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Premier Daniel Andrews claims he only found out through a news report that Victorian Labor MPs were misusing taxpayer resources.
In June 2020, the Nine Network aired allegations Labor moderate faction powerbroker Adem Somyurek handed over cash and used parliamentary employees to create fake branch members.
That led to Operation Watts, an inquiry by the Independent Broad-based Anti-corruption Commission and Victorian Ombudsman into Victorian Labor's branch stacking scheme.
The watchdogs' report on the operation, released on Wednesday, found there was an extensive and "egregious" misuse of taxpayer resources within the Victorian Labor party.
It also revealed Mr Andrews gave evidence in secret hearings to the inquiry that he was aware in a "general sense" of a branch stacking scheme in the party.
But the premier said he first heard about the inappropriate practices through the Nine Network report.
"As soon as we became aware of this unprecedented, shameful, disgraceful behaviour, we took action. I took action.That's a matter of record," he told reporters on Wednesday.
"If I had known what we became aware of on that Sunday evening and in Age commentary in the days thereafter any sooner, then I would have acted sooner."
But according to the Operation Watts report, Mr Andrews told the inquiry he was aware of what became known as the Red Shirts rorts.
That scandal involved the misuse of taxpayer funded staff for campaign purposes ahead of the 2014 election and was subject to a separate ombudsman investigation finalised in 2018.
Mr Andrews told the investigation he knew what fellow MP John Lenders - the architect of the scheme - was proposing to do "in a general sense".
"I was aware that it was about engaging staff to be involved in campaigning," he said.
"At no point did I have a sense that what was being proposed was not in accordance with the rules or advice from Parliamentary Services.
"My memory of it is that it was - pooling arrangements have been part of parliamentary parties for quite some time, our party and others."
Mr Somyurek told the inquiry he took part in the Red Shirts scheme after speaking to Mr Andrews in 2014.
He alleged Mr Andrews responded with "words to the effect, 'Well, you're either going to - you know, if you want to win an election or not'."
Mr Andrews accepted he had a "very brief encounter" with Mr Somyurek after a caucus meeting, but denied making any reference to winning an election, saying "that's not language that I use," in his evidence.
The Ombudsman and IBAC on Wednesday determined no Victorian Labor MPs would be criminally charged despite evidence of deliberate, extensive and egregious use of taxpayer resources for political gain.
The watchdogs' report made 21 recommendations, including legislating a parliamentary ethics committee, which the Victorian government has accepted.
IBAC Commissioner Robert Redlich said the changes needed to come from the top.
"According to some of the evidence, the culture of branch stacking is at least 70 years old. It's a long standing practice," Mr Redlich told reporters on Wednesday.
"The responsibly for that must lie with leadership. The responsibility for misconduct, misuse of electoral allowances, is a different matter."