Former premier Denis Napthine says the allegations are an act of desperation from the Labor Party

FORMER premier and Member for West Coast Denis Napthine will be investigated by the state ombudsmen over allegations that Coalition members knew of or benefited from the embezzlement of more than $1.5 million of Liberal Party money.

Former premier and south west coast MP Denis Napthine.

Former premier and south west coast MP Denis Napthine.

Dr Napthine, former member for Polwarth Terry Mulder and Western Victorian MP Emma Kealy will be investigated by Victorian Ombudsmen Deborah Glass, along with 37 other current and former MPs.

Dr Napthine said the investigation was a desperate attempt by the Labor Party to drag the Liberal Party through the mud rather then address the tax payer-funded “red shirts” rorting by the Labor Party. 

The $1.5 million was embezzled by former Liberal Party state director Damien Mantach, who was later jailed.

On Wednesday The Standard reported that the Labor Party alleged Ms Kealy had tried to get around electoral advertising rules by pre-paying for ads before the coming November election.

But Ms Kealy dismissed the allegation as “a disgraceful smear campaign”. 

At the time Deputy Premier James Merlino called for the state ombudsman to investigate whether Ms Kealy, the Horsham-based Nationals Member for Lowan, tried to circumvent the rules by having the invoices pre-dated to October.

In his counter-attack, Mr Merlino released an internal email mistakenly sent by the Hamilton Spectator newspaper that stated Ms Kealy had asked for invoices for advertising booked for November to be pre-dated to October.

Ms Kealy said that “despite a clear unambiguous statement and unreserved apology from the Hamilton Spectator dismissing James Merlino’s concocted claims, Labor MPs still continue to drag the good reputation of a country newspaper and my staff through the mud.”

The investigation comes after the ombudsman found that Labor had wrongly used electorate officers to conduct political campaigning and the ALP repaid $388,000. Police are investigating the misuse of the funds.