Clive Palmer tried to cover his tracks over $12m of China money, court hears

CLIVE Palmer knew he shouldn’t spend more than $12m of Chinese money on his political party, but did it anyway.

Clive Palmer’s “sham’’ document is evidence of his dishonesty, Queensland’s Supreme Court has heard.

CLIVE Palmer knew he shouldn’t spend more than $12m of Chinese money on his political party and elsewhere, but did it anyway and then “hastily” tried to cover his tracks, a court has heard.

Barrister Andrew Bell SC, for Mr Palmer’s disgruntled Chinese business partners Citic Pacific, today seized upon the politician’s decision not to testify at the high-profile Queensland Supreme Court civil trial.

Dr Bell argued that because the Palmer United Party leader had chosen not to explain whether he’d made an honest, or dishonest, error in spending the $12.167m, Justice David Jackson should find he was dishonest.

The trial turns on two large payments - of $10m and $2.167m - Mr Palmer made in August and September 2013 from a bank account established to manage a Western Australian export port. He used the cash for political advertising, to furnish the coffers of PUP, and pay off an American Express bill, among other objectives, instead of strictly for port management _ as Citic Pacific argues it should have been.

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The Chinese government-owned investment conglomerate is partners with Mr Palmer’s Mineralogy company in a giant iron ore project called Sino Iron in WA’s Pilbara region. The Chinese paid money into the account, Port Palmer Operations, for management of a related port at Cape Preston.

The case turns on whether the account was a trust, as argued by Citic, or not, as pressed by Mr Palmer. Much of today’s proceedings have been occupied with detailed legal argument about this conflict in opinion.

Dr Bell said Mr Palmer knew the cash in the Mineralogy account should only have been used for port-related purposes because he had signed a contract to that effect, was then the sole director of Mineralogy, and the CEO of the port reported directly to him.

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He says Mr Palmer’s “hastily thrown together” creation in April or May this year of a “sham” backdated document attempting to justify the contentious payments was “powerful” evidence of his dishonesty, after Citic began “shouting from the rafters” about the payments.

“Those are not funds at the general disposal ... of Mineralogy to use as it requires,” Dr Bell said.

Mr Palmer has strenuously denied any wrongdoing. He is defending the lawsuit and his barrister, Simon Couper QC, is making submissions this afternoon. He has begun to outline why the account was not a trust, and why Mr Palmer could use the money as he saw fit.

The trial continues.