Loaded PUP: Powder keg holding balance of power

ERIC LOBBECKE Inquirer Artwork 05-07-2014 Clive Palmer

AUSTRALIANS have not experienced a politician quite like Clive Frederick Palmer. In the past 30 years there have been a few notables, also conservatives from Queensland, cut from a similar cloth: a roughly stitched weave of populism and wacky eccentricity.

Pauline Hanson, Bob Katter and Joh Bjelke-Petersen spring to mind. But none, not even at the height of their wackiness and populist jawboning, could hold a candle to the enigmatic founder of the Palmer United Party in his debut year as a politician.

When the yardstick by which we measure and compare out-there mavericks includes Palmer’s strongest weapons in politics and business, the resources tycoon is in a class all of his own.

There is the towering self-belief; the pinch-yourself audacity; the gall to look, unflinching, down the barrels of television cameras at media conferences and spout black-and-white, easily proved untruths; and the conjurer’s trick of simultaneously diverting and captivating the national media and public debate by throwing easily digestible yet worthless “chook feed” across the frenetic 24/7 news cycle.

The uniqueness, the audacity to do things his way, unrestricted by rules and orthodoxy, are a big part of his current appeal to the public. The same traits will probably bring him down. It will be bloody if the feeding frenzy starts. Because Palmer will never give up, nor admit any wrongdoing. He will fight to the awful end.

But first let’s recap the achievements. In a tweet late yesterday, Palmer said: “Tomorrow marks a year since Palmer United Party was officially registered. So much achieved so far, but much more to do.”

In one year he has made his personal brand appear to voters to be something of intrinsic national value and promise. He likes the brand a lot, too, naming his party after it, his dinosaur park resort after it, and a port he doesn’t own in Western Australia after it. With rich burnish from the appearance of multi-billion-dollar wealth (another myth), Palmer acts like Australia’s best commercial success story. Only he isn’t. Far from it.

How he pulled all of this off is academic now. But if he can somehow hold it together the ramifications for Australia will be felt for six years and more.

With the elevation this week of the Palmer United Party’s senators and hangers-on in a delicately poised chamber, Palmer’s influence is no longer a question mark. The power he now wields on the national stage makes him far more menacing, even dangerous, there than Hanson, Katter and even Bjelke-Petersen during his reign as premier.

Thousands of jobs of everyday Australians, billions of dollars in investments, the laws by which we are governed — even the relationship with China, our hungriest and most promising trading partner (and Palmer’s arch enemy) — may be influenced by the Palmersaurus. A highly paranoid man who sees many weird conspiracies, who has a record of destroying viable businesses and jobs (and torching his own money in the process), who uses his lawyers like smart bombs, and who blows up strategic relationships — with premiers, chief executives, China — is calling the PUP’s shots.

But do not bet on this lasting. It could be over in months. For perhaps the first time, Palmer has a foe much more powerful, committed and better resourced than him. If Palmer is to be blasted from politics, public life and even business, it will be because the Beijing-based leaders of the People’s Republic of China instruct their Australian lawyers to use the evidence to not just take him on but to take him out.

If it happens it will likely stem from the withdrawals, last August and September, of $12.167 million of Chinese funds. This is a relatively minuscule sum when seen in the context of China’s disastrous almost $10 billion development of Palmer’s iron ore tenements in Western Australia’s Pilbara region. These withdrawals potentially have given the Chinese an opportunity to rid themselves, the political arena and the Australia-China relationship of someone they have come to see as a sociopathic bully and menace.

On the analysis of senior criminal lawyers consulted by The Australian, the predicament for Palmer appears serious. The documents and testimony about these withdrawals that the Chinese have been steadily extracting from Palmer’s staff and companies during confidential quasi-­judicial arbitration proceedings in Brisbane, then methodically introducing into the Federal Court in Perth and Supreme Court of Queensland, are crucial pieces of a puzzle that remains partly hidden from the public.

For now, it is still a commercial dispute. It gives the Chinese great leverage in their separate and ongoing dispute with Palmer over the payment of royalties. But it is unlikely to rest there or to be quietly resolved.

The prima facie evidence in the documents points to possible serious offences — stealing and misappropriation — by someone in Palmer’s company. The Chinese give every impression of wanting these matters completely and promptly exposed to scrutiny by the public, media and the relevant authorities.

Given the documents that are on the public record already, if the police do not step in to start an investigation on their own initiative they may soon be asked to by the Chinese. There would be nothing preventing retired Supreme Court judge Richard Chesterman QC, who is leading a focused probe in the arbitration proceedings, from making a formal referral if he determines there may have been an offence, notwithstanding the agreed confidentiality of an arbitration case.

“The law has always been that the obligation of confidentiality cannot prevent someone informing the relevant authorities about possible criminal conduct,’’ Tony Morris QC, a Brisbane lawyer, tells Inquirer.

“Richard Chesterman, of all those you could get in arbitration, is the most rigorously ethical and upright, and he will do whatever is his duty as a citizen.

“Arbitration proceedings are much like a judicial process, apart from the fact that they are conducted behind closed doors; if you walked into one you would think you were in a courtroom, with formality and evidence and so on.”

