FITZGIBBON’s $150,000 from CHINESE DEVELOPER: SPECIAL INVESTIGATION – Former Defence Minister cultivated over years


Fitzgibbon’s $150,000 from Chinese developer: SPECIAL INVESTIGATION – Former defence minister cultivated over years


The Age [Melbourne, Vic] 03 Feb 2010

PRIVATE records of a Chinese-Australian businesswoman close to former defence minister Joel Fitzgibbon indicate he received substantial payments as part of a campaign to cultivate him as an agent of political and business influence.

The confidential papers of businesswoman Helen Liu contradict claims last year by Mr Fitzgibbon and his father, former Labor MP Eric Fitzgibbon that they had no financial or business relationship with Ms Liu. Mr Fitzgibbon resigned from Cabinet last June after it was revealed his brother, NIB Health Funds chief Mark Fitzgibbon, had used his office to lobby for defence health contracts.

The minister’s political standing had already been weakened by his failure to disclose that he had accepted two first-class flights to China bankrolled by Ms Liu, a wealthy entrepreneur with high-level political and military contacts in Beijing. He was also renting his Canberra residence from the Liu family.

The documents obtained by The Age show Ms Liu recorded her 1997-98 payment of 850,000 Chinese yuan approximately $150,000 at the then current values to Joel Fitzgibbon under the heading “money paid including expenses and gifts”. The same document shows Ms Liu recorded the establishment of a joint venture with the Fitzgibbon family, including reference to “Eric (Fitzgibbon) as agent. Regular visits to China. $3 million for start up”.

In a letter to a senior Bank of China executive, Ms Liu wrote that Joel Fitzgibbon would become a cabinet minister when federal Labor won power, adding: “The money we pay him is worthwhile.

The Age can also reveal that the office of Deputy Prime Minister Julia Gillard was told in April last year by lawyers for a former business associate of Ms Liu that Mr Fitzgibbon may have had more extensive dealings with the businesswoman than acknowledged.

In response to the latest disclosures, Mr Fitzgibbon said he had already declared all he was required to about his relationship with Ms Liu, who returned to China late last year where she remains. Last night she would not comment. Mr Fitzgibbon said:

“I totally reject the suggestion that I have received any money from Helen Liu beyond campaign donations which were appropriately declared as required.”

He would not comment on his father’s dealings with Ms Liu. However, Eric Fitzgibbon who last year denied any commercial ties to Ms Liu has this week disclosed that he has worked for the businesswoman by helping sell apartments in her property development in Qingdao, in China’s Shandong province.

The former MP, who does not speak Chinese, said he was not paid in cash, but had his accommodation, travel and other expenses covered. Eric Fitzgibbon told The Age this week: “They were building a hotel, a major development in a part of China. They asked me if I would like to give them a hand for the selling of the units. I appreciated the opportunity.”

The 135 pages of personal and business records obtained by The Age after a 10- month investigation include a list prepared by Ms Liu recording “money paid” for unstated purposes to 22 individuals, including Joel Fitzgibbon, variously connected with her property interests in Sydney and Qingdao.

The list, apparently written in late 1998 or early 1999, includes senior Bank of China executives and high-level Chinese Communist Party and government officials. In another note Ms Liu refers to a planned private meeting with Joel Fitzgibbon to discuss “Family expenses support 20k.” The note also mentions Ms Liu’s intention to call on then NSW premier Bob Carr, stating: “visit Premier Bob C’s home”.

At that time, a NSW government department was a tenant in one of Ms Liu’s Sydney buildings. The note then refers to a visit to the home of a senior Bank of China executive, saying, “Give 50k cash as a gift” followed by a proposal to engage the man’s wife as a consultant. Mr Fitzgibbon was first embroiled in controversy in March last year when The Age revealed Defence Department officials had undertaken an unauthorised clandestine investigation of his 16-year relationship with Ms Liu. Mr Fitzgibbon then called Ms Liu a “close personal friend”.

Eric Fitzgibbon said at the time: “We might have had dinner a few times together, but there have been no big cheques in the mail or anything like that.”

