Liberal Party Loans $1.55M to Save Pesutto from Bankruptcy
In a dramatic financial and political twist, the Victorian Liberal Party has stepped in to shield its former leader, John Pesutto, from bankruptcy by extending a $1.55 million loan. This move comes amid growing fears that his financial troubles could have led to a politically damaging by-election in the marginal seat of Hawthorn. Pesutto, previously the Opposition Leader, faced mounting pressure following a costly legal battle.
Loan Covers Legal Settlement to Avoid Political Fallout
The party’s administrative committee made the unanimous decision during a Thursday night meeting, agreeing to pay the settlement directly to MP Moira Deeming on Pesutto’s behalf. However, the loan won’t come without strings—Pesutto is obligated to repay the full amount with market-rate interest.
Defamation Case Left Pesutto Facing Millions in Debt
The court had previously ordered Pesutto to pay Deeming $2.3 million in legal costs after it ruled he had defamed her by implying associations with neo-Nazi groups. He had already paid $315,000 in damages, but with only $750,000 raised from private backers and a GoFundMe, the remaining debt threatened to force him out of parliament.
Party Emphasizes Political Necessity in Member Letter
Victorian Liberal president Philip Davis communicated the decision in a letter to party members, emphasizing that avoiding a by-election was a key reason behind the financial intervention. “The outcome ensures no by-election in Hawthorn,” Davis wrote, highlighting the political risk at stake.
Deeming Rejected Prior Deal Including Leadership Concessions
Deeming, a first-term MP who was once expelled from the party room but later reinstated, rejected a prior settlement offer. That offer would have seen part of the debt deferred in exchange for guaranteed preselection and a commitment from Pesutto not to seek leadership for three years.
Deeming Questions Motives Behind Party Support
Despite the payment, Deeming remains sceptical of the party’s intentions. “I assume that they will continue with their quest to try to annihilate me,” she said Thursday, interpreting the party’s support for Pesutto as a “direct rebukement” of the Federal Court’s judgment in her favor.
Leadership Fractures Persist Amid Internal Scrutiny
Brad Battin, the current Opposition Leader who succeeded Pesutto, also came under internal scrutiny during the committee meeting. Although Battin attended, he declined to reveal how he voted, further fueling speculation about lingering divisions within the party.
Scandal Highlights Ongoing Instability in Victorian Liberals
The scandal has rocked the Victorian Liberals since March 2023, highlighting ongoing internal rifts and leadership instability. With the financial safety net now extended to Pesutto, the party may avoid immediate political fallout—but tensions appear far from settled.
Liberal Party Faces Long-Term Questions on Ethics and Unity
This latest move underscores the high stakes and deep fractures within the state’s conservative leadership. While Pesutto avoids personal bankruptcy, the Victorian Liberal Party now faces intensified scrutiny over its unity, legal strategies, and financial ethics.