Chesterman’s efforts to trace where the missing millions went, and who permitted $10m, and then $2.167m, of Chinese funds to be withdrawn from an account that was meant to be used to pay only the expenses of running an iron ore port, so far have resulted in the revelation that the smaller sum was funnelled to Media Circus Network, a Brisbane-based company involved in placing some of PUP’s election advertising.

The fate of the $10m withdrawn in early August after it was first funnelled from the National Australia Bank account to Cosmo Developments, a company Palmer controlled at the time, may be clear after Palmer, his nephew Clive Mensink, who now controls Cosmo Developments, and other key figures respond to subpoenas and legal orders.

Palmer insists claims of action or even complaint by the Chinese are an “invention”; that no money went missing; Chinese funds were not wrongfully siphoned from the NAB account to fund the political campaigning and saturation advertising for him and the PUP in the lead-up to the federal election on September 7; and all stories suggesting otherwise — particularly those published in The Australian — are fictitious beat-ups. Because, he claims, he is a risk to Rupert Murdoch’s political choice, Tony Abbott. (Murdoch is chairman of News Corporation, ultimate owner of The Weekend Australian.) The strange thing about Palmer’s denials, however, is that his own lawyers have positively acknow­ledged — in documents later filed in the Supreme Court — facts that he has rejected as false.

Greg Rudd, whose accurate summation of the defects in style and character of his brother, Kevin, during his ill-fated prime ministership might have saved the politician if he had heeded the advice, tells Inquirer: “I’ve often described Clive as a big man packed with gunpowder with many lit fuses of various lengths slowly burning towards him.

“It’s not a matter of if but when. He has this multitude of wicks, some of which we do not even know about yet, that are just burning away.”

Greg Rudd, who has spent a good deal of time in recent years in China working with companies and government officials on potential investment options in Australia and elsewhere, has a bit of time for Palmer. They get along fine. Rudd isn’t one to hurl gratuitous criticism. But Palmer’s odd behaviour and his significant influence on Australia are reasons for growing concern, says Rudd. He wants to speak about Palmer and what his ascension means for the same reasons he says he critiqued his brother at a particularly delicate time in 2010 — the health and wellbeing of Australia.

“Clive at a minute to midnight was keen to start a political party because he was having trouble getting his own agendas up as a private businessman, hence he only formed his party … weeks before the federal election,’’ Rudd says.

“I don’t think he wanted to win Fairfax for himself — he wanted to be the playmaker in the background, the way he’s always been and the way he was with Joh ­Bjelke-Petersen (when the latter was premier) — and when he won Fairfax he had to make a virtue of it. If he had not won, it would have been more dangerous for Australia because it would have lasted a lot longer. But, having won, the public scrutiny is never-ending.

“At the end of the day, he is an old-school communications and PR guy who fundamentally thinks any press is good press. So Clive will be out there saying anything and everything, and never letting the truth get in the way of a good story, because he is getting his brand out there and he thinks that means more people will respond with ‘Go Clive, you’re great, you’re sticking it up the establishment, we back you.’

“He should be getting a lot of credit for the fact he knows how to play the media. He has outplayed them at their own game. He knows that particularly in this 24/7 era of news media and social media, there is so much demand for content and regular updates that news has become more like gossip. This suits Clive so much. He said to me before the election, ‘The problem with you, Greg, is you won’t do PR stunts and you can’t do character assassinations, either.’ He knows that he can say things like ‘Wendi Deng (Murdoch’s then wife) is a Chinese spy’, and that while the whole media knows that it’s rubbish, it’ll run and run.

“But if there is one thing that is certain about politics in Australia, it is the tall poppy syndrome. We create and then we destroy. Some of those burning wicks are long, but some are very short.’’

Rudd’s experiences and contacts in China tell him there will be no reconciliation. The falling-out between China and Palmer, who first went there as a boy and tells of meeting, with his father, Mao Zedong, appears to be terminal.

“Are they going to let it go? No, they are not — they have decided they are taking him on,’’ says Rudd. “The Chinese hold the sharpest knife (with the evidence of the missing millions). You can never rule out that a deal will be done and the knife gets put back in the sheath. But in China’s mind the government is everything. They would be concerned that Clive Palmer is becoming a growing force in Australian politics and government. China doesn’t care that Clive is a menace to one side or the other of politics. They just see that he is no good for Australia or for China, or the Australia-China relationship.

“Clive will keep rising — and I think he and the PUP have a bit more to go — until there are provable facts against him. In the meantime he’s being loose with the truth and using the media, and it’s not good for the country.

“If the evidence firms up as fact … it becomes far more serious. The Chinese have learned the power of the courts and the rule of law in Australia. They will rely on these. But even if these documents and evidence of missing millions do all go to court, Clive still knows how to press the right buttons — he will be ‘protecting Australia from China’, he will go xenophobic.”

As the pressure is ratcheted up on Palmer and others in his firms to hand over documents and provide answers to the “interrogatories” arising from the inves­tigation in Chesterman’s arbi­tration proceedings, the federal member for Fairfax appears unperturbed. Rudd believes the confidence of PUP’s leader is always authentic.

“He is used to dealing with crises, apparent no-win situations and pot-of-gold opportunities — to him, this one is another move on the chessboard. In his own mind he will be convinced that he’ll win. Clive doesn’t think he’s going to go down. And he may not because the world is an imperfect place filled with injustices and a lack of logic.”