The NSW Labor Party declared political donations by Ms Liu’s companies, including two donations totalling $40,000 to Joel Fitzgibbon’s 1996 and 1998 election campaigns.

The MP’s parliamentary declarations do not record any benefit from or financial relationship with Ms Liu other than his trips to China in 2002 and 2005, which were retrospectively added after the scandal erupted in March last year. Ms Liu’s papers include a letter to a close business associate in which she says Mr Fitzgibbon had boosted her business and political standing and that she was “willing to give him money”.

In a letter to the general manager of the Bank of China in Sydney, Ms Liu also noted that Mr Fitzgibbon was “very concerned” with legal action between herself and her former business partner, Humphrey Xu, and that the MP had given her “great help”.

The Age has had Chinese language documents included among Ms Liu’s correspondence translated by a nationally accredited translating firm. In April last year, former Labor leader Mark Latham, Mr Fitzgibbon’s former close friend, wrote in The Australian Financial Review that in regard to the relationship between Ms Liu and the Fitzgibbons he had “never encountered MPs so engaged, politically and financially, with a business benefactor” and “the full list of largesse received by the Fitzgibbon family is yet to be made public”.

Gillard’s office told of more ‘dealings’ Dorling, Philip; McKENZIE, NICK.

The Age [Melbourne, Vic] 03 Feb 2010: 2.

THE office of Deputy Prime Minister Julia Gillard was told early last year that an associate of Helen Liu had fresh information detailing the Chinese businesswoman’s relationship with Joel Fitzgibbon.

The claim that Mr Fitzgibbon may have had more extensive dealings with Ms Liu than he had acknowledged was passed on to Ms Gillard’s office around April by Labor-linked law firm Slater & Gordon, where Ms Gillard was once a partner. At the time, Slater & Gordon was acting for a past business associate who claimed to have intimate knowledge of Ms Liu’s affairs.

The information given to Slater & Gordon included a a photograph of Mr Fitzgibbon drinking beer on a flight to China. The government has twice refused freedom-of-information applications to release any correspondence relating to dealings between Ms Gillard’s office and Slater & Gordon on the Fitzgibbon issue.

However, Ms Gillard’s office has confirmed that it was contacted by Slater & Gordon on behalf of a client of the law firm but said the information it was given was vague and uncorroborated. “No specific allegation was made and no supporting documents were supplied,” Ms Gillard’s spokeswoman said.

“The Government made appropriate checks and, given the lack of specific allegations or supporting documents, determined that no further action was required.”

The businessman conveyed the information to Slater & Gordon via an intermediary, who later claimed that the law firm had advised that involvement in political controversy could jeopardise the businessman’s dealings in NSW.

The law firm has declined to discuss its dealings with the businessman.

Mr Fitzgibbon resigned as defence minister on June 4, immediately following a meeting with then cabinet secretary Senator John Faulkner and the Prime Minister’s chief of staff, Alister Jordan.

Mr Rudd said the sole reason for Mr Fitzgibbon’s resignation was a conflict of interest arising from the lobbying activities of his brother, NIB heath funds chief executive Mark Fitzgibbon.

Shortly after his resignation, Joel Fitzgibbon told a local newspaper that Mr Rudd had “made it clear that there is a pathway back to the cabinet”. The minister, the money and Ms Liu:

FOCUS Baker, Richard; Nick McKenzie With PHILIP DORLING.

The Age [Melbourne, Vic] 03 Feb 2010: It was a relationship cultivated to open the doors of power and influence.

Richard Baker and Nick McKenzie report on the Fitzgibbon connection.

LIKE many ambitious property developers, Helen Liu was not about to lie down when her bank began pursuing her over millions of dollars in outstanding loans in the mid 1990s.

In her armoury was a weapon also familiar to those in her line of work: friends in high places. For Liu, these friends ranged from officials in the Chinese consulate-general in Sydney to those in the parliament houses of NSW and Canberra.

