Rex Connor - the other dismissal

Whitlam supporters are fond of anniversaries, especially November 11, 1975. There is another they should add to their pantheon - Whitlam’s dismissal of Rex Connor, his Minister for Minerals and Energy, on October 14, 1975, allegedly because Connor had misled Whitlam, thus causing Whitlam to mislead the Parliament. I say allegedly, because there is evidence which suggests that the truth may have been different.

The loans affair saw the Whitlam Government try to raise billions of dollars in overseas loan through a Pakistani money dealer, Tirath Khemlani. The late Alan Reid, arguably the doyen of the parliamentary press gallery in Canberra at the time, described the loans affair as “the death warrant of the Whitlam ALP government”.

Rex Connor was a big man with big ideas for Australia. He had a grand plan for a resources and infrastructure program that would require massive funding. He spurned the normal means of raising such funding overseas through regular financial institutions in New York, ignored Treasury advice on the matter, and pursued his own line of inquiry through Khemlani, who claimed he could raise the money through oil interests in the Middle East.

On December 13, 1974 Connor was given authority by the Federal Executive Council to borrow $4 billion for “temporary” (sic) purposes. The meeting was planned, and was held at the Prime Minster’s Lodge, while the Governor-General was in Canberra, but all knowledge of it was deliberately withheld from him until the following day.

On January 7, 1975 this authorisation was revoked at an Executive Council meeting at which the Governor-General was present. On January 28, 1975, at another Executive Council meeting at which the Governor-General was present, authority was given for an overseas borrowing of half of the previous amount - $2 billion - but for the same “temporary” (sic) purposes.

On May 20, 1975, this authority, too, was revoked. As the Governor-General was absent from Australia on state visits to Fiji and New Zealand, the meeting was presided over by the Vice-President of the Federal Executive Council and Minister for Tourism and Recreation, Frank Stewart. The other ministers present were Whitlam and Connor.

The reason for this second revocation was that the Treasurer, Dr Jim Cairns, was about to go overseas to negotiate a foreign loan through regular sources in the United States, and these negotiations would have been compromised by the existence of an authorisation to seek funds from the Middle East at the same time.

When details of Connor’s loan-borrowing attempts became public knowledge, Whitlam told the House of Representatives that he had been advised that there had been no further negotiations with Khemlani after the revocation of the Executive Council authority on May 20. But then Khemlani arrived in Australia and told a reporter of his telephone conversations with Connor after May 20 and continuing into June. Whitlam demanded Connor’s resignation for having misled him and thus causing him to mislead Parliament. Connor resigned on October 14.

On December 2 Alan Reid gave a television interview in which he clamed that, on October 20, Frank Stewart, in his capacity as Vice-President of the Federal Executive Council, had telephoned the Governor-General.

The interview with Reid was conducted by Michael Shildberger, who began the interview with the following introduction:

According to Alan Reid, the former Minister for Tourism and Recreation, Frank Stewart, was disturbed by the circumstances surrounding Mr Whitlam’s dismissal of former Minerals and Energy Minister, Rex Connor. Alan Reid says that in his position as Vice-President of the Executive Council Mr Stewart phoned the Governor-General, Sir John Kerr, on October 20, six days after Mr Connor resigned from the ministry. Mr Stewart told the Governor-General that in his view Mr Connor was entitled to believe that Mr Whitlam had given him approval to continue seeking petro-dollars from overseas immediately following the May 20 Executive Council meeting during which Mr Connor’s authority had officially been revoked.

In the course of the interview, Reid stated that Stewart had confirmed to him that he (Stewart) had spoken with the Governor-General on October 20; that Government House had not denied that the conversation had taken place; but that both Stewart and Government House had refused to give him any details of the conversation.

The substance of the interview was repeated by Reid in an article that appeared in The Bulletin published the next day, December 3, but dated December 6. The relevant paragraph in the article reads:

Stewart reported [to the Governor-General] that from discussions following the crucial Executive Council meeting of May 20 (the meeting at which Connor’s authority to secure a $2000 million petro-dollar loan was formally revoked) he thought that Connor was entitled to believe that he (Connor) had Prime Minister Gough Whitlam’s approval to continue his search for petro-dollars, despite the withdrawal of his formal authority.

