Victorian Premier Daniel Andrews has apologised for what he has described as "absolutely disgraceful behaviour" by Labor MPs detailed in a report by the state's anti-corruption watchdog.
The report, released by Victoria's anti-corruption watchdog on Wednesday, uncovered "egregious" and "extensive misconduct" by Victorian Labor MPs, including rampant nepotism, widespread misuse of public resources and a culture of branch stacking dating back decades.
Victoria's Independent Broad-based Anti-corruption Commission (IBAC) held public hearings in October and November 2021 into the misuse of taxpayer funds and community grants in the Victorian branch of the ALP.
Addressing the findings, Mr Andrews said he took "full responsibility" for the conduct detailed in the report.
"The report tabled today shows … absolutely disgraceful behaviour, behaviour that does not meet my expectations or the expectations of hardworking members of the Victorian community," he said.
"As the leader of the party and the leader of our state, I take full responsibility for that conduct — that is what the top job is about — and I apologise for it."
Mr Andrews was among dozens of witnesses also ordered to privately give evidence over cultural failings in the Labor Party.
Known as Operation Watts, the joint investigation between IBAC and the Victorian Ombudsman was prompted by an expose by The Age and 60 Minutes in 2020, which aired allegations of industrial-scale branch stacking levelled at former state minister Adem Somyurek.
Mr Somyurek was sacked from cabinet in the wake of the claims, while his former factional allies Marlene Kairouz, Luke Donnellan and Robin Scott resigned.
Potential prosecution of misconduct limited by weak laws
The IBAC said while the identified misconduct was considered to be "egregious", the watchdog was hampered by weak laws around parliamentary accountability.
"We criticise a legislative framework that provides few, if any, consequences for abusing public resources and that allows such conduct to continue unchecked," IBAC commissioner Robert Redlich said.
"The difficulties in proof and the state of the law are such that we cannot recommend prosecution."
Mr Redlich said numerous examples of unethical behaviour within the party were put forward at IBAC hearings.
"The evidence, both public and private, painted a compelling picture of jobs on the public purse according to factional loyalties, and widespread misuse of public resources for political purposes," he said.
Government accepts all recommendations of IBAC report
The report made 21 recommendations, including the establishment of a Parliamentary Ethics Committee and a Parliamentary Integrity Commissioner, and reform of parliament's privileges committee to reduce the dominance of the majority party.
"There's a suite of reforms here that we would like to see implemented and not cherry-picked, but taken as a package. They would address what we see as the broad corruption that was exposed by this case," ombudsman Deborah Glass said.
"Despite the findings of this report we consider most members of parliament, despite their party affiliation, genuinely seek to advance the public interest. We encourage them to demonstrate this by supporting these reforms."
Mr Andrews said the government would accept all 21 recommendations.
He said the government would go further by introducing legislation barring major political parties from receiving public funding unless they properly policed party memberships, including by ensuring memberships were paid by traceable means and photo ID checks were carried out for new members.
Corruption 'deeply damaging' says IBAC
The anti-corruption watchdog said the investigation also did not uncover examples of "traditional" corruption, with decision-making said to fall within the zone of "grey" corruption that benefited MPs' associates, but did not amount to criminal conduct.
However it warned the corruption could have a "deeply damaging" effect on public confidence in democracy and its institutions.
The report highlighted how little had changed since the ombudsman's 2018 report into the so-called "red shirts" scandal, which saw Labor campaign organisers employed as electorate officers in the lead-up to the 2014 election.
"Allegations of bad behaviour by our elected representatives still generate a disproportionate number of media headlines," the report found.
The opposition's David Davis said the report showed Labor had learnt nothing from the red shirts saga.
"I don't believe the community can have confidence that Labor is the party to take them into the future," he said.
Ombudsman rejects further investigations
Despite the findings of the report, Ms Glass said did not see value in pursuing further investigations into the issues unearthed.
"I would have thought it's time for parliament to get its house in order in relation to its own integrity rather than to launch further investigations," she said.
"These should not be matters for the ombudsman or matters for IBAC, or necessarily matters for the police, these should be matters for parliament to be concerned about ethical standards and obligations."
Branch stacking is used by party factions to recruit members, often by paying for their membership, to amass internal political power and influence candidate pre-selection.
The practice is not illegal, but is against Labor Party rules.
In a draft report leaked in April, IBAC found an unethical culture was embedded in the party, and had been condoned by its leaders for years.
Mr Somyurek has denied all allegations of branch stacking, but admitted to IBAC's inquiry in 2021 that he hired factional operatives to work in his electorate office.
In the report, one electorate officer described occasions where Mr Somyurek engaged in "bullying and intimidatory tactics" to achieve his goals, but the former minister said he felt "liberated" by the report.
"I'm happy, I'm relieved, I feel exonerated," Mr Somyurek said.
Ombudsman Deborah Glass rejected that conclusion.
"I think we are very clear that the conduct here is egregious and there is no shadow of a doubt," Ms Glass said.
"I would not describe this report as an exoneration."
