With the upper house balance of power soon in his grasp, the PUP leader has approached senators Xenophon and Madigan to join his bloc. By Sophie Morris.

Clive Palmer’s bold bid to build his senate bloc

PUP leader Clive Palmer outside Parliament House, Canberra.

In this story

It was in Clive Palmer’s Parliament House office – surrounded by pictures of the billionaire gladhanding people such as Bill Clinton – that Democratic Labour Party senator John Madigan sat down for a meet-and-greet last month.

A fortnight ago, Palmer followed up with a phone call, encouraging the former blacksmith to forge a voting alliance with his eponymous party. As he waits for the new senate to sit, Palmer has tried to amass an even larger bloc than the four seats he controls, comprising the three Palmer United Party senators-elect and the vote of the Motoring Enthusiasts’ Ricky Muir. 

Madigan is understood to have rebuffed Palmer’s overture about a possible memorandum of understanding between their parties. He declined to provide The Saturday Paper with details of what was discussed, but his spokesman confirmed there had been a meeting and a phone call.

“We will work with anyone where there’s common ground,” the spokesman said. “But there’s no blanket agreements with anyone being signed.” 

Nick Xenophon would not comment on his own private conversations with Palmer, who is believed to have also approached the independent senator for South Australia. But Xenophon said: “I can understand why Clive would want to have more people inside his bloc, but I would be a blockhead to be part of any voting bloc.”

The other two crossbenchers – Liberal Democrat David Leyonhjelm and Family First’s Bob Day – have teamed up to vote together on economic matters, where their right-wing views align.

Palmer’s control of four crossbench senate votes in the upper house after July 1 means the government has no choice but to deal with his group. To pass legislation opposed by Labor and the Greens, the Coalition will need support from at least six of eight crossbenchers.

On the face of it, Madigan and Xenophon would be odd partners for Palmer. But Palmer specialises in odd partnerships. His ragtag band of novice senators-elect includes sawmill labourer Muir, rugby league great Glenn Lazarus, former soldier Jacqui Lambie and engineer Dio Wang.

Madigan and Xenophon have some views in common with Palmer. They have both criticised budget measures as unfair and both supported the abolition of the carbon tax. Yet neither was interested in teaming up with the PUP.

It is unlikely that Madigan or Xenophon would have been swayed by any offers of largesse, if any were made or implied. They both make a virtue of frugality and budget airfares, whereas Palmer delights in conspicuous consumption, flaunting his private jet and fleet of vintage cars. 

There’s no evidence or suggestion of financial inducement. But Palmer is known for fabulous generosity when it suits, disbursing gifts of overseas travel and cars to employees with an Oprah-like abandon. Last month he, or his party, paid for his senate team to take a five-star team-bonding trip to Boston.

Madigan, who has struggled with staffing issues, would more likely have been tempted by an appeal that in banding together the crossbenchers might have a better chance of securing extra resources to scrutinise legislation. If he was tempted, however, he resisted.

The approach came at a time when Palmer was vowing not to negotiate budget measures with Prime Minister Tony Abbott unless the government offered extra staff to his group.

From his lower-house seat of Fairfax, Palmer seems to be relishing his party’s looming balance-of-power senate role. His approaches to other crossbenchers show he is intent on wielding and extending his influence. But the government is still unsure exactly what his objective is, beyond wreaking havoc for the Coalition. In this, he is excelling.

While refusing to meet Abbott, he was fomenting leadership paranoia among Liberals by heaping praise on Malcolm Turnbull after being photographed dining with him at a Chinese restaurant in Canberra.

The morning after the dinner at Wild Duck, Palmer gave a typically colourful account, recommending the banana split. He then spun another day of media coverage out of it by releasing a statement ostensibly defending Turnbull but in reality niggling Abbott. ‘‘I can understand why Tony Abbott is concerned about Malcolm because he is witty, successful and smart,” he said.

Palmer is, of course, a creature of the Coalition. For a long time, he was its biggest donor in Queensland and even a life member. Then the relationship soured, over mining approvals and political fiefdoms in the merged Liberal National Party. Now he is a thorn in its side.

How is the Coalition supposed to deal with him when the LNP deputy premier in Queensland, Jeff Seeney, has labelled him a “crook” in parliament? When the Liberal premier of Western Australia, Colin Barnett, has accused him of using parliamentary power to push his commercial interests? When the prime minister has attacked him for perverting democracy by trying to “buy seats”?

Yet deal with him they must.

A document that Seeney sent to the Crime and Misconduct Commission this week gives an insight into how Palmer the businessman deals with governments that obstruct his commercial interests.

The document, revealed in The Australian and The Courier-Mail, was a three-page proposed “terms of settlement” that Palmer’s private company, Waratah Coal, apparently sent to the Queensland government early last year. 

By that time, the state LNP government had infuriated Palmer by granting a rival consortium, of GVK and Gina Rinehart’s Hancock Coal, exclusive rights to a rail corridor in the Galilee Basin.

In the document, Waratah, which was contesting this decision, offered to “discontinue all current litigation” and drop all claims against the state government. In exchange, the government would “arrange for approval” of the Waratah coal corridor as an “infrastructure facility of significance”, allowing the company to acquire land from farmers to build the 450-kilometre rail line and effectively revoking the GVK and Hancock decision.

A similar declaration would be extended to a proposed jetty and the government would indemnify Waratah and “Professor Palmer” from any legal action for three years, barring offences under the criminal code. It would also promise no law or policy changes that would impede the project.

The goal was the streamlined approval and development of Waratah’s $8.4 billion China First coal project, involving mines, the rail line and a port. The deal would have been “entirely inappropriate”, said Seeney, acknowledging he should have referred it to the corruption watchdog sooner. 

