http://www.aph.gov.au/House/committee/e ... twelve.pdf
Unit 5/108 Days Road
11th July 2001
Ms Bev Forbes
Joint Standing Committee on Electoral Matters
Canberra ACT 2600
Dear Ms Forbes
Submission to the Electoral Funding and Disclosure Inquiry
I refer to your advertisement inviting submissions to the Inquiry into the Electoral
Funding of Political Parties, with a closing date of 3rd August 2001.
This submission outlines information relating to allegations of major impropriety
involving electoral funding and disclosure. The key allegation is that in 1987 a US$6
million donation was made to the Labor Party by a company controlled by the CIA.
The donation allegedly was in return for the use of Australian soil to illegally transfer
arms from the US to Iran as part of what became known as the ‘Iran-Contra Affair’.
I believe that there is adequate evidence to warrant close scrutiny of whether this
donation was made and what the circumstances surrounding it were. If such a large
foreign donation can be made for allegedly corrupt purposes and remain undisclosed
and undetected, then this exposes a major defect in Australia’s political donations
disclosure laws and their enforcement.
In short, the Australian Government at that time is alleged to have assisted the US
Government in actions that were found to be illegal in the USA, and a payoff for that
assistance allegedly went to the political party that then formed government. If the
donation was an inducement or a reward for the Government’s complicity in illegal
arms trading, then serious questions arise as to the adequacy of the auditing regime
governing political donations.
These allegations originated from claims made by Ari Ben-Menashe. Ben-Menashe is
a former Israeli military intelligence officer. I have flown to Canada to interview Mr
Ben-Menashe on behalf of my newspaper and have several tapes recording his
allegations. He remains available to discuss his experiences. In his book Profits of
War (see Appendices), he claims:
“In February 1987 a “contribution” was made to the West Australian Labor Party by
our US counterparts in the CIA. In gratitude for the use of Australian soil for the
transfer of arms to Iran, Richard Babayan, a contract operative for the CIA, received a
cheque for $6 million US from Earl Brian, who was acting on behalf of Hadron1, a
CIA “cut-out”. Babayan travelled to Perth and stayed at the home of Yosef Goldberg,
an Australian businessman of Israeli origin who was well connected to Israeli
intelligence and to the local Labor Party headed by Brian Burke, then premier of
Western Australia. Babayan handed the cheque to Goldberg, who in turn gave it to
Alan Bond in his role as the guardian of the John Curtin Foundation funds. This
money was passed on by one of Robert Maxwell’s companies in Australia to be held
by the Pergamon Press Trust Fund in Moscow. Babayan later corroborated the details
of this operation in a sworn affidavit.”
The publishers of Ben-Menashe’s book have confirmed that they hold an affidavit
from Babyan supporting Ben-Menashe’s account of his role in the making of the
In my taped interview with Ben-Menashe he elaborates on the detail of these events.
He is adamant that senior members of the ALP at that time knew about this payment.
He claims that Prime Minister Hawke was aware of it, but was at pains to say that
Treasurer Keating did not. No mention was made about whether or not the Minister
for Defence, Mr Beazley, knew of the payment.
Ben-Menashe also suggests that a bribe was involved.
It is a fact that arms were transferred through concealed routes from the USA to Iran.
As a close ally of the USA, it is quite plausible that Australia was part of one of those
routes. Ben-Menashe claims that payoffs and bribes were a routine part of these
illegal arms deals throughout the world, and in that respect there was nothing unique
about the payment to the Labor Party.
US$ 6 million from the CIA to the ALP
• Hadron Inc is a US company with ties to the CIA.
• Hadron Inc’s Earl Brian gives $6 million cheque to Richard Babayan, a
contract operative for the CIA.
• Babayan gives cheque to Yosef Goldberg, an Australian businessman of
Israeli origin well connected to Israeli intelligence and the ALP.
• Goldberg gives cheque to Alan Bond in his capacity as guardian of the ALP’s
John Curtin Foundation fund-raising entity.
1 Hadron Inc. is a US company