Angus Taylor's wife Louise Clegg has rejected claims she is planning on running against Clover Moore for the job of Sydney's lord mayor, after Labor linked her rumoured candidacy to the doctored document saga.
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Labor senator Kristina Keneally asked Australian Federal Police Commissioner Reece Kershaw whether police investigated claims that Ms Clegg was running against Cr Moore at the upcoming Sydney council election as a possible motive for the distribution of the false figures, during Senate estimates on Monday.
The Nine newspapers last month named Ms Clegg, who lives in Goulburn, as possibly seeking preselection for the Sydney mayoral race.
Senator Keneally said there had been rumours on social media "for months" about whether the letter had been an attempt to discredit Cr Moore ahead of Mr Taylor's wife's tilt at office.
The question prompted an uproar from Liberal senators.
Victorian senator Sarah Henderson described the question as "absolutely disgraceful".
Legal and Constitutional Affairs committee chair Amanda Stoker said, "the Private Sydney gossip column was not relevant to additional estimates process".
"Whether or not somebody down the track might nominate for the mayor of City of Sydney has no bearing on the allocation of funds in the budget to the AFP and quite frankly, if we want to look at allocations or funding, we should be looking at the cost of the investigation," Senator Stoker said.
Senator Keneally replied, "I think it's quite relevant."
"We have a federal minister who used a doctored document to attack not only his political rival in terms of policy terms, but also potentially his wife's rival in terms of political terms."
But Ms Clegg told The Canberra Times the rumours were categorically untrue.
"I am not running, have never planned to run and am ineligible to run for the position of lord mayor of the City of Sydney," she said.
"This is an attack on a member of parliament's family for political purposes."
Commissioner Kershaw told the committee he stood by his officers' decision to drop the investigation into the matter last month, which cited a "low level of ongoing harm" to the community.
"Those officers are extremely objective. We act impartially. And they've made the decision," Commissioner Kershaw said.
Commissioner Kershaw also said the decision was made without interviewing Cr Moore or Mr Taylor as part of the investigation.
Greens Senator Nick McKim asked why they didn't interview the minister.
"Their view was we're out of work on that matter. It's finished, it's finalised," Commissioner Kershaw replied.
It wouldn't take many resources to ring him up and ask him, Senator McKim contended. Why didn't you call Mr Taylor, he asked.
"We don't operate like that," Commissioner Kershaw said.
"I think that's really important that we don't go around asking everyone who perhaps is not involved in the matter 'did you do it?'"
Commissioner Kershaw said he had a responsibility to ensure taxpayer money was being spent "pursuing criminals".
Senator Stoker accused Labor's attorney-general spokesman Mark Dreyfus - who made the police referral - of being a "vexatious litigant".
"The shadow attorney-general has made or overseen 10 referrals of Coalition members of parliament to police, every referral of which was dropped with no charges laid," Senator Stoker said,
Commissioner Kershaw said political referrals were "not straightforward matters" but suggested parliamentarians seek legal advice first.
"Often it's not clear to us what the referral's actually pertaining to, what the offences are," Commissioner Kershaw said.
"So for us to stop wasting our time, [individuals need to] actually add value to that referral before it comes to us."
Mr Taylor wrote to Cr Moore last September to accuse her council of spending more than $15 million on travel in 2017-18, citing figures from the council's annual report.
In fact, the spending was less than $6000 and the annual report appeared to have been falsified.
Mr Taylor insisted his office had downloaded the report from the council's website with the incorrect figures included, but the council showed they had never appeared in any version of its annual report.
However police had found no evidence Mr Taylor was involved in falsifying documents, an Australian Federal Police spokesperson said when the case was closed last month.
"The AFP assessment of this matter identified there is no evidence to indicate the Minister for Energy and Emissions Reduction was involved in falsifying information," police said in a statement.
"The low level of harm and the apology made by the Minister for Energy and Emissions Reduction to the lord mayor of Sydney, along with the significant level of resources required to investigate were also factored into the decision not to pursue this matter."
