Australian PM and treasurer reject calls to quit

Sunday, June 21, 2009 at 4:18 AM Posted by Beijing News


CANBERRA, Australia – Australia's Prime Minister Kevin Rudd and his treasurer are rejecting opposition calls to resign over their relationship with a car dealer which commentators say has created the 19-month-old government's biggest political crisis.

Opposition Leader Malcolm Turnbull said Saturday that Rudd and Treasurer Wayne Swan repeatedly misled Parliament this month when they denied that Rudd's friend, car dealer John Grant, had been given special attention when he applied for a government loan to cope with the global credit crunch.

Turnbull said Rudd and Swan had no choice but to resign.

Swan said Sunday he would not.

Rudd maintains that he did not mislead Parliament and said Saturday that Swan had "acted entirely appropriately."

The accusation that the government does favors for its political friends is damaging for Rudd, who is halfway through his first three-year term. The controversy will likely dominate Parliament when it resumes Monday for a final week before a six-week break.

Turnbull cited an e-mail published in News Corp. newspapers in Australia on Saturday that was purportedly a request by a Rudd staffer in February for Treasury officials to give priority to Grant's credit request.

But the government claims the e-mail is a forgery created by Turnbull's Liberal Party and has called in police to conduct a fraud investigation. Turnbull has denied his party faked the e-mail.

Swan said on Sunday he stood by his claim that Grant's request for government credit was treated no differently than that of any other car dealer as their usual sources of credit to buy cars dried up.

"I regard this as part of the smear campaign that has been conducted against the prime minister and myself by the leader of the opposition, and it's time for him to put up evidence or shut up and resign," Swan told Nine Network television.

Grant, who gave Rudd a secondhand pickup truck to use for campaigning and once sold Swan a car, never received a loan from a 2 billion Australian dollar $1.6 billion government fund set up as a last resort for car dealers struggling to access credit.

Rudd told Parliament this month that no one in his office made any representation to the Treasury, which runs the fund, on Grant's behalf.

But the fund manager, Godwin Grech, told a Senate inquiry on Friday that he recalled being first alerted to Grant's case by an e-mail from Rudd's office.

Grech said he could find no record of such an e-mail and conceded that his recollection could be wrong.

Rudd has now ordered a government inquiry into claims that his office corresponded with the Treasury on Grant's behalf.

The Senate inquiry on Friday heard evidence that copies of e-mails concerning Grant's finance application were sent by the Treasury to Swan's home fax. Swan maintained Sunday that Grant did not receive special attention.

Media analysts agree that without irrefutable evidence that Rudd misled Parliament, his position appears safer than Swan's.

"If there is no other e-mail, there possibly could be a conflation" that had distorted Grech's recollection, Delaney told the network.





REUTERS/Eddie Keogh

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