You would think it was big news that Opposition Leader Peter Dutton had presided over billions of dollars in government contracts to allegedly crooked companies and ignored all warnings about them for years. Not so, according to News Corp publications, with The Australian barely reporting on the latest damning revelations — and even then only to seemingly excuse Dutton. Even the ABC only managed a single desultory online write-through of the story.
It emerged via the Nine newspapers on Sunday that an inquiry into the Dutton-era Home Affairs department, conducted by former director-general of the Australian Security Intelligence Organisation (ASIO) and Defence secretary Dennis Richardson, blamed senior public servants for years of failures that could have prevented taxpayers from paying billions to companies linked to alleged serious crimes.
The Richardson inquiry was followed up by Labor Senator Deborah O’Neill in estimates on Monday, but nor was this reported by News Corp organs: they will decide, apparently, what is news in this country and the circumstances in which it is reported. And if a story originates in the organisation formerly known as Fairfax, it’s not news.
This week revealed new details about how Home Affairs under Dutton entered into contracts with multiple companies that were under investigation by the Australian Federal Police. His department contracted a company whose CEO was being investigated for possible drugs and arms smuggling.
Richardson also found that the department’s internal audit, conducted in 2019 and reporting to minister Dutton, picked up that the government had subcontracted KPMG to look into a major tenderer, but that KPMG had conducted its audit on the wrong company. That is, instead of conducting a financial strength assessment on the company that the department had actually contracted (Paladin Holdings), it audited a completely different company (Paladin Solutions). The department had no financial statements of the company to which it would contract half a billion dollars worth of services. We learnt this week that Dutton had “noted” these auditing and procurement failures at the time, but did nothing to address them.
The audit also found that the department had never outlined its reasons for selecting Paladin (after a non-competitive tender process) in the first place. At the time, Dutton refused to release details of the contracts, but they certainly looked ugly from the outside: in 2017 the Australian arm of Paladin was registered to a beach shack on Kangaroo Island and had just $50,000 in capital. The company had prepared its bid in less than a week, and the contract it bid for was far more lucrative than anything it had undertaken before.
Soon after winning the contract, Paladin’s founder and major shareholder Craig Thrupp was being denied entry into Papua New Guinea over disputes about the company’s local subcontracting practices. (While Paladin received government funding of around $1,400 per asylum seeker per day, security guards were being paid just $450 per month. The company was making $1.3 million profit per week, according to documents later filed in bitter legal disputes between Paladin and its former executives. Thrupp denies any wrongdoing.) Paladin has also been under investigation by the AFP over bribery allegations involving PNG officials.
Documents released to the Senate in September 2019 reveal that Paladin breached its key performance indicators thousands of times during the first year of its operations. Yet the government renewed its contract several times.
Nor is this the only entity under the spotlight over corruption and other probity allegations. “Richardson confirmed that former Home Affairs contractor Canstruct, which managed a $1.8 billion rolling contract on Nauru between 2017 and late 2022, faces a separate federal police financial crime and bribery probe,” reported Nine’s investigative team this week. When it was originally awarded a contract to run Australia’s offshore processing in Nauru, the Brisbane construction company had not even commenced trading, and had just $8 in assets. Soon it was making $100 million in annual profits from its Home Affairs contracts.
In a strange coincidence, this was another case of KPMG conducting its financial strength assessment on the wrong company: Canstruct International Pty Ltd, rather than Canstruct Pty Ltd. (This may sound like an innocent or insignificant error, but according to Guardian Australia, the minister for Home Affairs confirmed that “its contract provided no recourse to Canstruct Pty Ltd should Canstruct International fail to meet its obligations under the contract”.)
Questions were raised by the Australian National Audit Office in relation to yet another Home Affairs contract too, with NKW Holdings, because they were “not representing value for money”.
Dutton presided over Home Affairs from 2017 to 2021, and in 2022 the Nauru offshore processing contracts that his department had initiated (under former secretary Mike Pezzullo) alone cost the Australian taxpayer $485 million, despite there being just 22 refugees and asylum seekers left there.
But is any of this really important? The fact that no bureaucrats, or the current Liberal Party leader, ever suffered any consequences for their failures, despite a litany of them over years, costing billions and prompting multiple corruption investigations? It’s apparently of little significance to either News Corp or the ABC that the alternative leader of the country is neck-deep in it.
The current secretary of Home Affairs, Stephanie Foster, appearing in estimates on Monday, replied to Senator O’Neill’s pointed queries only by saying that the internal audit report stood for itself. And while noting that “the processes were not adequate” and that the department had “learned from the past”, she nevertheless said that bureaucrats in the department wouldn’t face consequences as a result of these failures. Nor, it seems, will Dutton.
What are you thoughts on the Home Affairs saga? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.
