How Turnbull's Legal Gambit May Tilt Showdown His Way

(Bloomberg) -- When Malcolm Turnbull stepped into the Canberra winter chill and on to the podium in the prime minister’s courtyard at 1 p.m. on Thursday, most pundits thought he was about to quit. Instead, he turned the tables.

He challenged his chief rival Peter Dutton -- who was his home affairs minister until Tuesday when he launched an assault for the leadership -- to prove that the majority of Liberal lawmakers want their leader removed by providing a petition with their signatures.

Turnbull also spoke about another document, one he hopes may save his career -- a letter referred to the nation’s top legal officer asking whether Dutton may actually be ineligible to remain in parliament.

If the result of that probe goes Turnbull’s way, he just may be able to save his skin. So was Turnbull’s surprise attack the last, desperate shot of a politician in the death throes, or a direct hit that will stop his rival in his tracks?

1. Did this challenge come from nowhere?

On Tuesday, hours after Dutton’s first attempt to win the leadership narrowly failed, an article was published by Fairfax Media alleging he could be disqualified from parliament over his business interests. Before entering parliament in 2001, Dutton went from serving in the police force to business, specializing in developing childcare centers. The Fairfax report said Dutton had remained a beneficiary of a trust that owned two childcare companies and received government subsidies -- potentially violating Section 44 of the constitution.

2. Section 44. Sounds familiar?

Section 44 of Australia’s constitution documents who is eligible to become a candidate for election to parliament. One clause has cast a shadow over Australian politics for more than a year, with a raft of lawmakers -- including then Deputy Prime Minister Barnaby Joyce -- ruled ineligible by the High Court to remain in parliament because they held dual nationality at the time they were elected.

3. This is a different clause?

Yes. Clause V bans candidates with “any direct or indirect pecuniary interest in any agreement with the” government. Fairfax says government documents released under freedom of information laws show a company owned by Dutton’s wife has operated two childcare centers in his home town of Brisbane, and they have received about A$5.6 million ($4 million) of federal funding.

4. Ouch. How did Dutton react?

Not well. He said the allegations were part of a “spurious and baseless campaign” against him, and noted their timing was “curious.” That hasn’t stopped Turnbull’s Attorney General Christian Porter from referring the matter to Solicitor General Stephen Donaghue, who can recommend whether Dutton’s eligibility should be passed to the High Court for judgment.

5. What -- and when -- will the solicitor general decide?

Sydney University professor of constitutional law Anne Twomey has told Fairfax if he’s referred to the High Court, there was a “danger” Dutton could be disqualified and that his case was “borderline.” Turnbull said on Thursday he expects the advice from Donaghue -- who, unlike Porter, isn’t a member of parliament -- to be provided to him “first thing” on Friday morning. That’s before an expected midday showdown for the ballot.

6. What if Dutton’s eligibility remains unclear?

It will at least confuse his bid for the leadership. Should he be referred to the High Court, he would likely be able to stay in parliament for the immediate future, and High Court decisions usually take months. But his ability to lead may be questioned by colleagues in the Liberal party. Dutton supporters may think twice about voting for a candidate who could be kicked out of office by federal judges.

To contact the reporter on this story: Jason Scott in Canberra at jscott14@bloomberg.net

To contact the editors responsible for this story: Ruth Pollard at rpollard2@bloomberg.net, Edward Johnson

©2018 Bloomberg L.P.