IBAC hears Kairouz paid $60,000 for ALP members, as MP spared public grilling

Former Victorian government minister Marlene Kairouz has avoided giving evidence in public due to concerns for her welfare after allegations emerged during a corruption inquiry that the MP paid for $60,000 worth of Labor memberships.

The member for Koroit, who resigned from cabinet last year amid branch-stacking allegations in Victorian Labor, is accused of paying for more than $60,000 in memberships for other people over five years between 2015 and 2020, in a scheme to increase her power base and that of her factional allies.

Victorian Labor MP Marlene Kairouz was charged with branch stacking offences by the party, which she has denied.Credit:Eddie Jim

But the still-sitting MP has been granted a private examination before the Independent Broad-based Anti-corruption Commission inquiry this week, even as the electorate officers who worked for her faced public hearings.

Counsel assisting the inquiry Chris Carr, SC, said there was significant public interest in “her answers being available to the public”, but the commission received “credible evidence” of concern for Ms Kairouz’s wellbeing.

Ms Kairouz asked for mental health leave from her duties as an MP last month, following the death of her sister.

Mr Carr said the commission can hold public hearings if four conditions are met: exceptional circumstances; if it’s in the public interest; that serious or systemic corrupt conduct is involved; and, if a public examination does not cause unreasonable damage to a person’s safety or wellbeing.

“For that reason, even though the other criteria are satisfied, the commission does not have the statutory power to examine Ms Kairouz in public,” Mr Carr said.

The hearings, a part of the Operation Watts investigation into allegations of corrupt conduct involving Victorian public officers, including members of Parliament, will continue in private until next Monday.

On Wednesday, the inquiry heard accusations of a systematic branch-stacking operation run out of Ms Kairouz’s electorate office.

The alleged conduct involved staffers forging signatures of members to cast votes on their behalf either without them knowing or caring.

Electoral officer Kirsten Psaila before IBAC’s Operation Watts public examination on Wednesday.

The operation funnelled votes towards MPs including Ms Kairouz and her ally Adem Somyurek, the former powerbroker in Labor’s “Moderates” faction.

Mr Carr said Ms Kairouz transferred the $60,000 to her electorate office manager, Kirsten Psaila, to pay for other people’s memberships.

“Do you accept that? … and that was for memberships,” Mr Carr said.

“If that’s what you’ve got, then yes,” Ms Psaila responded.

Over hours of questioning, Ms Psaila finally accepted the act of paying for other people’s memberships was not the “benevolent act” of an MP helping out people who were financially struggling.

“It was because by paying that … Ms Kairouz would obtain power within the party,” Mr Carr said.

“Yes,” Ms Psaila replied.

Mr Carr said former members had told the commission they had no idea they still belonged to the party, while others have sworn evidence that they did not recognise documents or ballot papers signed in their names.

Counsel assisting the IBAC inquiry Chris Carr, SC.

Mr Carr said the whole point was for MPs to gain power, in a process that corroded the moral compass of all involved.

“What happens is by the time people get into power, the time they become MPs, they’ve been exposed to this sort of conduct or if they’re engaged in or supervising this conduct as MPs, they’re unlikely to bring a strong moral compass to their parliamentary duties are they?” Mr Carr asked.

Ms Psaila said Ms Kairouz was a “stand-up MP” who did what she could for the community.

“That may be so, but she’s administered part of this corrosive and corruptive factional machinery, hasn’t she?” Mr Carr asked.

“They all have,” Ms Psaila said.

Ms Kairouz was contacted for comment. The government has refused to respond to specific allegations raised in the inquiry while it is ongoing.

Ms Kairouz is the second key witness to have been excused from giving evidence in public on medical grounds.

Dr Hussein Haraco was deemed unfit to give evidence the day before he was due to appear after he was accused of pocketing almost $75,000 in a taxpayer grant intended for the Somali Australian Council of Victoria, a community organisation he founded.

Ms Kairouz, who has been charged with breaching party rules by branch stacking, has denied the allegations.

Branch stacking is not illegal, but is a breach of party rules.

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