Victorian Liberals prepare last-minute bid to bail out John Pesutto with loan to help pay $2.3m defamation costs
Victorian Liberal party officials are preparing a last minute proposal for the state division to loan former leader John Pesutto enough money to pay the $2.3m in legal costs he owes to Moira Deeming.
The proposal, according to multiple Liberal sources, will need to be presented to the party's 19-member administrative wing in order to be approved. But so far, no meeting has been called to discuss the loan and its terms, which have not been finalised.
The loan may be partly funded by the Cormack Foundation, the state party's multimillion-dollar investment vehicle, which has so far been reluctant to support Pesutto as it is not allowed to provide financial assistance to individuals.
The proposal is expected to be discussed by senior members of the administrative wing at a regular meeting on Wednesday evening, according to one Liberal source, who expected this discussion would then lead to a broader meeting of all 19 members.
Earlier this month, Pesutto was ordered to pay $2.3m of Deeming's legal costs after it was found he repeatedly defamed Deeming by falsely implying she sympathised with neo-Nazis and white supremacists in December.
Sources close to Pesutto say the former opposition leader has so far raised roughly one-third of the costs order. Pesutto has already paid Deeming $300,000 in damages plus $15,000 in interest.
The former Liberal leader's supporters have been privately lobbying donors for money and trying to raise cash through a GoFundMe page. So far, that page has generated $185,000.
They remain hopeful a loan from the party may not be necessary.
Deeming has flagged she intends to serve a bankruptcy notice on Friday if her costs remain outstanding, leaving Pesutto a further three weeks to pay.
If he misses that deadline, Deeming's solicitor, Patrick George, has indicated they will seek to recover costs from third parties - and will apply for subpoenas to compel Pesutto to disclose communications with his donors.
A letter from George seen by Guardian Australia indicates they would seek to recoup costs from former Liberal premiers Ted Baillieu, Denis Napthine and Jeff Kennett. The letter also mentions Charles Gillies, the former chair of the Liberal Party's fundraising arm Enterprise Victoria, Liberal MPs David Southwick and Georgie Crozier, former MP Margaret Fitzherbert, developer Jason Yeap and Pesutto's former staffer Xavier Boffa.
'We request that Mr Pesutto retain, and confirm he has retained, all records relating to these donations including, without being exhaustive, the agreement of these persons to donate to or fund his defence of the proceedings,' the letter said.
The letter requested Pesutto retain 'all records relating to the information he provided to them about the proceedings'.
Opposition leader, Brad Battin, faced increased pressure on Wednesday to publicly intervene to resolve the saga.
'Every conversation I have with Cormack or the party will remain confidential,' Battin said.
He insisted the party room was united but urged MPs to 'stick on message'.
Kennett, who is named in the letter and is a key supporter of Pesutto, told the ABC he was not concerned about it, but he reflected on the damage the saga was doing to the state division.
'I can't imagine what it's like to be in that party room. It is a cesspool,'' he told the ABC.
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