'Utegate' affair runs out of gas

CANBERRA - Short of some damning new revelation emerging from the two investigations into the fake email that shredded federal Parliament into rival lynch mobs, the "utegate" scandal seems likely to fade into a disreputable whimper.

While both sides scramble for the tiny remaining islet of high ground, the perception left in the minds of many Australians will be one of politicians once again brawling in the mud.

As it stands, the confirmation by federal police that the email used as the trigger for the Opposition's assault on Prime Minister Kevin Rudd was fraudulent will ensure that no heads of any consequence will roll.

Rudd has been exonerated, Treasurer Wayne Swan will survive with his boss's help in skating around allegations he misled Parliament, and Opposition Leader Malcolm Turner will remain in his job, if with a temporary blush.

The only threat to this renewed equilibrium is the (vague) possibility that police and/or the Auditor-General will link the author of the infamous email directly to Turnbull or the offices of other senior Liberals.

The text of the email was leaked to Daily Telegraph political journalist Steve Lewis following a period of "smoking gun" rumours in the wake of the Opposition's bid to turn the loan of a ute by Brisbane car dealer John Grant to Rudd, a personal friend, into political capital.

The Telegraph published the email, following evidence in the Senate by Treasury official Godwin Grech, who said that it had been made clear Grant was "not your average constituent" in an apparent bid by Rudd's office to push through financial assistance.

Grech was in charge of the OzCar scheme set up to find finance for car dealers hit by the economic crisis.

The clear implication of the email and Grech's evidence was that Rudd and Swan had improperly used their influence to assist a friend.

No copy of the email could be found.

Turnbull demanded Rudd and Swan resign. Rudd retaliated by setting up investigations by the police and the Auditor-General, a clear sign he was confident the email was fraudulent.

Turnbull should have heard alarm bells. Instead, he thundered on, setting himself up for an inevitable fall when police raided Grech's home, found the email, and began interviewing the 42-year-old official and a former Turnbull adviser.

Yesterday, Turnbull was forced to concede Rudd was in the clear.

He was further forced to concede that he had relied for his attack on Grech's evidence and the text of the email published in the Telegraph.

This lack of due diligence by a QC and extremely successful former merchant banker is embarrassing.

Turnbull yesterday also had to deal with the news that Grech had once been on the staff of his shadow treasurer, Joe Hockey, who had called the official at the weekend to leave a message of support.

This was not too difficult, given Grech's senior role in the bureaucracy and the fact that he worked with Hockey for only a short time as a liaison officer, about a decade ago.

Turnbull and his top guns have been continuing to target Swan over the trail of emails that strongly suggest he did try to push Grant's case along.

Swan and Rudd have been trying to turn the tide - even releasing 24 emails indicating other dealers unknown to either had received their help - but Turnbull has a strong case.

But in the end, short of some new scandalous twist, the substance of federal politics is not going to change.