Pauline Hanson took $200,000 from former United Australia Party

Pauline Hanson withdrew from the UAP established in her name after transferring more than $200,000 from its account.

Graham McDonald was sacked by Pauline Hanson from her United Australia Party in 2008. Picture: Lyndon Mechielsen

Pauline Hanson withdrew from a political party established in her name after transferring more than $200,000 from its main bank ­account and sacking the ­office bearers who complained that she had no right to the money, newly ­uncovered records show.

The demise of Pauline’s United Australia Party has striking parallels with the infighting now gripping One Nation under Senator Hanson’s leadership, and calls into fresh question her handling of taxpayer-funded electoral ­refunds amounting to millions of dollars.

It also entangles One Nation whip and NSW senator Brian Burston in a controversy that has dogged Senator Hanson since 2007, when PUAP banked an Australian Electoral Commission return of $213,095.49 from one of her unsuccessful tilts at federal parliament and she seized most of the party’s funds.

The transfer of funds was not illegal, but Graham McDonald, who ran PUAP at the time, said that he “didn’t think it was right”.

Senator Hanson has refused to say how much remained when PUAP was voluntarily deregistered in March 2010 without contesting another election. She would not be interviewed or ­respond to written questions from The Weekend Australian. Her ­office did not return calls yesterday. Since she first entered federal parliament in 1996, One Nation, PUAP and go-it-alone election bids by Senator Hanson have reaped more than $7.5 million in taxpayer funding even though she typically mounted no-frills campaigns with minuscule advertising compared with the major parties.

The rise and fall of PUAP happened during Senator Hanson’s wilderness years, framed by the implosion of One Nation Mk I in the aftermath of her jailing for electoral fraud in 2003 and the ­revival of the party in 2014, leading to her election last July with Senator Burston and two other One Nation candidates for the upper house.

PUAP was set up as a vehicle to secure her a Senate spot at the 2007 election, initially run by Mr McDonald and his wife, Jan, who acted as treasurer and party secretary respectively. PUAP polled short of a quota, but its vote of 4.2 per cent in Queensland narrowly qualified for a funding ­return from the AEC.

On December 17, 2007, the first tranche of $202,440.72 was paid into a Suncorp account nominated by the appointed party agent, Bronwyn Boag, a close friend of Senator Hanson, followed by the balance of $10,654.77 on January 9, 2008.

Mr McDonald said he regarded the Suncorp account at Burpengary, near their home north of Brisbane, as the principal working account of the party, used to pay bills and to deposit dues from the membership of about 1500.

In late May 2008, Mr McDonald realised that $207,000 had been electronically transferred to another Suncorp account at Ipswich without his knowledge. Mindful of Senator Hanson’s brush with the law in 2003 — which cost her 11 weeks behind bars before the conviction was quashed on appeal — he recorded a phone conversation with her “to cover our arses”. A copy of the ­recording was later provided to the Queensland police.

A partial transcript published by The Courier-Mail in 2009 has Mr McDonald telling Senator Hanson that the money belonged to the party and she needed to “do things by the book”.

She replied: “I haven’t put all this bloody hard work into this … for everyone else to have control over it (the money).”

Mr McDonald, 74, this week verified this was an accurate ­account of the exchange, in which Senator Hanson went on to say that she “had bills” to pay and legal advice affirming her right to take control of the party funds. He blew the whistle because “I was not going to go to the clink with her for (allegedly) knocking off 200-odd thousand dollars”.

Speaking from his Bribie ­Island home, Mr McDonald ­recounted: “I told her, ‘you can’t do it, it’s party money’. And she said, ‘I can, I will because it’s legal’. So all those people who put their faith in her, she just wiped them.”

The intrigue didn’t stop there. In addition to filing a complaint with the police fraud squad, Mr McDonald reported the incident to the AEC. On May 28, 2008, he was ­advised by the registrar of political parties, Shawn O’Brien: “Whether funds were inappropriately transferred from the PUAP bank account after payment by the AEC is not a matter about which the AEC has any knowledge.”

A week later, the couple were stripped of their party positions and expelled. A meeting in ­Toronto, on the NSW central coast, on June 5, 2008, appointed a new national management committee comprising Senator Hanson, Senator Burston and Ms Boag. Mr McDonald had “brought the party and Pauline Hanson into disrepute” by leaking information to the media, the minutes said.

