The Loans affair, also called the Khemlani affair, was a political scandal involving the Whitlam government of Australia in 1975 in which it was accused of attempting to borrow money from the Middle East by the agency of the Pakistani banker Tirath Khemlani (17 September 1920 — 19 May 1991) and thus bypass the standard procedures of the Australian Treasury and violate the Australian Constitution. Minerals and Energy Minister Rex Connor and Treasurer and Deputy Prime Minister Jim Cairns misled Parliament and were forced from the Whitlam Cabinet over the affair. This was a key precursor to the 1975 Australian constitutional crisis, which led to the dismissal of the government in 1975. Background Minerals and Energy Minister Rex Connor wanted funds for a series of national development projects. He proposed that to finance his plans, the government should borrow US$4 billion (equivalent to US$ billion in ). It was a requirement of the Australian Constitution for non-temporary government borrowings to be through the Loan Council. Although the development projects were long-term, Whitlam, Cairns, Murphy and Connor authorised Connor to seek the loan on 13 December 1974 without involving the Loan Council. Connor had already been investigating the loan. Through an Adelaide builder, he had been introduced to the Pakistani dealer Tirath Khemlani. According to Khemlani, Connor asked for a 20-year loan with interest at 7.7% and set a commission to Khemlani of 2.5%. Despite assurance that all was in order, Khemlani began to stall on the loan, notably after he was asked to go to Zurich with officials of the Reserve Bank of Australia to prove that the funds were in the Union Bank of Switzerland, as he had claimed. The government revised its authority to Connor to $2 billion. Khemlani played a pivotal role and was employed by Dalamal and Sons, a London-based commodity-trading firm. It was common knowledge that funds were usually borrowed from European banks or financiers. Connor's attempt to secure the loan was unusual for several reasons: The size of the loan was extremely large for the time. When a project of such a scale and cost is undertaken, governments often attract foreign investment and ultimately form a business partnership whereby the foreign investor retains partial ownership and/or rights over the resources once the project is complete. However, that option was rejected by Connor, who was renowned for his desire to have Australian resources controlled and