Fitzgerald Inquiry: Kaldeal Pty. Ltd.

Section: 2.4.1 Political Donations.

Part: (c)

By mid-1985, Lyons was out of favour with the National Party management. Earlier that year he had been forced out of the chairmanship of the T.A.B. because of his conduct, and had also stepped down as chairman of the Mortgage Secondary Market Board to which he had been appointed in late 1984. He was unpopular with Sparkes, and others, like Hinze, had long disliked him intensely. However, he was still extraordinarily close to Bjelke-Petersen. As he stated in evidence to this Inquiry, Bjelke-Petersen considered that Lyons was his most valuable adviser, “ ... because he had been at the top of business here for many years and he knew so very, very many people, even perhaps more than I did”.

Nonetheless, after the National Party State Management Committee meeting on 26 July, 1985, Lyons was no longer a party trustee.

By mid 1986, another election was in the offing. The Government’s term was due to expire in November that year. If it was to retain government in its own right, then once again a large amount of money was needed for advertising and other campaign expenses.

By July, 1986, there was also tension between Sparkes and Bjelke-Petersen, who was experiencing not only occasional challenges to his autocracy but even the odd defeat. He and his fund-raiser, Lyons, decided to act on their own.

There were no public indications at that time that Bjelke-Petersen intended to seek election to the Commonwealth Parliament. Both Bjelke-Petersen and Lyons denied that the money that they commenced to raise in the latter part of 1986 was intended for that purpose. If it had been, non-disclosure of the donors might have involved a breach of Commonwealth electoral legislation.

In July 1986, Kaldeal Pty. Ltd. was incorporated. Its directors and shareholders were Lyons and another prominent National Party supporter from Bjelke-Petersen’s electorate, William Roberts. Moneys which Kaldeal Pty. Ltd. received were deposited to its’ solicitor’s trust account.

(i) The Asian Businessman

In September 1986, Bjelke-Petersen was introduced to an Asian businessman by another prominent member of the National Party. Prior to that time, the businessman was a stranger to Bjelke-Petersen. They discussed investment in Queensland, and spoke for about 10 minutes of the businessman’s interests in cocoa plantations and his desire to invest in hotels in Queensland.
 

At that meeting, the businessman handed Bjelke-Petersen a bag containing $100,000 in cash and said, according to Bjelke-Petersen, “ ... we want to help the party. We’re interested in the way you operate”.

Bjelke-Petersen did not disclose the donation to the National Party, and it was deposited into the account of Kaldeal on 29 September, 1986. That was the first amount paid to Kaldeal.
Bjelke-Petersen later met the businessman again, and directed his secretary to telephone the Land Administration Commission on the subject of North Queensland land which was suitable for cocoa growing.
The effect of his evidence was that he did not otherwise act to assist the businessman, and was not asked to do so.
Prior to meeting Bjelke-Petersen, the businessman had made a donation of $15,000 to the National Party on 3 March 1986.
At about the same time as he met Bjelke-Petersen, he made another donation of $100,000 to the National Party on 22 September 1986.
Subsequently on 30 June 1987, he donated a further $50,000 to the National Party.

(ii) The Unknown Donor(s)

In October 1986, two anonymous cash donations were left at Bjelke-Petersen’s office. One was for $60,000 and the other was for $50,000. Both were deposited with Kaldeal on 16 October 1986.
Both Bjelke-Petersen and Lyons handled or at least knew of the money but both denied any knowledge of its source or the circumstances surrounding the donations.
No record of the donations was made by Bjelke-Petersen or his staff and no receipt was issued.
The police officer who was Bjelke-Petersen’s personal bodyguard took the money to Kaldeal’s solicitor’s office.
 
(iii) Citra

On the same day, 16 October, Citra made a donation to Kaldeal of $100,000 by bank cheque.
 
(iv) Other Donations

Lyons raised funds for Bjelke-Petersen through Kaldeal. Lyons’ fund-raising proclivities were well known, and he was approached with offers of donations. It is unlikely that his role was entirely passive. In any event, when discussions occurred, he would mention Kaldeal and provide a draft letter in the following terms to be forwarded with any donation to it:
 
“I enclose herewith a cheque for $         to be used at your discretion in support
of the National Party candidate and/or the National Party in the forthcoming
State election”.
 
A standard letter enclosing the draft was in the following terms:

“In accordance with our discussion I enclose herewith a draft letter which will
cover the forwarding of any cheque.
‘Your support and assistance is really appreciated and will go a long way towards
helping what we both want to achieve with our dear friend back in the saddle’.”

Kaldeal received a total of $824,000 prior to the 1986 State Election. A surplus of approximately $200,000 remained after payment of incorporation and incidental expenses and payments to the National Party and on account of its election expenses and election expenses of individual National Party candidates.

In November, 1986, the National Party was again elected.

On 31 December 1986, Kaldeal received a further donation of $40,000.
Early in 1987, slightly in excess of $12,000 was paid by Kaldeal to support candidates opposing Sparkes for the presidency of the Queensland Branch of the National Party.
 
By early 1987, Bjelke-Petersen was embarked on his campaign to enter federal politics.
In February or March 1987, an advice was sought from a senior barrister as to whether Kaldeal could make donations or payments in relation to a federal election campaign without disclosing the source of the funds, However, evidence was given before this Inquiry that none of Kaldeal’s funds were used to support Bjelke-Petersen’s unsuccessful attempt to obtain election to the Commonwealth Parliament.
On the other hand, Queensland Government resources were deployed. For example, Bjelke-Petersen used the Government aircraft to attend a campaign rally in New South Wales. He said that what he did was justified in the same way as a trip to Turkey for the purpose of “ ... doing a number of coal deals”. As he modestly put it:
 
“we are doing it in the interests of Australia and not any personal reason. We
did it to try and further the interests of the people in this State, in this nation.”
 
On 21 October 1987, Kaldeal received two further donations totalling $25,000, one of $22,500 and one of $2,500. As at 18 November 1988, Kaldeal had $262,333 in its bank account and, presumably, it is still there.
According to Lyons, there was never any question but that he and his co-director would act in accordance with Bjelke-Petersen’s wishes. He agreed that Kaldeal’s funds could be used for any political purpose which Bjelke-Petersen directed.