Among Stewart’s papers held in the National Library of Australia, Canberra, is a single sheet of paper with no heading and bearing the date 5/12/75. It appears to be an aide mémoire such as Stewart might have prepared to help him deal with press enquiries arising from the Reid interview and article.

It contains the following sentences: “I have now read a transcript of the TV interview of Mr Alan Reid on A Current Affair on Tuesday, 2 December 1975 and his article in The Bulletin dated 6 December 1975. Both are inaccurate. I admit that, in my capacity as Vice-President of the Executive Council, I telephoned the Governor-General. I have not kept a record of any conversation I have had with him. I have not repeated them to anyone, nor do I intend to do so. I deny that I told the Governor-General or anyone else that Mr Connor was given the authority, tacit or otherwise, to continue negotiations for the loan. I firmly believe that Mr Connor, after 20 May 1975, did not initiate any action to continue negotiations.”

It should be noted that Stewart described the Read interview and article as inaccurate - he did not claim that they were untrue.

Stewart’s papers at the National Library also contain a copy of The Bulletin article of 6 December 1975, in which the Alan Reid article is annotated in Stewart’s handwriting. Against the words “Prime Minister Gough Whitlam’s approval to continue the search for petro-dollars” Stewart has written “To keep contact”. By his use of the word “inaccurate” in his aide mémoire and the words “To keep contact” in the margin of The Bulletin article, Stewart is not denying the substance of his message to the Governor-General, but is being pedantic over Reid’s choice of words - “to continue the search” as against “to keep contact”.

Reid’s article contains the following sentences: “He [Stewart] confided in friends that he was deeply disturbed by some of the circumstances associated with the Connor dismissal, and felt that he should do something about it. Six days after the dismissal, he did something about it by talking to the Governor-General.” Against those sentences Stewart has written the word “Yes”.

The next sentence in the article reads: “It is understood that the Governor-General did take some action but at this stage it is not known what action he took.” Stewart has marked this sentence with two crosses, thus indicating that it is not correct, because in fact the Governor-General told him that this was not a matter on which he (the Governor-General) could act and that he (Stewart) would have to take it up with the Prime Minister.

Reid’s article continues: “Connor reported to the Federal Parliamentary Labor Party caucus on the circumstances of his dismissal, but publicly has been taciturn. Caucus accepted his resignation “with regret”. Labor Parliamentarians who listened to Connor’s report to the caucus on the circumstances of his resignation said that Connor said there were some facts which were not then known but did not disclose them at the meeting.” Stewart’s marginal notation against this paragraph is the word “Correct”.

Finally, in the transcript of Reid’s television interview with Shildberger, Reid is quoted as saying that: “Mr Stewart confirmed that he had had a conversation with the Governor-General on October 20 but beyond that refused to discuss anything whatsoever.” Against this sentence Stewart has written the word “Right”. And where Reid referred to a telephone conversation between the Governor-General and Stewart as being “of quite lengthy duration”, Stewart has underlined the words “lengthy duration” and written the word “Short”.

Thus all the evidence confirms that there was a conversation between the Governor-General and Frank Stewart on October 20, 1975, and we are left in no doubt as to its substance.

Alan Reid’s television interview and Bulletin article received front page treatment in The Australian on December 3, 1975 in a story written by “Our political staff”, in which they reported that Mr Whitlam had declined to comment on the allegations. On the following day, Richard Farmer reported in The Australian that: “What he [Stewart] allegedly told Sir John Kerr was a defence of Mr Connor and an attack on the then Prime Minister, Mr Whitlam. It is the timing of this disclosure of this conversation which has so upset Labor Party members. They are critical of Mr Stewart for not stepping in quickly to deny the report or to at least try to put it in a different perspective.”

But apart from The Bulletin and The Australian, the rest of the media seemed to leave the story alone. Certainly there was no attempt to follow it up. The story was revived in January of this year by articles in The Daily Telegraph and The Australian, following publication of my book Head of State, but again Whitlam refused to comment and again there was no follow up.

Today only Whitlam is still with us - Kerr, Connor and Stewart are not - and the opportunity to winkle out the truth has been lost. Did Connor deceive Whitlam and thus cause him to deceive the Parliament, or did Whitlam deceive his party and Parliament, and sacrifice Connor? Was Connor guilty as charged, or did he accept an unwarranted stain on his character out of loyalty to his party and the Whitlam Government? It’s time we had the truth of the matter.