Opposition Leader Matthew Guy will get crucial election campaign funding from the $70 million Cormack Foundation but Liberal Party head office and state president Michael Kroger will not see a cent of it.
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In an extraordinary move, Mr Kroger and Liberal headquarters have been looped out and it appears neither will be given a say on how the money is spent.
The foundation’s directors have kept up the pressure on the party's state president, Michael Kroger, saying the Liberals’ administrative set-up he leads will get no money and that donations will instead flow directly to Mr Guy.
The foundation said on Monday that Mr Kroger and his colleagues on the party’s administrative committee must agree to make changes to their financial management if they are to see any of the Cormack millions.
There were no details available on Monday about how the foundation's plan might work, but a Cormack spokesman said there would be "discussions" to work out the detail.
Mr Kroger “welcomed and thanked” the Cormack Foundation for its “offer of support for Matthew Guy”.
He said all relevant governance changes had been made and he looked forward to discussing these matters with the Cormack board.
"This is an extremely welcome development and will help us rid Victoria of the Andrews government, which is the most extreme in our history," Mr Kroger said.
The announcement comes in the wake of last week’s Federal Court decision in the case Mr Kroger brought against the foundation after many months of simmering animosity, where the party won some Cormack shares but failed in its bid to win control of any its money.
The dispute was sparked in part by Cormack’s demands for reform of the party’s financial controls after former state director Damian Mantach stole more than $1.5 million from Liberal coffers.
The foundation wants changes to the party's constitution to allow a six-point plan to tighten control of its money as recommended by external advisors in the wake of the Mantach scandal.
In a statement published on Monday, the foundation said it was looking “forward to supporting the election of a Matthew Guy Coalition government”.
“[The] Cormack Foundation will resume its normal activities including making donations supporting liberal and free enterprise causes consistent with the company’s objectives," the statement read.
“[The] Cormack Foundation will not direct any donations to the administrative wing of the Victorian Liberal Party until independent verification confirms that the governance reforms recommended by PPB Advisory following the theft of party funds by a senior official have been implemented and are functioning effectively.”
Mr Kroger is believed to have moved to appoint an independent chair of the party’s finance committee at the recent Liberal state council meeting. He said an independent chair would be appointed in the next month.
Mr Kroger has argued the Federal Court’s decision showed that the Liberal Party is the rightful owner of the majority of the Cormack Foundation even though it was awarded just 25 per cent of its shares.
Mr Guy has been contacted for comment.
A senior Liberal supporter of Mr Kroger said high-level pressure had been placed on the Cormack Foundation at the weekend's federal council meeting to resume its financial support for the party.
