Cash trail leads to Clive Palmer ads

A BRISBANE media agency involved in Clive Palmer’s federal election campaign received $2.167m in Chinese government cash.

Clive Palmer at the open day for residents of the seat of Fairfax at his Coolum Resort on the Sunshine Coast at the weekend. Picture: Lyndon Mechielsen

A BRISBANE media agency involved in Clive Palmer’s federal election campaign received $2.167 million in Chinese government cash allegedly siphoned from an account controlled by the businessman at the time of his record-spending bid to enter parliament.

The Australian can reveal that new documents show the agency, Media Circus Network, received the payment with cheque No 2073 drawn on a National Australia Bank account called “Port Palmer Operations’’, just five days before the September 7 election.

Documents obtained from the Supreme Court of Queensland yesterday show that one month earlier, a sum of $10m went to one of Mr Palmer’s companies, Cosmo Developments, after being removed from the same bank account with cheque No 2046. Company searches show Cosmo Developments, which is owned by Mr Palmer’s flagship company Mineralogy, has one director, Mr Palmer’s nephew Clive Mensink.

Both men were yesterday named in subpoenas requiring them to hand over numerous documents as part of Chinese state-owned company Citic Pacific’s quest to determine how and why the $12.167m was withdrawn from an account set up to run an iron ore port in Western Australia.

The resources tycoon, leader of the Palmer United Party which now holds the balance of power in Australia, was sole signatory for the NAB account at the time, sources close to Mineralogy said yesterday. One of his executives, Vimal Sharma, had previously controlled the NAB account at the centre of a bitter and increasingly serious row with Citic.

The documents filed yesterday show for the first time that Media Circus Network, an integral agency involved in Mr Palmer’s campaign, and Cosmo Developments received the Chinese funds that went missing last year.

The potential consequences for Mr Palmer are considered so serious that China’s political leaders are being briefed on developments in Australia, according to high-level sources.

This is because the millions of dollars that went missing from the NAB account were originally deposited by the Bank of China in Beijing, on behalf of the Chinese government for works related to the port that is part of an iron ore project in the Pilbara region of Western Australia.

Mineralogy had told the Chinese that the two massive withdrawals, which dwarfed all previous amounts, were for “port management services”, with no further explanation provided. Mineralogy has not been operating the port.

The Supreme Court filings yesterday signal a serious new stage in a widening and confidential probe in Brisbane arbitration proceedings led by a retired Supreme Court judge, Richard Chesterman QC, who has issued legal orders to ensure an investigation of all ­aspects of the money trail, including an examination under oath of witnesses.

Under formal contracts and deeds, the NAB account’s funds were only meant to be spent by Mr Palmer’s company on expenses for running the port of Cape Preston, a hub for the export of iron ore from Mineralogy’s West Australian tenements being mined by the Chinese subsidiaries of Citic ­Pacific. New evidence suggesting that at least $2.167m of the Chinese money was instead directed with out their permission or knowledge is likely to be referred to police fraud squad detectives in Queensland and Western Australia by Citic Pacific.

A Citic Pacific spokesman declined to discuss the revelations yesterday, but said in a written statement: “The purpose of the subpoenas being served is to obtain documents that are required as part of the confidential arbitration on the administration fund.”

The documents examined by The Australian yesterday show that Media Circus Network, which is owned and operated by Teena Jameson and her partner Jon Cole, must provide evidence of all quotes, invoices, payments, services, and third parties related to the cheque payment of $2,167,065.60 from the NAB “Port Palmer Operations” account.

A staffer at Media Circus Network in Fortitude Valley, a near-Brisbane CBD office hub, said Ms Jameson and Mr Cole were on leave and travelling “in the Arctic”.

Their business helps create and book advertisements to build brand for clients across print, radio, TV and social media. Mr Palmer outspent the major political parties with millions of dollars of advertising in the federal election campaign.

Mr Palmer, who has launched defamation proceedings against The Australian, declined to answer the newspaper’s questions yesterday, texting: “No money is missing. Never went missing u (sic) true.”

The latest legal orders were approved by the arbitral tribunal in Brisbane, following weeks of confidential hearings in which Mr Palmer’s company refused to hand over documents including NAB account statements.

Mr Palmer told the ABC’s Lateline program last Wednesday that there was no action being taken against him, no complaint by the Chinese, no missing funds and that The Australian’s reporting was an “invention”.

The documents yesterday show that Mr Palmer’s Queensland Nickel company has claimed that $12.7m was deposited back into the NAB account on May 9 this year. This was two days after The Australian first revealed a Federal Court action in Perth in which the Chinese alleged that millions of dollars were missing from the account, were unexplained, could not have been spent legitimately, and demanded “rigorous inquiry” and a “forensic accounting exercise”.

Mr Palmer resigned as a director of Mineralogy two months ago, however, he is now being legally required to hand over bank statements, “the cheque butts for cheques numbered 2046 and 2073”, the cheque book, and a “purported Port Management Services agreement between Cosmo Developments Pty Ltd, Queensland Nickel Pty Ltd and Mineralogy Pty Ltd purportedly dated on or about 2 June, 2013”.

The notice to Mr Palmer and others, including Mr Mensink, warns that “failure to comply with this subpoena without lawful excuse is contempt of court and may result in your arrest”.

In a bid to determine how the $10m withdrawal could have been spent on “port management services”, the latest legal orders also require all Mineralogy and Queensland Nickel board minutes, papers, resolutions, reports to the board and any other document referring to any port services at Cape Preston.

The documents show Mineralogy has also been objecting to detailed “interrogatories”, or questionnaires, which Mr Chesterman has required the company to answer and provide in the quasi-judicial proceedings. Mineralogy has objected to Mr Chesterman’s orders and provided partial answers on grounds including that “requests to identify individuals” (involved in payments) “are irrelevant”, “fishing”, and “are a request for evidence”.

The Australian has previously reported that Mr Palmer’s businesses were suffering cash-flow problems at the time of the federal election, with losses mounting at his nickel refinery in Townsville and his dinosaur park golf resort on the Sunshine Coast. However, his company received more than $40 million in a settlement struck in September with the tax office after a successful legal challenge to the capital gains tax previously paid.

Large sections of the documents from the arbitration proceedings have been blacked out, or redacted, to preserve confidentiality but the portions that have been revealed show that Mineralogy is being put under significant pressure to provide answers.

The dispute is part of a wider row in which Mr Palmer has accused the Chinese, who have spent almost $10 billon on developing the iron ore export project based on his tenements in the Pilbara region, of trying to steal Australian resources without paying him royalties.

The Chinese, who are paying royalties to the West Australian government for the iron ore that is now being exported, are locked in legal battles with Mr Palmer’s company in the Federal Court to determine how much in royalties should be paid.