Senator Hanson moved that the PUAP bank account opened at Suncorp Burpengary be closed, and “all the moneys” transferred to another Suncorp account in her home town, Ipswich.

As the new party secretary, Senator Burston moved that Senator Hanson be paid $1000 a week plus expenses, backdated to the founding date of the party in June 2007. She and Ms Boag would remain as signatories to the PUAP account, and it was “at Pauline Hanson’s discretion to pay ­accounts or expenses incurred on behalf of the party”.

Registering PUAP in NSW to contest the 2011 state election was discussed. It never happened. AEC records show that the party was formally wound up on March 17, 2010, as Senator Hanson toyed with other political opportunities. She ended up running for the NSW upper house as an independent in 2011, but again failed.

By then, the police investigation had run its course. A senior detective, Peter Doyle, had been assigned to the case and interviewed the McDonalds several times, the couple said. In a statement to The Weekend Australian, Queensland police said there was insufficient evidence to support an allegation of fraud. Further, the “governing committee” of PUAP — presumably, the troika led by Senator Hanson — had advised that the party “did not wish to make a criminal complaint”.

Despite a specific 2008 referral from then special minister of state John Faulkner over Mr McDonald’s allegations, the AEC had no grounds to pursue the disbursement of the $213,000 election return. A spokesman for the agency said there were “no limitations in the Commonwealth Electoral Act … regarding the manner in which a political party spends election funding received under the Electoral Act”.

Mr McDonald said he was ­astonished by the lack of accountability. “Had she been running as an independent, fair enough. But to take the money from a registered party account and ... to get herself back paid to the time the party started … well, I didn’t think it was right back then and I still don’t,” he said.

Senator Burston said he did not have a clear recollection of the 2008 events, as it was “a long time ago”. Asked whether there was any money left when PUAP ceased operating in 2010, he said: “I have no idea. (If there was) I ­assume it was forwarded to ­another party of similar ilk. I will have to check it out for you.”

Senator Burston did not ­respond to repeated requests for the follow-up information.

Ms Boag insisted that the transfer of funds from the PUAP account at Burpengary to Ipswich had been legal and she wouldn’t “have a bar of … people muck­raking, looking to put dirt” on Senator Hanson.

“I’m out of it now,” Ms Boag said. “You should discuss this with Pauline.”

Senator Hanson has repeatedly rejected accusations that she profited from running for One Nation, PUAP or as an independent candidate at federal elections or at the state level in NSW and Queensland, on occasion bristling when the allegations were put to her. “I have not claimed any money personally from any elections,” she told The Australian while campaigning last year for the Senate.

Taking a lead from Malcolm Turnbull, she sank $191,000 of her own money into One Nation in the lead-up to the July 2 election. But unlike the Prime Minister, who donated $1.75m to the Liberal Party to keep its campaign afloat, Senator Hanson’s offering was a loan, which was repaid by the party from the $1.62m refund it ­received from the AEC. At the federal level, Pauline Hanson’s One Nation Mk I ­received refunds totalling $4,388,170 from general elections in 1998, 2001 and 2004. Senator Hanson netted $199,886 when she unsuccessfully ran for the Senate as an independent in ­competition with her former party in 2004.

On top of this, One Nation, ­despite being without its drawcard of Senator Hanson, received funding for the 1999 NSW state election totalling $679,251.

The Electoral Commission of Queensland paid entities associated with One Nation or Senator Hanson $127,673 in election refunds between 2007 and 2015, available records show.

One Nation has been rocked by leaks to the media of secret recordings of sensitive conversations and meeting proceedings that embarrassed Senator Hanson and her chief of staff, James Ashby.

In one covertly taped ­exchange, Mr Ashby floated a plan to submit inflated election expenses to the ECQ to increase its financial return from the next Queensland election; in another, Senator Hanson seemed to suggest that a Melbourne property developer had funded the purchase of a light plane for the party, when the donation had not been disclosed to the AEC, as required by electoral law.

Senator Hanson this week dropped legal action to prevent the ABC from broadcasting further covert recordings, which she blames an ex-insider for leaking.