The Australian Electoral Commission rejected a complaint about fake how-to-vote cards for independent and minor parties that directed preferences to Peter Dutton because they informed voters how to cast their first-preference vote correctly.

The revelations are contained in a submission by Benedict Coyne, the Greens candidate for Dutton’s seat of Dickson, who had complained to a parliamentary inquiry into the May election.

The submission cites Channel Seven reporting that on election day volunteers wearing maroon shirts distributed cards urging voters to “vote for Queensland” with instructions on “how to vote for a minor party or independent”. The cards suggested candidate orders for voters of the Greens, United Australia party and One Nation parties, among others. All permutations placed Dutton above Labor’s Ali France.

The cards were authorised by Warwick Armstrong, from a redacted address which Coyne submitted had a Dutton corflute out front on election day.

The AEC also sought to share responsibility for the issue with the police, which it said had twice chosen not to investigate similar complaints of unauthorised how-to-vote cards siphoning second preferences to non-preferred candidates.

What’s the story with these how to vote cards being handed out all over Dickson how to vote “independent” but preference for @PeterDutton_MP number 2 ? Get Up has complained to @AusElectoralCom as they are authorised by a bloke worth a ...Dutton signage in his front yard pic.twitter.com/8a6UslA2wU — 𝕤𝕒𝕞𝕒𝕟𝕥𝕙𝕒 𝕞𝕒𝕚𝕕𝕖𝕟 (@samanthamaiden) May 18, 2019

Coyne submitted that his official how-to-vote cards directed voters to put France third, after the Animal Justice party, and ahead of Dutton, ranked fifth, and the unauthorised material was therefore “completely contradictory”.

Coyne submitted that the unauthorised how-to-vote cards may breach section 329 of the Electoral Act, which prohibits material that misleads and deceives voters about the process of casting their vote.

Coyne complained that his preference flows were “misrepresented and exploited as part of what seemed a somewhat elaborate and coordinated campaign to ensure the vote of the incumbent LNP candidate Peter Dutton”.

Dutton won Dickson with a primary vote of 45.9% after receiving 54.64% of the two-party-preferred vote, with a 2.95% swing in his favour.

Coyne’s submission included an email the AEC wrote to a Dickson independent candidate, Thor Prohaska, on 22 May explaining why it did not take action against the material.

The AEC wrote that although it became aware of the material at 10.10am on election day after a complaint from GetUp, it formed the view it was “clear that this was not an official [how to vote] card” authorised by the listed candidates.

“The AEC is of the view that images of the [how to vote] card in this instance did not mislead voters about marking their first preferences for the candidates of their choice,” it said.

“The issue of false second preference vote directions is rather more complex.”

The AEC noted a breach of section 329 is a criminal offence, requiring investigation by the Australian federal police and referral to the commonwealth director of public prosecutions.

“On at least two previous occasions the AEC has made a referral of second preference [how-to-vote] cards that differed from the officially endorsed [how-to-vote] card to the AFP for investigation,” it said.

“On both occasions the AFP has refused to accept the referral on the basis that the disparity between the official and the fake second preferences listed was apparent on the face of the card and that the elector still marked a valid first-preference vote in accordance with their intentions.

“The AEC formed the view that the [how-to-vote card in this instance would fall within the previous approach taken by the AFP and would not be progressed for criminal action.”

Coyne submitted that section 329 is directed at conduct “influencing the way in which a ballot paper is actually marked” and therefore applies “notwithstanding the first preferences are accurate” on the Armstrong how-to-vote card.

He suggested “all subsequent preferences are not only misleading and inaccurate but seek to benefit a particular candidate in a coordinated, organised and mischievous way” and it would therefore be “absurd” if this were not considered a breach.

“It is unclear why the AFP has taken no action and I would encourage the [joint standing committee on electoral matters] to obtain a response from the AFP on this issue.”

At its first public hearing in the 2019 election inquiry on Friday, the AEC submitted that it lacked the resources and powers to investigate the opaque funding used to spread political ads on Facebook.

In written submissions the inquiry has heard from civil society groups calling for spending caps on elections, the Coalition calling for a shorter pre-poll period, and Labor, which wants social media giants subjected to more scrutiny for failing to take down false material.