Vic minister resigns over stacking claims

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Victorian minister Luke Donnellan has resigned from cabinet after an anti-corruption inquiry heard he was involved in "out of control" branch stacking.

Federal MP Anthony Byrne on Monday told an Independent Broad-based Anti-corruption Commission inquiry that both he and Mr Donnellan paid other people's Labor memberships, in a breach of party rules.

In a statement, Mr Donnellan, who held the portfolios of child protection, ageing, disability and carers, confirmed he "breached party rules while a minister".

"But let me be very clear: I never misused public funds or resources in any way. And this has absolutely nothing to do with my staff," he said.

"However, I don't believe it is possible or appropriate to maintain my ministerial responsibilities given these rule breaches. The work to support vulnerable Victorians is too important, especially during the pandemic."

Premier Daniel Andrews thanked Mr Donnellan, describing him as a "passionate advocate for vulnerable kids, people with disability and older Victorians", who leaves "a legacy of reform of which he can be proud".

"Due to inquiries currently on foot, I will not be making further comment," Mr Andrews said in a statement.

Late on Monday the premier said ministers James Merlino and Richard Wynne had been sworn in to take on Mr Donnellan's portfolios in the short term.

"Broader changes to the ministry will be made at a later date," Mr Andrews said.

Mr Donnellan is the fourth cabinet minister to resign over the branch-stacking scandal, exposed by 60 Minutes and The Age in 2020.

The expose featured secretly recorded videos of then-Labor powerbroker Adem Somyurek, filmed in Mr Byrne's Holt electorate office in Melbourne's outer southeast.

The duo were close allies and in Labor's moderate faction but fell out in 2019, due to Mr Byrne's branch-stacking concerns.

"The party was completely out of control. I saw things and heard things that I didn't think I'd ever see in a modern Labor party," he told the IBAC inquiry.

"I'm referring to branch stacking. I'm referring to coercion of staff being made to do things they didn't want to do.

"The party (was) being taken over by one person whose sole objective was power and power alone."

Asked by counsel assisting the inquiry Chris Carr SC who he meant, Mr Byrne replied: "Adem Somyurek".

He said he observed Mr Somyurek and state Labor MP Marlene Kairouz coercing taxpayer-funded staff to do factional work "at all hours".

According to Mr Byrne, Mr Somyurek threatened to "take people out" of pre-selections, including minister Gabrielle Williams and Cranbourne MP Pauline Richards, and reward others for their stacking efforts, including the upper house's Kaushaliya Vaghela.

Branch stacking involves recruiting or signing up members to a political party's local branch to influence candidate pre-selections.

It is not illegal, but is against Labor Party rules to pay for other's memberships.

Mr Byrne admitted to paying other's memberships since he was elected in 1999.

He said he spent about $10,000 in the past five years on membership renewals, while cash from Labor Party fundraisers went into a "kitty" kept in his office and used for the same purposes.

Mr Byrne said Mr Donnellan and Mr Somyurek would have spent "roughly the same amount, perhaps more in the past couple of years".

Asked if Labor head office turned a blind eye to the branch stacking, Mr Byrne replied: "I don't know if I would say blind eye ... I would say felt powerless to stop it."

IBAC Commissioner Robert Redlich said despite a review into the practice in the 1990s and an ombudsman's report in 2018 which found the Labor party misused taxpayer funds, "nothing seems to have altered".

"People believed regardless of what the rules said that they could game the system," Mr Byrne replied.

Mr Somyurek left Labor before he was expelled last year but retained his upper house seat, while his factional allies Ms Kairouz and Robin Scott resigned from cabinet. All three deny stacking allegations.

The scandal prompted reform of the Victorian Labor Party, including the expulsion of about 1800 "non-genuine" members and the suspension of voting rights until 2023.

The IBAC hearings, part of a joint investigation with the Victorian Ombudsman dubbed Operation Watts, are expected to continue for five weeks.

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