A parliamentary inquiry has found Attorney-General George Brandis was reluctant to intervene in a case worth hundreds of millions of dollars to taxpayers.
The opposition-dominated Senate committee was examining whether the federal government sought to short-change taxpayers by doing a deal with the West Australian government on Alan Bond's liquidated assets.
The WA government believed it had an agreement with Canberra but was dudded when the Australian Taxation Office and the commonwealth successfully challenged WA laws relating to the Bell Group in the High Court.
The committee report tabled in parliament on Wednesday night, said Senator Brandis and the government had frustrated the work of the Senate by refusing to provide the committee with answers and information.
It found Senator Brandis acted with "some reluctance" to defend the commonwealth's interests in the Bell Group matter, which would have been an unacceptable outcome.
The committee heard evidence from the ATO that it sought legal advice from the solicitor-general after hearing "whispers" Senator Brandis was considering preventing it from intervening in the case.
"The Attorney-General's refusal to answer questions or provide documents in relation to a direction under the Judiciary Act suggests that a direction by the Attorney-General, his office or department, was at least contemplated," the report said.
"This raises further suspicion that there was, in fact, collusion over potential revenue from the Bell Group insolvency process between the commonwealth and Western Australian governments."
Labor's Murray Watt said the deal may have been made to appease WA over its long-running complaint about the GST distribution.
"We will never know the reason for this deal but the deal was done, there's no doubt about that," he told parliament.
In a dissenting report, government senators said no evidence had been uncovered to support the allegations, insisting they were confected by the opposition.
Liberal senator Ian Macdonald described the inquiry as a witch-hunt that "went absolutely nowhere".
It was an embarrassment to the Senate and a waste of taxpayer-funded resources.
"Even speaking on this report is an embarrassment to me," he told parliament.
"Not a skerrick of evidence has come forward that suggests any wrong doing."
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