Adjournment: Espionage and Foreign Interference

4 December 2018

In June, the parliament passed two major pieces of legislation, the National Security Legislation Amendment (Espionage and Foreign Interference) Act and the Foreign Influence Transparency Scheme Act. The espionage and foreign interference legislation came into immediate effect and the Foreign Influence Transparency Scheme will, somewhat belatedly, come into operation around 10 December.

The transparency scheme will introduce registration obligations for persons and entities who, on behalf the foreign principals, engage in parliamentary and general political lobbying, communications activities and disbursement activities for the purposes of political or governmental influence. Criminal penalties will apply for noncompliance.

The legislation was largely prompted by media revelations of largely secret relationships between Australian political figures and foreign and foreign-connected political donors. The most prominent of these cases involved former Labor senator Sam Dastyari dealing with prominent Chinese political donors and his advocacy for the Chinese government's position on the South China Sea. Prior to his exposure and political demise, Senator Dastyari undoubtedly anticipated that he would become a senior minister in a future Labor government. Senator Dastyari's actions were highly questionable, and his departure from the parliament was appropriate.

Another long-running controversy arose from the relationship between the member for Hunter, Joel Fitzgibbon, and Chinese-Australian property developer Helen Liu. Reporting by Fairfax Media revealed Ms Liu to be a generous donor to Mr Fitzgibbon's election campaigns and the New South Wales Labor Party. In 2009 Fairfax reported that Defence security officials suspected Ms Liu was associated with Chinese military intelligence. The revelation of Ms Liu's close links with Mr Fitzgibbon and a failure to declare two trips to China paid for by Ms Liu precipitated the controversy that preceded his resignation as the Minister for Defence in 2009.

Following further Fairfax reports concerning alleged payments by Ms Liu to Mr Fitzgibbon, the member for Hunter pursued a defamation claim that was eventually settled by Fairfax for commercial reasons. Ms Liu also pursued a defamation claim against Fairfax and spent years pursuing the sources that gave information to Fairfax journalists about her alleged payments to Mr Fitzgibbon, as well as to Chinese government and Bank of China officials.

In June last year, Fairfax confirmed that Ms Liu had close business and personal ties with senior Chinese military intelligence operatives. One of Ms Liu's Australian companies, Wincopy, transferred over $250,000 to a Hong Kong company that US officials identified as a front for Chinese espionage and interference in the 1996 US presidential election campaign, what was later called the 'Chinagate' scandals. The Hong Kong company was owned by Liu Chao-ying, a well-connected Lieutenant Colonel in the Chinese military intelligence and vice president of a Chinese government company responsible for acquiring foreign missiles and satellite technology.

Helen Liu's company, Wincopy, donated to Mr Fitzgibbon's 1998 election campaign. When Fairfax reported these revelations last year, Ms Liu denied any involvement with Chinese intelligence. However, she also very promptly dropped her defamation case against Fairfax. Mr Fitzgibbon denied any knowledge of Ms Liu's connections with the military intelligence officer Liu Chao-ying. In answer to questions from journalist Chris Uhlmann, Mr Fitzgibbon made the following comments: 'I did not participate in any meetings or discussions with Chinese military officials during my visit to China. I have never written to a Chinese official. Suggestions that I've been involved in any of Helen Liu's business interests or benefited in any way from them are farcical and lack any credibility whatsoever.'

Mr Fitzgibbon's statement that he had never written to a Chinese official is at odds with information contained in an affidavit sworn by him and lodged in the ACT Supreme Court in his defamation action against Fairfax. In that affidavit Mr Fitzgibbon listed a series of letters he wrote to Chinese officials between 1996 and 2005. It lists a letter he wrote in 1999 to Shandong's Communist Party chief, Wu Guanzheng. Shandong is Ms Liu's home province and location of many of her business activities in China. Mr Wu was made a full member of the Politburo of the Communist Party of China in 1999, and in 2002 he was appointed as head of Chinese Central Commission for Discipline Inspection, the Communist Party's anticorruption agency, a position he held until 2007. The affidavit also recorded that in 2005 Mr Fitzgibbon wrote to Zhou Wenching, a vice-governor in Shandong Province. Again in 2005, Mr Fitzgibbon wrote to Zhao Kezhi, another vice-governor of Shandong Province. Mr Fitzgibbon later dined with Mr Zhao at a restaurant in his electorate of Hunter. Mr Zhao is now the Chinese Communist Party's secretary of Hebei Province. In 2006 Mr Fitzgibbon also wrote to Liu Wei, apparently another senior official within the Communist Party in Shandong. Mr Fitzgibbon's affidavit also recorded that in 1997 he wrote to the immigration section of the Australian embassy in Beijing in relation to Ms Liu, her family or businesses. In 2000, he wrote a character reference for Jie Liu, who is believed to be Helen Liu's nephew. The 2011 affidavit has not actually been made available publicly.

It may be that all this correspondence was entirely innocuous; however, it suggests that Mr Fitzgibbon's involvement with Ms Liu's businesses and other activities may have been more extensive than his denials last June indicated. He certainly did write to Chinese officials. Mr Fitzgibbon's longstanding relationship with Helen Liu and her sister, Queena, included using a Canberra apartment leased by the sisters while defence minister. That, of course, may have been entirely innocent and unremarkable. However, serious issues about this case remain unresolved. These issues include the full extent of Ms Liu's dealings with Chinese intelligence officer Liu Chaoying, Mr Fitzgibbon's denial of correspondence with Chinese officials, and whether Mr Fitzgibbon undertook activities on behalf of Ms Liu in Australia or in relation to her business interests in China. There is also the question of whether Mr Fitzgibbon's family, including his late father, Eric, received any benefits from Ms Liu or other persons that were outside the member for Hunter's obligation to declare as a member of parliament

Mr Fitzgibbon presumably expects to serve as a senior minister in the Labor Party if it wins the next election. However, he should not serve in any ministerial office until there has been a full investigation of the security issues, including his vulnerability to compromise, arising from his past ties with Ms Liu. Ministers occupy positions of the highest trust within the Australian government. Cabinet ministers are privy to the most sensitive decisions and the highest levels of security classified information. Curiously, under the current Australian Protective Security Policy Framework, ministers are exempt from security checking and clearance processes that apply to all other Australian government personnel who have access to sensitive classified information. Ministers, it appears, are taken on trust. In contrast, the government of Canada conducts security background checks in relation to federal ministers. It's clearly highly anomalous that Australian ministers should be exempt from security background checks.

Regrettably, it cannot be assumed that persons appointed as ministers will always be free of characteristics, activities, associations, connections or obligations that may compromise or risk compromise of national security. With this in mind, I intend to introduce a private member's bill to establish a mandatory security background checking process for all ministers. This would address a significant gap in Australia's protective security framework. Security at the highest levels of the Australian government should never be compromised.

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