So, as the the Bank of China stepped up its demands, Liu fired back some missives of her own. In a letter to a senior bank executive, Liu made mention of a friend in Australian politics whose star was on the rise. “Joel Fitzgibbon has become a federal (MP). If the Labor Party becomes the dominant party, he will become a cabinet member,” she wrote to the bank executive. Before asking the bank to be “more co-operative with us and not

make any trouble”, she offered an intriguing aside in reference to Fitzgibbon.

“The money we pay him is worthwhile.” Along with this letter, Liu also sought the help of the Chinese consulate in Sydney, which intervened on her behalf in the first half of 1998. Her interactions with the Chinese consulate also feature Fitzgibbon’s name.

A letter written by Liu to the Bank of China’s top Sydney executive in June 1998 outlines the consulate’s intervention and Fitzgibbon’s interest in her affairs.

“Thank you very much for the help you have given us over the time. Mr Zhang, vice counsellor general in Sydney, said he has good relationship with you and has mentioned to you about us.

I appreciate your special help in our loan repayment. Federal (MP) Joel Fitzgibbon is also very concerned about the legal case I am involved in at the moment and has provided me with great help,” she writes.

Whether the dropping of a politician’s name a tactic that is also not without precedent in the world of property development had any impact is unknown, although the bank and Liu did reconcile some of their differences.

When, around a decade later, Fitzgibbon’s dealings with Liu became a political scandal, both Fitzgibbon and his father, Eric, maintained their relationship with Liu was strictly about friendship and nothing else.

But the revelation of Liu’s personal letters sourced from a collection of her papers obtained by The Age shed light on a more complex relationship. At the very least, they suggest the businesswoman’s motive in her cultivation of Joel Fitzgibbon, as well as his father Eric, was about more than friendship.

The relationship between the Fitzgibbons and Liu became public in March last year, when The Age reported that Defence Department officials investigated his ties with the well-connected businesswoman out of fear it could compromise national security.

After initially denying having received significant gifts or benefits from Liu, Fitzgibbon put his ministerial career in jeopardy when he belatedly admitted he had failed to declare to parliament free trips to China from his friend in 2002 and 2005. It also emerged he was renting Liu’s Canberra property. He constantly denied having any further commercial dealings with Liu and studiously avoided answering questions about other members of his family, especially his father, and their potential ties to the businesswoman.

Throughout it all, Fitzgibbon and senior ministerial colleagues, were at pains to suggest he had simply been sloppy with his parliamentary bookkeeping. The consistent line from the government was that there was nothing sinister about his relationship with Liu, who in the recent past had been pictured with prominent Chinese political, economic and military figures.

A Defence Department inquiry also found no evidence to suggest that defence officials had spied on the minister, although Fitzgibbon later accused some within the bureaucracy of working against him. But it was his own habit of making inaccurate or incomplete disclosures that would lead to his ministerial demise.

Matters came to a head last June when it emerged he had given a public statement that contained misleading answers to questions about his brother’s lobbying activities in Canberra. In contrast to a previous denial, Fitzgibbon was forced to admit his brother, health insurance executive Mark Fitzgibbon, had used his ministerial office as a venue to lobby defence officials for contracts.

After a meeting with then cabinet secretary John Faulkner and Rudd’s chief of staff, Fitzgibbon tendered his resignation from cabinet and returned to the backbench.

The disclosures about his relationship with Liu had been destabilising but not fatal. It was the mix-up over the venue of his brother’s lobbying that cruelled him. Or was it?

Ever since Fitzgibbon’s resignation, some of his parliamentary colleagues and Labor advisers have whispered that there may be more to the story than just the issue of Mark Fitzgibbon’s lobbying. As reported in The Age today, the government was told in April last year by Labor-linked law firm Slater and Gordon that one of its clients, an associate of Liu’s, was claiming that Fitzgibbon was not giving a full account of his dealings with her.

Among information given to Slater and Gordon was a photograph of a smiling Fitzgibbon drinking beer on a first-class flight to China. Some of this information was passed to the office of Deputy Prime Minister Julia Gillard, although Gillard’s office says the information received was not specific.

