On Wednesday 25 February 1976, The Australian published a sensational front page story headlined “Iraq promises $US500,000 to pay Labor’s debts/Whitlam in secret Arab election deal”.

A repost from 12 September 2025

The story dominated Australian politics for the next few weeks, created lasting schisms in the Labor Party, and almost ended former prime minister Gough Whitlam’s career. It was bylined a “Special Correspondent”. That correspondent was in fact Rupert Murdoch filing from London.

This bizarre and unique episode is the only case of a major Australian political party seeking funds from a foreign government, and not just any foreign government but a brutal, authoritarian one, later to be led by the murderous Saddam Hussein.

It was born out of Labor’s desperation. After the governor-general’s dismissal of the Whitlam Government on 11 November 1975, Labor was faced with fighting its third federal election campaign in three years, facing almost certain defeat amid the economic upheavals of stagflation, and hopelessly short of funds.

After a national executive meeting on 16 November, the left-wing Victorian senator, Bill Hartley, approached National Secretary David Combe with the idea that there could be funds available from Arab sources with no strings attached. Combe put it to Whitlam who approved the idea.

Hartley then approached Henri Fischer, with whom he apparently had a friendship and who had good sources in Iraq. Fischer (extreme right-wing and racist) and Hartley (extreme left-wing) were polar opposites politically, but both shared pro-Palestine/anti-Israel views.

Fischer left for Baghdad. On 10 December, three days before the election, two “gun toting” Arabs met Whitlam and Combe in Fischer’s Sydney apartment. The Iraqis promised half a million US dollars from the Baath regime. On the basis of this promise, Combe authorised more last-minute advertising.

After Labor’s overwhelming defeat, morale in the party was very low. To make matters even worse, no money arrived. Combe and others were increasingly desperate as Labor’s advertising agency was threatened with bankruptcy, unable to pay for the extra advertising the party had ordered on the basis of the promise.

News of the staggering proposal reached more people in the ALP, and alarm spread in Labor’s senior circles. Australia’s leading political journalist, Laurie Oakes, became aware of what had occurred and, on the same day as The Australian, the Sun published the sensational story.

Like all such spectacular leaks, there was much speculation about Oakes’ source. Senior Labor figures, such as Combe and John Ducker, were convinced who the source was, and soon after Ducker forced NSW general secretary, Geoff Cahill, out of his job, although Oakes maintains that Cahill was not his source.

After these stories appeared,........

© Pearls and Irritations