(L-R) Australia's Attorney-General George Brandis talks with Indonesia's Coordinating Minister for Political, Legal and Security Affairs Luhut Panjaitan during a news conference after their meeting at the Political, Legal, and Security Ministry office in Jakarta, December 21, 2015. Reuters/Beawiharta

The Federal Opposition Labor party has accused attorney general George Brandis of engaging in “corrupt conduct” and being involved in a “secret deal” with the Western Australia government that allowed it to claw back about $1 billion because of the collapse of the Bell Group.

The High Court had struck down WA legislation in May that would have given all the power to the state to decide how the settlement will be carved up after the collapse of Alan Bond’s Bell group in 1990s.

The Western Australian reports that the Commonwealth knew about these constitutional issues. However, in order to end the litigation that could have lasted more than two years, it told Justin Gleeson, then the solicitor-general, that an understanding has been reached between WA and federal governments and directed him to not run a particular argument in the court when a Bell creditor challenged the constitutionality of WA’s attempt to take control of $1.8 billion. Hence, it assured WA that it would not stand in its way. But when Gleeson was approached by the Australian Tax Office, which was owed $300 million by the Bell Group, he acted on the contrary and used same exact argument he was instructed not to use.

Thereafter, Brandis clashed with Michael Mischin, his state counterpart, because ATO had used the argument. Eventually, Gleeson and Brandis suffered a falling out.

Shadow Attorney-General Mark Dreyfus told Sky News that it was a clear case of corruption.

“The story suggests that he has directed, or sought to direct, the former solicitor-general, Justin Gleeson, to not run an argument in the High Court of Australia in a case that concerned a special act from the West Australian Parliament, which the Commonwealth tax commissioner said was invalid,” he aid, adding that Brandis favoured "the political interests of the West Australian Liberal Party" over his duty to the Commonwealth. According to Dreyfus, Brandis is unfit to hold the office and hence, he should resign.

Opposition Leader Bill Shorten has asked the Prime Minister Malcolm Turnbull to sack Brandis immediately.

On the other side, Finance Minister Mathias Cormann has dismissed the call by alleging that Dreyfus, as well as Bill Shorte, has a long history of “over-reach” when it comes to the attorney general. He added that they are “just getting ahead of themselves.”