Save Search

Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 21 April 1999
Page: 4005


Senator CALVERT (1:24 PM) —Like my colleague, Senator O'Chee, I wish to address some of the recent disclosures about the conduct of the former Prime Minister, Mr Keating. The facts now in the public domain raise questions of the misuse of power for personal gain, illegality, criminal tax evasion, gross impropriety, cover-up and lies. They raise the most serious questions about the corruption of Australian federal institutions which had hitherto been regarded as incorruptible—in particular, but not exclusively, corruption of the prime ministership and the Commonwealth Bank of Australia, as my colleague has already said here today.

In the long history since Federation nothing like such serious allegations has ever been raised against any federal minister, let alone a prime minister. Internationally, the allegations are to do with matters which are far worse than Watergate. The allegations, which are to do with the use of the prime ministership for massive personal financial gain, are infinitely more serious than the recent allegations about Bill Clinton. Internationally, the terribly sad—but more accurate—comparison is with banana republic behaviour or with the korruptsi which was commonplace in the Indonesia of Paul Keating's friend, President Suharto.

Published statements and documents now on the record raise a clear prima facie case of capital gains tax fraud by Paul Keating. We all know that tax fraud is a criminal offence.


Senator Bolkus —Mr Acting Deputy President, I raise a point of order. I know of your earlier ruling with respect to former prime ministers. Obviously, Senator Calvert did not write this speech, because he actually has problems reading it. It was probably written in the Prime Minister's office by Tony O'Leary and that group. Here we have allegations of criminality against people in a situation where the government itself is already saying that these matters are being investigated. I say that it is totally out of order for Senator Calvert to be reading Mr Tony O'Leary's speech into the Hansard when at the same time he is really reflecting very badly on the innocence of an individual.


The ACTING DEPUTY PRESIDENT (Senator Murphy) —Order! Senator Bolkus, there is no point of order.


Senator CALVERT —I just make the point that this is not a Tony O'Leary speech. Firstly, I wish to draw the Senate's attention to the carefully worded memorandum of advice which was drawn up by the Asian advisers to the purchasers of Paul Keating's half share of the piggery. The information in this memorandum is clearly corroborated by other written material. The information is a record of advice from Paul Keating's lawyer, Chris Coudounaris, about how he structured the payment of the $US6 million for Paul Keating's half share of the piggery to avoid possible political repercussions.


Senator Bolkus —Mr Acting Deputy President, I raise a further point of order under the standing order that goes to repetition. This speech was made a few months ago before the last federal election.


The ACTING DEPUTY PRESIDENT —There is no point of order, Senator Bolkus.


Senator CALVERT —Lawyers who have studied this document regard it as extraordinary. It is rare in tax fraud investigations to see the evidence of intent so clearly spelt out. The explanation is presumably as simple as this, that the Asian advisers to the purchasers were careful people who wanted to get it right. To put it simply, this document is evidence of Paul Keating's intent to defraud the Commonwealth revenues while Prime Minister of Australia.

A Gadens Ridgeway trust account statement tabled last year in the Senate is evidence that the scheme or structure which Paul Keating designed to evade tax was on the face of it implemented. The authenticity of this document has not been challenged. For all that, there are many questions about the reality of the transactions.

Finally, what Achilles Constantinidis told the Channel 9 60 Minutes program was dynamite. What Constantinidis told Channel 9 was that $1.35 million of the $1.9 million that was injected into a company controlled by him to make it look as if it was an equity injection was in fact paid to Paul Keating. According to Al—and I quote—


Senator Bolkus —It is `Al' now, is it? They are good mates.


Senator CALVERT —Al Constantinidis, and this is quoting from the 60 Minutes program, said:

That money did not go to Brown and Hatton Rural.

60 Minutes: Well, this document, this trust statement, says it did.

Al Constantinidis: Well, I think that trust statement says that it was applied to Brown and Hatton Rural. It physically did not go to Brown and Hatton Rural.

