In an opinion piece, “Lingering riddle of big Rex's downfall,” in the Daily Telegraph (2/2/06), Malcolm Farr asked the question: who misled whom in 1975 - Whitlam or Connor?
The official line was that Rex Connor had been forced to resign as minister for minerals and energy because he had disobeyed an instruction to cease negotiations for a huge loan, and had misled Prime Minister Gough Whitlam who then had inadvertently misled parliament.
This became the “reprehensible” behaviour which Malcolm Fraser had earlier warned would compel him to use the senate to deny supply. This would trigger the early election which Gough Whitlam and Lionel Murphy had long and often argued was constitutionally mandated.
The loans affair had involved the government in extraordinary negotiations with one Tirath Khemlani, whom Farr describes as a “shifty” Pakistani who worked “on the fringes of respectable money-raising”, and who was subsequently jailed for financial crime in the US.
It was beyond any rational understanding why the government avoided all legitimate avenues for such massive long term fund-raising for development purposes. The reason may have been in Attorney General Lionel Murphy’s notorious legal advice that the loan was for “short-term purposes”. This was to avoid Loan Council involvement, where the states would be involved. Going through a carpetbagger may have been seen as another way of ensuring that the states could not be involved.
The annual release of the relevant Cabinet papers under the 30-year rule should have thrown some light on these events. However, this is obfuscated by the increasingly bizarre practice of the National Archives Authority to turn this event into a platform for yet another of Mr E.G. Whitlam’s unpersuasive apologiae for the behaviour of what John Stone has called the worst and most incompetent government ever elected.
This is the third year in a row that the archives have allowed Mr Whitlam to demonstrate his undoubted thespian abilities.
As Ian Moore says in The Australian, (3/1/06), “Documents must speak for themselves”. This does “nothing to assert the objectivity of the presentation or provide an independent view of contemporary political history. Whitlam, however, managed to put us straight on one thing. If he was delusional in 1975, the condition remains untreated.”
The original approval for the borrowings was given, as Sir David Smith says, at an “irregular and possibly invalid” meeting of the Federal Executive Council on December 13, 1974 held in the absence of the governor-general. Sir David believes the planning for the meeting was kept from the governor-general.
This meeting and its extraordinary aftermath was the subject of a piece in The Australian (2/1/06) by John Stone, "Trials and tribulations of our worst cabinet".
He points out that the original amount of the proposed borrowing, $US4 billion, exceeded the then combined foreign debt of all Australian governments.
He reminds us of the obvious fact, which seems to have escaped the ministers, that you could not place any such authorisation in the hands of “a creature such as Khemlani” without international banks soon seeing it shopped around the world.
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