In an opinion piece “Lingering riddle of big Rex’s downfall” in the Daily Telegraph of 2 January, 2006, Malcolm Farr asks 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 gaoled for financial crime in the US .
It was beyond any rational understanding as to 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 EG 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 January, 2006, “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 13 December, 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 on 2 January, 2005 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.
Treasury posts in the world’s financial capitals soon reported puzzled inquiries from reputable financial houses, not only in relation to Khemlani, but also concerning a letter from the Treasurer, Dr Cairns, to a Melbourne dentist –a dentist-indicating interest in arranging borrowings, and offering a 2.5 per cent commission. And this was from a country which hitherto had the highest standing in the world’s financial centres.
That the Commonwealth of Australia should be represented by such charlatans points not so much to the naïveté as to the reckless indifference of the government to the minimum standards of propriety and civilized behaviour.
Appointing Khemlani was a gross defamation on our international reputation.
This behaviour on the part of a Western government, more appropriate to an African military kleptocracy, could not have failed to be relayed to the media and the opposition, with. as John Stone observes laconically, predictable results. In the meantime, the economy was moving from bad to worse, and eventually would come close to collapse, saved only by the intervention of the Governor-General.
Such is the wisdom of the nation’s elites that Sir John Kerr is now painted as a villain, Mr Whitlam has achieved a secular canonisation in his own lifetime, Malcolm Fraser is held out as a model convert to some form of neo- whitlamism, all his previous sins forgiven, and the constitutional system which put the final decision in the hands of the people is described as broken!
A detailed investigation into the events surrounding Connor’s dismissal may be found in Sir David’s book, Head of State, which has received little attention from the nation’s political journalists, and apart from Quadrant and on this site has not, to my knowledge, been reviewed, yet another indictment of the refusal of our elites to brook any challenge to the Whitlam canonisation if not deification.
It is refreshing that Malcolm Farr, at least, is prepared to refer to Sir David’s work.
Sir David believes Connor, who died in 1977, was innocent of the charge of misleading his leader. He thinks Connor was the scapegoat to keep the Whitlam government in office.
Sir David has drawn on the documents of the late Frank Stewart, Whitlam’s minister for tourism and sport, and Vice President of the Executive Council.
After perusing Stewart’s papers, Sir David believes he was troubled by Connor’s fate.
Theses papers include copies of reports by the Bulletin journalist Alan Reid and Stewart’s annotations on these.
Reid had reported that Stewart called Sir John Kerr on 20 October 1975 – six days after Connor’s resignation – and told him Connor had been entitled to believe Whitlam had given him permission to maintain talks with Khemlani. Sir David believes Stewart’s annotations on a transcript of a television interview and a Bulletin article by Reid support this report.
As Malcolm Farr says, if Connor had been punished unfairly, he never spoke of it in public. And Whitlam has never deviated from the official line about the forced resignation.
If Stewart had contacted Sir John Kerr, it would have strengthened his increasing suspicions about his prime minister. Acting as Mr Whitlam had so often insisted was the proper consequence of a failure to obtain supply, Sir John took the only course of action available to him.
This was both constitutional and democratic: to ensure that the issue was put to the people.
Until next time,