Department of Finance executives "encouraged" and even directed a contractor to engage in conduct that has resulted in him facing a criminal charge, the man's counsel claims.
Barrister Mary Keaney made the "aiding and abetting" allegation in the ACT Supreme Court on Thursday, when she applied for Justice Belinda Baker to quash the indictment of her client or grant a permanent stay.
Ms Keaney's client, a Canberra man in his 50s, is due to face trial after pleading not guilty to a charge of conspiracy to defraud the Commonwealth. His identity is the subject of an interim non-publication order.
He is accused of conspiring with two other men to defraud the department by corrupting its information technology procurement processes so they favoured candidates put forward by two specific companies.
These businesses, which were owned by the accused man and one of his alleged co-conspirators, are said to have received financial benefits as a result.
The court heard on Thursday that during the relevant period, between March 2019 and June 2020, the accused was engaged by the department as a "technical delivery director".
Ms Keaney said the man's job involved "head-hunting" people on behalf of departmental executives, who needed them to work on a major federal government project.
"He was effectively given carte blanche to get the people he needed," she told the court.
The barrister claimed the department was already home to "a culture of non-compliance with procurement protocols", which was "effectively imposed on" her client by the executives.
The "culture", she told the court, included the IT "industry norm" of people subcontracting to their own labour hire firms.
Ms Keaney described this supposed culture as "the mischief in this matter" while arguing the accused had only contributed to it to the extent he had complied with directives given to him by executives.
The defence barrister told the court prosecutors would therefore not be able to prove her client had been dishonest because the department had, in her submission, "aided and abetted" the conduct the man was now charged over.
She added that the accused was "encouraged and supported" by executives to recruit the right people for the "high-profile" project, notwithstanding the conflict created by him doing so through his own firm.
Ms Keaney submitted that the department's executives constituted "the Commonwealth" by virtue of their positions, meaning her client could not have been conspiring to defraud the federal government.
The barrister also claimed "exculpatory" evidence had not been disclosed by authorities until her client's legal team obtained a large number of intercepted phone communications by issuing subpoenas.
Prosecutor Scott Young told the court the department was aware the accused was the head of a labour hire firm, and that the company would benefit whenever a candidate it put forward for recruitment was selected.
For that reason, he said, the accused was not to be part of selection processes involving candidates nominated by his company.
But Mr Young said the accused and the other business owner received information about the processes from the third alleged co-conspirator, a department employee who "influenced" selection panels to benefit their firms.
The prosecutor also said a particular executive, described repeatedly by Ms Keaney as someone who had "aided and abetted" her client's conduct, had denied knowing of wrongdoing by the alleged co-conspirators.
Mr Young addressed the defence claims about disclosure of phone intercepts by saying prosecutors had not refused any requests to turn these over, meaning "no incurable prejudice" had arisen.
He also rejected Ms Keaney's claim that continuing the prosecution of her client would "bring the administration of justice into disrepute".
Justice Baker has reserved her decision on Ms Keaney's application.
