Clive crashes the party

THE magnate has revived memories of another unwelcome intervention in the federal sphere: Joh for Canberra.

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CLIVE Palmer maintains he has no illusions about what will happen tomorrow behind the closed doors of the Liberal Party's federal council in Melbourne. His explosive motion to ban paid lobbyists from office-bearer positions may not get past first base and, even if it does, the movers and shakers of the party will almost certainly vote it down.

In promoting a seemingly lost cause, Palmer and his ally, Queensland Liberal National Party president Bruce McIver, have defied federal leader Tony Abbott, destabilised the top echelon of the Liberal organisation and revived raw memories of the chaos caused by another unwelcome intervention from the north, the Joh for Canberra push, that helped sink John Howard's election prospects in 1987 and destroy the first iteration of his leadership.

You have to ask: what are the Queenslanders thinking? And, more pertinently, what's in it for Palmer, the extravagantly unpredictable mining billionaire and inveterate dabbler in conservative politics whose shadow looms so large over the LNP and now the Liberals federally.

Palmer answers that it's a matter of personal principle as well as LNP policy, and he's prepared to stand on that, come what may. "My loyalties are to Australia before the Liberal Party," he tells The Australian. That may be so, but it's far from the whole story. Very personal agendas are playing out, old scores settled and new ones created over the LNP and its place in federal conservative politics.

Palmer and McIver merely lifted the lid on a pressure cooker that was set to blow. Two other figures loom large in consideration: Liberal factional warrior and former Howard government minister Santo Santoro and the stood-aside Speaker of federal parliament Peter Slipper, the serial defector who went from the National Party to the Liberals and quit the LNP to take up Julia Gillard's offer of the speakership.

With Palmer gunning for Santoro over his lobbying interests and Labor turning the screws on claims that senior LNP figures plotted to entrap Slipper in the sexual harassment case threatening his career, Queensland has morphed into the perfect storm for Abbott, just as it was for Howard.

Ironically, the trigger for Palmer's blow-up was accountability reforms adopted by the LNP last year before its triumph in the March 24 state election. Not only were lobbyists and working journalists banned from membership of the state LNP executive, they were also also locked out of raising funds for the party.

"These measures were more than mere electoral opportunism," party elder David Russell recounted in a speech to the Sydney Institute. "The LNP was acutely conscious of the electoral consequences, and subsequent economic damage to the state, of the perceived ethical failures of the members of the Bjelke-Petersen government, and determined to prevent their recurrence."

High-minded as it sounded, the lobbyist ban also created a glaring inconsistency between the LNP rules and those of the federal Liberal Party, and it didn't go unnoticed that Santoro was squarely in the frame.

The LNP is a merger of the Queensland Liberal and National parties at the state level, but constituted federally as a division of the Liberal Party. An expert in tax law and a former state and federal president of the Nationals, Russell was part of the brains trust that designed the unwieldy structure to overcome deep federal Liberal reservations about the amalgamation in 2009, including those of Howard, who had blocked an earlier merger attempt while he was PM.

But here's the rub. Russell was also a casualty of the power struggle that erupted at last year's federal council meeting, which has now been taken up by Palmer and McIver as unfinished business.

Santoro emerged from the disgrace of being forced out of the Howard ministry and parliament in 2007 over undisclosed share trading and won Russell's vice-president spot in the bitterly contested voting. At the same time Alan Stockdale, the former Victorian government treasurer, was re-elected as president, surviving by a single vote the willing challenge from one-time Howard government minister Peter Reith.

Reith, a party reformer, reviewed the Liberals' 2010 federal election campaign and was scathing of the organisational wing's accountability. To considerable surprise, however, Abbott backed Stockdale at the last minute.

It was a stunning return to grace for Santoro, who is said to get on particularly well with the Opposition Leader. The ebullient Queenslander is wired into Queensland business and has been one of the Liberal Party's most formidable fundraisers. According to the state government register of lobbyists, his clients include listed rail freight outfit QR National, Italian railway technology firm Ansaldo-STS, the Port of Brisbane authority, CONNEQ Infrastructure services, construction projects managers Johnstaff Pty Ltd and property developers Walker Corp and the Mantle Group.

Yet he is a deeply divisive figure with as many enemies as supporters in Liberal politics. His critics predicted his comeback would spell trouble for the party, and Palmer has put his considerable weight into proving them right.

The tensions became public on Monday when ABC journalist Chris Uhlmann broke the story that Palmer had clashed heatedly with Abbott at a Melbourne hotel last Thursday week, on June 21. As Palmer tells it, Abbott had pressed him to drop the plan he and McIver cooked up to spring the resolution on federal council tomorrow to adopt the Queensland position on lobbyists.

