The proposed deal has shocked electoral law experts George Williams and Graeme Orr, who described the document as "as blatant as it gets". "I don't think there was a formal agreement signed by both sides": Roostam Sadri. The two-part agreement, which was was drawn up in April, could contravene two anti-bribery provisions in the Commonwealth Electoral Act, according to Professor Orr, who wrote the 2010 book The Law of Politics: Elections, Parties and Money in Australia and did his PHD on electoral crime and bribery. Mr Sadri confirmed he had recently donated to the Liberal Democrats and was willing to spend another "$100,000, $200,000 or more" on his campaign in South Australia but insisted the leaked agreement, which appears to have his "RS" initials marked on it, was never signed and he has not handed over $500,000. "I don't think there was a formal agreement signed by both sides. We had negotiations. I wanted a Senate seat," he said.

"But there's no such thing as a purchase contract, I don't think it's legal to do that. Maybe it is, maybe not." "I made some donations but it wasn't $500,000. In the past I have also donated to Labor and the Liberal Party. I have been invited to lunches with John Howard, Paul Keating and Bob Hawke and they were all fundraisers." In a statement, a Liberal Democrat spokesman said: "The Liberal Democrats are proud to announce Roostam Sadri as their No.1 Senate candidate for South Australia. "Mr Sadri approached the Liberal Democrats offering his experience, expertise and a willingness to inject funds into the campaign. Mr Sadri's initial offer of funds got our party interested, but after confirming Mr Sadri's excellent credentials to serve as a Liberal Democrats' senator in South Australia, and after his immersion into the party, the party has preselected Mr Sadri, based on his merits. "Consistent with the party's record and support for financial disclosure, all disclosure obligations will be fully satisfied. The Liberal Democrats oppose taxpayer funding of political parties.

Professor Orr said an offence of bribery does not necessarily hinge on an agreement being signed and said most deals in politics, like the infamous "Kirribilli agreement" between Bob Hawke and Paul Keating over the leadership of the Labor Party were done on a handshake. "On its face, there may be two 'electoral bribery' offences," he said. "There doesn't need to be a finalised agreement. Section 326 of the Electoral Act lays out offences in relation to the offering or acceptance of any property or benefit for certain outcomes that include "the order in which the names of candidates . . . appear on a ballot paper". Professor Williams said: "It seems extraordinary to me. It's the sort of thing that should not be happening in our democracy and if it's not proscribed by law, it should be. "We already have a big problem with political donations. If people can actually buy their way into preselection and to the ticket then that's an even bigger problem."

Mr Sadri, a leader of the Tatar community - an ethnic minority of Russia - who arrived in Australia from China as a refugee in 1976, said he had "read the agreement" but insisted he or his lawyer had not drafted it. "I was not involved in drafting it. Whoever drafted it might have leaked it," he said. The Primary Agreement, which is marked with Mr Sadri's initials, states: "Mr Sadri will deposit AUD 500,000 in the Liberal Democrats' account [St George Bank details] such that the funds arrive in the account no later than five days from the issuing of the writs for the next Senate election, whether a double dissolution election or otherwise." It goes on to outline that Mr Sadri will then become a financial member of the micro party and fill out a Senate nomination form within five days. If the $500,000 was paid within seven days of the election writs being issued, the Primary Agreement states, the registered officer of the Liberal Democrats would endorse Mr Sadri's position "at the top of the Liberal Democrats' column on the [state to be specified] Senate ballot paper".

Fairfax Media understands that members of the Liberal Democrats' federal executive originally proposed Mr Sadri stand in Victoria, where he owns property, before settling on his home state of South Australia. The Secondary Agreement makes clear that the party would control the $500,000. "The Liberal Democrats reserve the right to allocate funds in its account at its sole discretion," the Agreements states "The Liberal Democrats will not discriminate in its commitment of electoral expenditure in [the state in which Mr Sadri is nominated], solely on the basis of Mr Sadri's candidacy in [that State]." The party agreed to advise Mr Sadri of its expenditure each fortnight after the Agreements took effect.

On Friday, Mr Sadri said he had thought about starting his own "multicultural party" but decided his political philosophy fit with the libertarian party of Senator Leyonhjelm. "There's too much bureaucratic red tape and I thought maybe it's time to get influence in decision-making," he said. Mr Sadri said he arrived in Adelaide with $US500 in his pocket and three days later was assembling gearboxes for General Motors. He went on to buy out the South Australian Meat Corporation, the country's second-largest abattoir at the time, from the SA state government in the 1990s. He made a profit but the slaughterhouse, just 10 kilometres from the Adelaide CBD, closed within four years. Mr Sadri is not the only businessman standing for the Liberal Democrats.

Self-storage magnate Sam Kennard, who contested the North Sydney byelection, will be No.2 on the NSW ballot behind Senator Leyonhjelm. This week, Senator Leyonhjelm blamed a Liberal Party "spy" in the Liberal Democrat federal executive for leaking damaging documents to the media. Follow us on Twitter

