach has not responded to the ABC’s calls.
Liberal party members were called into a crisis meeting this morning, and heading in, the party leader Matthew Guy made no attempt to mask his feelings.
MATTHEW GUY: We are furious; we want our money back.
RACHAEL BROWN: The matter has been referred to the Victoria Police Fraud and Extortion Squad, which says it’s investigating the disappearance of funds, but can’t comment further.
Mr Guy says, if the allegations prove true, it’s a massive betrayal of trust.
MATTHEW GUY: An enormous part of our election war chest, enormous. People did a lot of work to get that. I mean, we have a fundraising team who’ve done a huge amount of work; they’re always under a lot of scrutiny as you can imagine, and a lot of pressure.
But they’ve done a huge amount of work. We’ve got a lot of supporters, a lot of branch people who have worked their guts out for this party. And for what it appears to be one individual to do this to us leaves us bitterly cold.
RACHAEL BROWN: The Liberal party leader says the funds could’ve changed last year’s election result, which saw Labor’s Daniel Andrews dismissing the Napthine Coalition government.
Denis Napthine, who led the Victoria’s first one-term government in 60 years, says the fraud allegation is shocking and bitterly disappointing.
The party’s new president, Michael Kroger, has released a statement saying, when the audit turned up suspicious transactions amounting to $1.5 million between 2010 and 2014, Damien Mantach was asked to explain himself.
It was after this discussion that the party’s administrative committee voted to refer the matter to police.
Mr Kroger admits there’s a weakness with the Liberal Party’s checks and balances.
MICHAEL KROGER: Yeah, well on this occasion they clearly failed. So yep, quite up front about that. I’ve only been in the job four months, as you know. This has been going on for four years, so you know, it should have been picked up before and wasn’t, unfortunately.
RACHAEL BROWN: But he says there won’t be a clean out of branch holders, that the alleged fraud didn’t extend to other employees, officials or office bearers, and was limited to the party’s Melbourne headquarters.
He says civil action hasn’t been decided on.
MICHAEL KROGER: We’re sensitive to a number of issues, including the fact the person involved has a wife and family, and there are other matters which we want to take into account. But yes, we’ll be recovering a good deal of the funds in a cooperative relationship with the person involved.
RACHAEL BROWN: Mr Kroger says he doesn’t know where the money’s gone.
And he’s hit back at a suggestion that this is in a similar vein to the trade union boss Kathy Jackson being forced to repay $1.4 million of misappropriated members’ funds.
MICHAEL KROGER: When the Liberal party becomes aware of a serious matter like this, what do we do?
We investigate it quickly, we report it to the appropriate authorities, who in this case will be the Victoria Police. We don’t hide it; we don’t ignore it; we deal with it.
On the other hand, it’s taken a royal commission at massive public expense bringing these union and Labor leaders kicking and screaming before the public to get any type of information from them at all, at massive public expense. And even now they want to sack the umpire.
RACHAEL BROWN: One commentator has told The World Today that there might be more to this than meets the eye.
Damian Mantach stepped down from the director’s job in March. A couple of years ago he was one of the senior Liberals secretly recorded during the police command crisis that led to Ted Baillieu resigning as premier.
The commentator says this audit and slur on a former power player in the executive committee might have more to do with the ongoing power struggle and factional rifts at the upper levels of the Victorian Liberal party.
ELEANOR HALL: Rachael Brown with that report.