"The basic gist was that Tony said he wasn't going to stand by while his president and vice-presidents were embarrassed and he couldn't allow me to put up that resolution," Palmer says.

"And that invoked a very definite response from me, being an ordinary member of the party. A fundamental right of a political party is that your members can bring forward ideas, albeit if they be wrong ideas . . . I know Adolf Hitler wasn't in favour of people being able to put forward resolutions but I didn't think we were in Nazi Germany in 1939."

Abbott declined to go into the ill-tempered exchange with Palmer when pressed for details by reporters on Tuesday. But he did take a general swipe at the big man, saying he was "just a rank-and-file" party member.

Well, not quite. Between making billions from iron ore mining, developing coalmines and smelting nickel Palmer, 58, has cheerfully found time to indulge his personal feud with Wayne Swan, flagging that he might seek to run for the LNP against the federal Treasurer in his Brisbane seat of Lilley. Nominations for LNP preselection close next Tuesday.

He is flying south this weekend with McIver, who he calls a "reluctant warrior", as one of 14 LNP delegates to federal council, the Liberal Party's top forum.

Far from quietening down, Palmer responded to Abbott's gibe with a media blitz on Wednesday. That morning, The Australian revealed that McIver had been considering challenging Stockdale for the presidency. Again, Abbott had to intervene. He saw McIver last Wednesday week, June 20, in Canberra and prevailed on him to withdraw. McIver said he was happy to fall into line: "Tony asked me not to run so I agreed with my leader."

Palmer maintains that McIver is the best president of any political party in Australia and the LNP's stunning election performance three months ago, when it won 78 of Queensland's 89 state seats and installed Campbell Newman as Premier, confirms that.

Yet his attempt to bracket Stockdale with Santoro as a paid lobbyist is puzzling and unfair to Stockdale. The Kennett-era figure agrees that he was for a time registered as a lobbyist in Victoria, but this was a technicality, and he has never performed paid lobbying. Neither Stockdale nor his company, EC Strategies, is listed on the Victorian government's register of lobbyists.

Palmer is also at pains to say he has no issue with Alexander Downer, the Howard era foreign minister, serving as a federal vice-president when he is registered as a lobbyist with Adelaide-based consultancy Bespoke Australia. Downer, as it happens, served on the board of one of Palmer's principal companies, Resourcehouse, for three years until resigning last December.

One of Palmer's friends, Larry Anthony, another Howard minister, has his shingle out as a lobbyist in Brisbane while sitting on the federal executive of the Nationals. Palmer agrees Anthony needs to choose between the roles.

Some senior Liberals believe that Stockdale has been caught in the crossfire, when Palmer's real target was Santoro. That, however, flies in the face of the genuine belief in sections of the party that Stockdale is past his use-by date as federal president, and that the case Reith put last year for changes to campaigning, fundraising, party structures, staff training and preselection processes is even more compelling 12 months on.

One senior party figure contrasts the state of the federal organisation with the LNP. "People have seen what a really good, effective party organisation can achieve with the Queensland election result," the source said, saying the poor state of the federal machine could cost the Coalition seats at the next election.

While a subcommittee of the Liberal Party executive was established to progress Reith's findings, amid promises the federal executive would meet more regularly and work would begin to revitalise the party's finance and policy committees, senior Liberals complain that the reform process has stalled.

"It's just 'as you were'," says another frustrated member of the federal executive.

Palmer was at it again yesterday, demanding that Santoro resign his party office over a claim that he, Santoro, had approached ABC managing director Mark Scott to take him on as a lobbyist in the event that the Coalition won the next federal election.

Palmer fumed that such an advance by Santoro, a known critic of the broadcaster, could have been interpreted by Scott as threatening, given it came from the vice-president of a political party that's likely to be in power next year.

A spokeswoman for Scott confirmed there had been an "informal exchange" between the MD and Santoro at the opening of the ABC's new Brisbane HQ in April, but Scott did not feel intimidated by it. Santoro, in a statement, denied that his offer to represent the ABC had been tied to a change of government.

Palmer was having none of it. "This is the perfect example of what I have been saying," he said in a statement yesterday. "Advances such as these are a disgrace for any political party and Mr Santoro should discontinue lobbying or resign from the Liberal Party executive immediately."

As for federal council tomorrow, Palmer insists it's a fight worth having, even though he and McIver probably won't win. Not this time around. "I am sure I will be ostracised in Melbourne," he tells The Australian.

"People will have a go at me, and I'm realistic enough to know most of them probably won't vote with us if we get that far.

"But . . . the issue is too important not to raise it."

Additional reporting: Christian Kerr