Clive Palmer cut $6m pre-poll cheque

CLIVE Palmer went on a spree after siphoning $10m of Chinese funds into a bank account he controlled, according to fresh documents.

Clive Palmer addresses federal parliament this week. Picture: Ray Strange

CLIVE Palmer went on a spending spree after siphoning $10 million of Chinese funds into a bank account he controlled, according to fresh documents lodged in the Queensland Supreme Court ­yesterday.

The documents, part of Mr Palmer’s formal legal defence to allegations of dishonesty and fraud, include evidence that he drew a $6m cheque on September 4 last year, three days before the federal election. The $6m cheque has not previously been cited in evidence put before the court, which has included bank statements, witness testimony and other documents.

The cheque’s existence was disclosed by Mr Palmer’s lawyers yesterday in an annexure document to his 12-page defence.

It shows that the $6m cheque was the first one drawn on a newly opened account, of which Mr Palmer was sole signatory, for a company he controlled, Cosmo Developments Pty Ltd.

Other documents disclosed over recent months show Mr Palmer personally withdrew $10m, on August 8 last year, from an NAB account, “Port Palmer Operations”, which held China’s cash for the purpose of funding the port at Cape Preston. Mr Palmer’s company would send invoices, resulting in the Bank of China depositing more than $23m into the account.

The $10m that Mr Palmer withdrew on August 8 last year was then deposited by him into the Cosmo Developments account that he alone controlled.

The evidence has previously disclosed that Mr Palmer paid for advertising for his Palmer United Party by drawing a cheque on September 2 last year for $2.167m directly from the “Port Palmer Operations” NAB account. The $2.167m cheque, signed by Mr Palmer, went directly to Brisbane agency Media Circus Network, which handled PUP’s costly media campaign.

The disclosure yesterday of the $6m cheque — and its timing of September 4 last year — will fuel speculation that these funds were also channelled into the PUP campaign. The recipient of the $6m cheque has not yet been disclosed on the public record.

If the $6m was spent on PUP’s campaign it would mean most of its costs in standing candidates, leading to Mr Palmer’s narrow win in the seat of Fairfax and the party achieving the balance of power in the Senate, was bankrolled unwittingly by the Chinese government.

Other documents show that Media Circus sent an invoice to PUP for $2,167,065.60 on August 31 last year, payable “immediately”, as “August and September media booked and approved” would cost $7,167,065.60.

Mr Palmer’s company, Mineralogy, told the Chinese government-owned company Citic Pacific last year that its money was spent on “port management services” for its iron ore port in Western Australia.

Mr Palmer’s formal legal defence in the Supreme Court “breach of trust” case denies he was involved in any dishonesty or wrongdoing, and insists “Palmer did not know that the funds in the bank account were trust funds, if it be the case, which is denied”. It adds that a “reasonable person with knowledge of the Facilities Deeds” – (the deeds describe how China’s money was to be spent running the port) – “would not have known or suspected that the funds in the bank account were trust funds”.

Mr Palmer’s lawyers told the Supreme Court in their document yesterday that the payments “have not resulted in a profit or benefit for Palmer”.

They added that he had been rebuffed in his attempts to pay “unconditionally the sum of $12,167,065.60”, plus interest.

His legal defence admits that “the sum of $2,167,065.60 paid to Media Circus (in September last year) was paid in discharge of obligations made by the Palmer United Party to Media Circus”.

In documents filed by the Chinese companies, Mr Palmer is ­accused of dishonesty and of ­involvement in the creation of a “sham” document — a “purported” agreement for one of his companies to perform port-related work to the value of about $12m.

Mr Palmer’s legal defence “admits that the 2013 budget (for the port) made no provision for a one-off item of expenditure of $10m in August 2013 or at all and admit that the 2013 budget made no provision for a payment to Cosmo”. His defence also “admits that the 2013 budget made no provision for a one-off item of expenditure of $2m or $2.167m in September 2013 or at all and (admits) that the 2013 budget made no provision for a payment to Media Circus”.

It accuses the Chinese government-owned companies, which are mining iron ore from his tenements, of depriving his own company of “the benefit of substantial royalties”. Mr Palmer told the ABC’s Q&A that the Chinese were “mongrels” and “bastards” in commercial disputes with him.

His legal defence states that the purpose of the Chinese companies in “prosecuting these proceedings is to apply illegitimate pressure to the first defendant (Mr Palmer) to advance” commercial interests of Citic Pacific’s subsidiaries, Sino Iron and Korean Steel. Mr Palmer’s defence also admits that “at no time during 2013 or until May 2014” was his own executive overseeing the port, Paul Robinson, “aware of the $10m payment”.

A Supreme Court civil trial before Justice David Jackson, QC, has been set down for three days in late November. The allegations of fraud and dishonesty are likely to be referred to police.