Seeney’s decision to escalate the fight now, on the eve of Palmer’s party grasping the balance of power in the federal senate, is a curious one. He has sought to completely discredit the PUP. “The Palmer United Party is all about seeking revenge for the fact that he was not able to get the special treatment from our government that he sought,” he said.

Palmer labelled Seeney a “liar and a criminal” and argued there was nothing untoward in his company’s offer to abandon litigation. 

He told Guardian Australia the document related to a judicial review of a government decision about developing the Galilee Basin, and in this context there was nothing unusual in proposing to cease the litigation.

“This particular case was arguing the government had made the wrong decision,” he said, “so it flows from that our position would be we wanted the decision reversed.” 

The federal government acted swiftly to avoid Palmer’s wrath over delays in environmental assessments. Just days before Christmas, Environment Minister Greg Hunt provided federal approval for Waratah’s China First project, with 49 conditions.

At the time, federal Greens senator Larissa Waters raised concerns about a conflict of interest. “One wonders whether Tony Abbott is doing Clive Palmer a favour now, because he is going to want some favours later on in the senate,” she said.

1 . Picking fights

The approval of the coal venture may have avoided one potential irritant in the relationship at a federal level. But others have since surfaced as Palmer gleefully picks fights.

With Abbott struggling to persuade the Coalition of the merits of the generous paid parental leave policy that he has taken to two elections, Palmer took a swipe at the PM’s chief-of-staff, Peta Credlin, as he attacked the scheme, claiming it was designed to benefit her.

This jibe at Credlin was not only unkind, but also inaccurate. For Palmer, though, the furore and condemnation that followed simply meant more attention as he continues to raise his profile.

He has thrived on free publicity generated by his colourful style and willingness to poke fun at himself and others, playing brilliantly to the caricature of the preposterous pie-eating tycoon, who nevertheless poses as a man of the people.

As July 1 approaches, Palmer will face more intense scrutiny. That’s something he is not particularly keen on. He has blacklisted The Australian for its dogged pursuit of him and critical coverage of his commercial interests, accusing the paper of printing Rupert Murdoch’s lies. 

He also infuriated veteran Channel Seven TV reporter Mike Willesee by failing to show up for a promised interview in Boston, and deflecting questions with jokes when they finally met at his resort and dinosaur theme park on the Sunshine Coast. 

As the pressure increases, it will be fascinating to see how united the Palmer United Party will be and whether the PUP senators will have minds of their own or be mere puppets for their leader.

Tasmanian senator-elect Jacqui Lambie is the least reticent of the PUP group. She has already freely ventured her own opinions: bring back national service, slap more taxes on big banks. She adds another idea in comments provided to The Saturday Paper, saying one of her priorities will be introducing an “Australian Diggers Bill”, similar to the United States GI Bill, which offers free university education or trade training for military personnel after a certain period of service.

“My first loyalty will always be Tasmania,” she says. “However, since my days in the Australian Army I’ve always appreciated the value and strength of being a team player.”

As the chief-of-staff, she has Rob Messenger, who was an LNP politician in Queensland but quit the party in 2010 and then lost his seat at the state election. If the government provides extra resources, Lambie says she also wants to hire Geoff Evans, a veterans’ advocate and former commando who was wounded in Afghanistan, as well as whistleblower Jo Barber.

If Madigan and Xenophon had opted to join Palmer’s posse, the agreement might have looked like the one the PUP reached with the Australian Motoring Enthusiast Party, just weeks after the federal election.

In that deal, Palmer and the reclusive AMEP senator-elect Ricky Muir pledged their parties “to work together and where it is practicable to vote together in the senate”. It is unclear how binding the deal will be. It also stipulates that neither party is required to vote for “legislation that is against his or her party’s policy and principles, or against their conscience”.

But it has already had benefits for Muir who, along with advisers, flew to Boston in a trip paid for by Palmer or his party. There, Muir had his first real exposure to the media. In a tongue-tied interview with Willesee on Channel Seven’s Sunday Night, he struggled to articulate his political goals. 

Until then, his minders had insisted the father-of-five, who was elected with just 17,000 votes or 0.52 per cent of the vote in Victoria, was too busy earning a living to talk to journalists or even to meet the prime minister.

Likely guiding him through his debut in federal politics will be Glenn Druery, the so-called “preference whisperer”, who advised micro-parties on how to game preference flows to secure a senate spot. Druery has previously advised the PUP but says he’s not on Palmer’s payroll.

Under Druery’s tutelage, Muir is likely in future to be shielded from the intense media interest that awaits the new senators come July. Druery says Muir will be prepared to talk to journalists, but only in circumstances with which he is comfortable.  

“It’s unlikely there would be a free-for-all, or a feeding frenzy. I won’t be throwing him to the wolves,” says Druery, who speaks as if he is already working for Muir, although he adds that his employment has not yet been finalised.

“Ricky is who Ricky is. He’s a country boy from a little town in central Victoria, who works in a sawmill.”

Now Muir is also part of a team that will decide the fate of government legislation. It’s a team led by a man who is used to getting his own way, so much so that when the party he funded in Queensland thwarted him, he set up his own rival political outfit. He has ridden a wave of disenchantment with the major parties to a position of great influence. 

And as Palmer’s overtures to other crossbenchers show, his quest for power is not over yet.

This article was first published in the print edition of The Saturday Paper on Jun 14, 2014 as "Professor Palmer’s indecent proposal".

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Sophie Morris is The Saturday Paper’s chief political correspondent.