New inquiry into conduct of George Brandis

Attorney-General George Brandis faces the second inquiry within months into his conduct, after the Senate voted 36-29 to refer the Bell Group affair to a committee.

Labor, the Greens, and six of the non-Green crossbenchers voted for the inquiry. The latter were the three Nick Xenophon Team senators, Jacqui Lambie, Derryn Hinch and One Nation’s Rod Culleton. Culleton broke with fellow One Nation senators who voted with the government against the reference, as did Liberal Democrat David Leyonhjelm.

The inquiry, by the legal and constitutional affairs references committee, will look at the nature and scope of any agreement between the federal and Western Australian governments on the distribution of proceeds of the liquidation of, and litigation concerning, the Bell Group.

The West Australian newspaper reported on Friday that there had been a secret deal between the two governments to let WA retrieve, via its special state legislation, A$1 billion from the collapsed Bell Group.

But the deal had been torpedoed by a constitutional argument advanced by the then-solicitor-general, Justin Gleeson, in a High Court case that other creditors had brought on the legislation, the paper said. Gleeson appeared on behalf of the Australian Taxation Office (ATO). The ATO was seeking to retrieve $300 million.

The paper reported that a senior federal source had told it Brandis had instructed Gleeson not to run the particular argument. But Gleeson did so and the WA legislation was declared unconstitutional. Brandis will not say whether he told Gleeson not to run a particular argument.

In Question Time, Prime Minister Malcolm Turnbull again refused to be drawn on what Brandis’ instructions to Gleeson had been.

Brandis told the Senate this week that former treasurer Joe Hockey had undertaken the discussions last year about the planned WA legislation to end the decades-long legal proceedings over the Bell Group’s insolvency process. But he denied this amounted to a deal, although the WA government thought there was one.

The Senate motion directs Brandis and Finance Minister Mathias Cormann to appear before the committee. It will be up to the committee whether it decides to call Hockey and Gleeson.

The Greens’ Nick McKim, who seconded Labor’s motion for the inquiry, said he believed it should invite Hockey to appear.

“There is every chance he would be quite keen to give evidence – because he’s been thrown under a bus by Brandis and may want to set the record straight,” McKim said.

It is understood that the committee would not be able to compel Hockey, who is Australia’s ambassador in Washington, to appear because he is out of reach of Australian law.

McKim said he also believed the committee should invite Gleeson to give evidence.

The inquiry, to report by March 21, will report on:

• the priority order for distribution of the proceeds of the liquidation;

• the Commonwealth’s position in relation to the distribution of, and litigation concerning, the proceeds;

• any connection between these matters and the settlement of other disputes between the federal and WA governments, including the distribution of GST revenue between the states;

• any direction or instruction given by Brandis to Gleeson, either directly or through his office or department, in relation to the conduct of litigation about the proceeds; and

• any connection between these matters and Brandis’s issuing of the legal services direction to Gleeson specifying that future requests to him to provide legal advice must go through Brandis’ office.

The majority report of an earlier Senate inquiry into Brandis’ issuing of the direction – which was strongly attacked by Gleeson – was very critical of Brandis and said the direction should be disallowed. Brandis pre-empted this by scrapping the direction.

Gleeson resigned before the end of the inquiry, saying relations between him and Brandis were “irretrievably broken”.

The latest controversy surrounding Brandis has re-ignited speculation that he might leave politics, which would pave the way for a reshuffle. Turnbull palmed off a reporter’s question asking whether he was planning a reshuffle, describing it as “a ritual one always asked of prime ministers at this time of year”.