Preliminary checks were made, but there was not enough for the government to take any further action, Gillard’s spokeswoman said. But government sources have suggested that there may have been questions Fitzgibbon could not or would not answer regarding his family’s financial relationship.

Earlier this week, Fitzgibbon dismissed such claims, repeating his assertion that he has disclosed everything about his relationship with Liu that he is required to disclose. Liu’s personal papers indicate that, at least from her perspective, the story may not have been fully told.

Liu first met Joel Fitzgibbon when he had travelled to China in 1993. On this trip, Fitzgibbon had yet to enter Parliament and he was trailing along with Liu’s primary guest, his father Eric, for whom he worked as an electorate officer and whose federal ALP seat he would take three years later in 1996.

The trip was funded by Liu and her then boyfriend and business partner, Humphrey Xu. At this time, Liu and Xu were amassing a Sydney property portfolio that, in 1998, would be worth $60 million.

The pair were also seeking friends in politics in Australia, an aim that may have dovetailed with the growing friendship with the Fitzgibbons.

Donation records from the 1996 election campaign lodged by the NSW ALP branch at the time show that as the younger Fitzgibbon moved to succeed his retiring father, his campaign was given a $20,000 injection by one of Liu’s companies.

Among Liu’s papers that document her dealings with the Bank of China are other documents that suggest the existence of other financial dealings with the Fitzgibbons. In one note from Liu’s file, she documents a meeting with Fitzgibbon.

“Meet Joel in private. Family expenses support. 20 k.” It is unclear exactly what this note refers to and, earlier this week, Joel Fitzgibbon also professed to have no knowledge of what it could mean.

Fitzgibbon’s name also appears on a list of 22 names in which Liu appears to record whom she had paid. The list includes large payments to Bank of China executives and senior Communist Party figures, some of whom are now serving jail sentences in China for corruption. Her documents also record the establishment of a joint venture company with Fitzgibbon’s family, with his father Eric as the representative agent, a claim that contrasts with the pair’s previous denials of any commercial relationship with Liu.

Presented with the claims this week, Joel Fitzgibbon maintained that no such relationship ever existed between himself and Liu. Indeed, Fitzgibbon told The Age he was unable to shed light on the meaning of some of the claims in Liu’s personal papers, although he was adamant that he never did any improper favours for Liu and had nothing to hide.

However, his father, Eric Fitzgibbon, this week revealed the existence of a previously unknown role he undertook for Liu after he was replaced in Parliament by his son. He claimed no joint venture ever existed, but said:

“They where building a hotel, a major development in a part of China. They asked me if I would like to give them a hand for the selling of the units.” Eric Fitzgibbon told The Age he sold apartments on behalf of Liu. “I appreciated the opportunity. I can’t remember how many units I sold.”

When asked whether he got any payments for this work, Eric Fitzgibbon said his only benefits were travel expenses, including trips to China and a trip to London, and some lunches. He said he was also paid around $3000 to look after the Liu family’s dogs.

Eric Fitzgibbon also suggested that some of the statements in Liu’s papers were a case of a businesswoman big-noting her connections, a view seemingly shared by others.

In one of the documents among her personal papers, a senior Chinese company official writes to Liu to apparently express the view that her political manoeuvring in Australia counted for little in China. “We are the Shandong Branch of the Industrial and Commercial Bank of China. We do not express any opinion regarding the position you take in Australian political parties. Please seek advice from appropriate lawyers on whether your donation to the ALP complies with the laws of Australia,” the bank executive wrote in 1996.

While Liu’s papers suggest that it was her intention to use her connection to Fitzgibbon the politician, rather than Fitzgibbon the friend, to influence her commercial and political dealings, they contain no evidence that Joel Fitzgibbon ever approved such an arrangement.

But suspicions about the 16-year-long ties between the Australian politician and his businesswoman friend are likely to be fuelled by today’s revelations. Among the key questions that may arise is “who was using who?”

Richard Baker and Nick McKenzie are with The Age investigative unit