60 Minutes: Can you be absolutely sure of that?

Al Constantinidis: Categorically.

So where did the money go? 60 Minutes uncovered the existence of a second trust account document detailing that $1.2 million of these millions was channelled to a Keating trust company. I seek leave to table this document.

Leave not granted.


Senator CALVERT —The cover-up continues. It is a printed document. It is not a handwritten document like the previous one. But the Labor Party will continue to cover this up, just like the former Prime Minister did. Not even Constantinidis knew of this payment to his partner, the then Prime Minister. Quite obviously, this raises the question of falsification of accounts, a very serious matter. But of even more importance, Al Constantinidis confirmed that the intent to evade tax by the scheme outlined by Keating's lawyer was coupled with an actual transaction as outlined in the scheme.

Secondly, I wish to draw the Senate's attention to the fact that it is beyond question that the Indonesian purchaser agreed to pay Paul Keating $US6 million for his half share of the piggery. No problem. Mr Keating himself told Kerry O'Brien on the 7.30 Report last year that he only got a minority of that money. He said that the rest of the money went on fees, payments to the banks, et cetera. From the point of view of capital gains tax it is immaterial, of course, how the recipient of the gain arranges for it to be spent, whether it is on bank debts, running costs or whatever. The gains include capital gains by way of the sale of options.

The really important thing is that Paul Keating obviously recognises this point when he asserts how much his partner, Al Constantinidis, got for the sale of the piggery. Mr Keating said that Constantinidis got over $9 million, irrespective of whether some of it went on repayments to the bank. On the other hand, Mr Keating says that he himself got only a minority. Come on, Mr Keating! Pull the other one. Fair dinkum. For him to blame Constantinidis and say that Constantinidis got $9 million and that he himself only got a minority, I find very hard to believe.

Does anybody really expect us to believe that Mr Keating's half share partner got more out of the Indonesian purchasers than he got himself? Of course they don't. This is particularly so, of course, when it is recalled that the purchasers were Mr Keating's purchasers, introduced to Mr Keating by Warren Anderson's colleague, John Benson. So they weren't Mr Constantinidis's purchasers; they were ones introduced by Mr Keating himself. The deal was done by Mr Keating and his associates with the Indonesians. Al Constantinidis had nothing do with the workings on the deal with the purchasers. For Al Constantinidis to have got more than Keating from these purchasers is totally unbelievable.

In saying that Al Constantinidis got over $9 million it would appear that Mr Keating is also counting as Al's moneys those which were to be channelled through Al to Keating himself. If Mr Keating applied the same logic to what he personally got to what Al Constantinidis got, then he would be owning up to the following: that in 1994 the Indonesians agreed to pay him $US6 million for his half share and, according to Constantinidis, a further $A1 million for his option in 1996, this totalling approximately $US8 million, or well over $A10 million. Paul Keating could only have admitted to this if it squared with what he had told the Australian Taxation Office in the two subsequent years.

It is no longer good enough for Mr Keating to refer journalists to his accountants, who he claimed will vouch that his `tax affairs are completely A-okay'. As noted above, when under pressure last year, the same Mr Keating said he only got a minority, that is, less than $3 million. This was some increase on the fictional purchase price that has been spoken about of $US600,000, referred to in the information provided by Chris Coudounaris himself to advisers to the Indonesian purchasers, which was part of the scheme dreamt up to evade tax. However, the fact remains that there is a huge gulf between Mr Keating's admission of only a minority, that is, less than $3 million, and the Indonesians' agreement to pay him in Australian dollars well over $10 million. I think it is quite evident that, even with the limited resources that 60 Minutes have, they have established that he received at least $4 million.

So it is time for the former Prime Minister to own up to the allegations of criminal evasion of taxation that he perpetrated on the Australian taxpayer while he was Prime Minister of this country. As mentioned by Senator O'Chee, I too intend to draw these observations to the attention of the Attorney-General.