Clive Palmer signed contract restricting use of Citic funds to port operations

CLIVE Palmer personally signed off on documents that explicitly state that money in an administrative fund could only be used in port administration.

Palmer document.

CLIVE Palmer personally signed off on documents that explicitly state that money in an administrative fund could only be used in the administration of a port, contradicting his claim that the money in the account was his to use as he pleased.

Mr Palmer told the National Press Club on Monday that some $2.167 million paid to Brisbane-based Media Circus Network from an administrative account funded by China’s Citic Pacific was probably spent on advertising during the Palmer United Party’s federal election campaign, but claimed his private company Mineralogy had “got the right to do that”.

But a facilities deed signed by Mr Palmer on behalf of his company Mineralogy over the development of a port at Cape Preston in Western Australia clearly spells out that the administrative fund could only be used by Mineralogy for “the day-to-day expenses of operating, maintaining and repairing” the port.

The agreement is part of documents submitted to the Federal Court by Citic as it attempts to determine whether Mr Palmer wrongfully siphoned more than $12m of its money out of the port administrative fund to help fund his election campaign.

The dispute over the funds is at the heart of an ongoing arbitration process in Queensland between Citic and Mineralogy led by retired Supreme Court judge Richard Chesterman QC. Asked by reporters on Monday whether he was authorised to spend the money in the administrative fund, Mr Palmer said “of course I was”.

“It was my money. The money was paid to our companies,” he said.

That contrasts with the facilities deed signed by Mr Palmer, which spelt out a limited number of circumstances in which the administrative fund could be used.

The documents show that Mineralogy could only use the fund to cover costs related to day-to-day operating and maintenance expenses at the port. The funds could also be used to reimburse users of the port — such as Citic — for operational and repair work they carried out.

Mr Palmer’s admission that some of the money was spent on election advertising adds to a list of expenditures out of the fund that do not appear to be directly connected to the running of the port.

Citic has previously produced documents showing the fund was used in part to cover the cost of lawyers engaged by Mr Palmer and Mineralogy in legal disputes with Citic itself, as well as to make a payment to the Australian Fencing Federation.

The fund also appears to have been used to pay for a number of consultants’ reports over the Balmoral South iron ore project, which is owned by the Palmer-controlled Australasian Resources. The managing director of Australasian at the time was Dio Wang, who recently resigned to take up his position as a Palmer United Party senator.

Mr Palmer’s claim that he was entitled to spend money from the fund as he liked does not explain why the $2.167m cheque, plus another cheque of $10m paid from the fund to another of Mr Palmer’s companies, were described by Mineralogy in company records only as “Port Management Services”. Mineralogy did not produce any remittance advice or invoices to explain those payments and did not disclose the recipients of the money, with the ultimate destination of the funds only emerging during the arbitration process.

Mr Palmer’s claim also does not explain why he and Mineralogy appear to have resisted attempts by an arbitration process to identify how the money was spent, to the point that the arbitrators have approved the issuing of subpoenas to Mr Palmer and others in an attempt to track down the funds.

Queensland Premier Campbell Newman this week said he was surprised police had not yet started a formal investigation into the allegations around the use of the fund.

“Given the amount of information in the public domain now, I am surprised that either the WA or the Queensland police haven’t yet appeared to have initiated any sort of investigation,” Mr Newman said.

Mr Palmer is running Supreme Court proceedings against Mr Newman, Queensland deputy premier Jeff Seeney, and The Australian for alleged defamation.

He has repeatedly insisted that no money went missing last year. However, documents filed in the Supreme Court on behalf of one of his companies show it claims to have put more than $12m back into the account in May this year, days after the revelations were first published in The Australian.

Mr Palmer, who was the sole signatory to the administration fund’s account, said on Monday that he “could not recall” signing either the $10m or $2.167m cheques.

The two payments dwarfed every other cheque drawn from the account.

Citic has invested almost $10 billion building its Sino Iron mine in the eight years since it struck a deal with Mineralogy to enter the project.

Citic and Mineralogy are embroiled in a series of disputes, with the steep deterioration in relations prompting Western Australian premier Colin Barnett to claim recently that “the Chinese hate Clive Palmer”.

“In their view, and I think they are right, he’s taking unfair advantage of an agreement ... and he is trying to get more money out of them than was originally negotiated.”