NACC must deliver quickly

This article is part three in a series. For the full series, go here.

The home affairs contracts for Manus Island’s garrison and security services between 2017 and 2019 were hugely profitable for the Paladin Group. It made well over a million dollars in profit per week.

“Internal company records show that Paladin Group founder and majority shareholder Craig Thrupp is estimated to have personally earned more than $150 million after the company won domestic contracts within four years that were ultimately worth more than $500 million,” reported Nine media (meanwhile, for what it’s worth, workers on the ground in PNG were paid $1.50 an hour).

Department records also show that from the start of his contract, Paladin made financial arrangements with companies closely linked to PNG officials, which a former Paladin executive said amounted to bribes.

Former Paladin director and whistleblower Ian Stewart told Nine Media that he reported attempted bribery to the Home Office shortly after Paladin won the contract. He said a Home Office official then pressured Paladin to use a subcontractor known to be a front for corrupt PNG officials. Stewart further alleged that Internal Affairs urged Paladin executives to raise their concerns only through phone calls to avoid being put on the record. (The ANAO later confirmed that Paladin had made such reports, but not the details.)

In January 2018, Paladin struck a deal with local subcontractor Peren Investment, a company controlled by the brothers of a senior PNG MP and key ally of then Prime Minister Peter O’Neill. The dollar value of this scheme has never been revealed.

On another occasion, Stewart alleged that Paladin had made payments of more than $3 million into a Singapore account of a businessman with close ties to senior PNG officials. (Stewart wasn’t the only ex-director to claim Paladin made “ex-gratia payments,” either.)

However, nothing happened in relation to these reports, and Home Affairs Minister Mike Pezzullo told a parliamentary committee in April 2019: “We are not aware of… any demonstrable case of probable, possible or reasonably suspected corruption”.

The contract between Interior and Paladin states that “the service provider may not enter into any major subcontract without the prior written approval of the Department,” with a major subcontract defined as having a total value of more than $250,000. So if the Home Office did its job properly, it must have been aware of these payments and these allegations. (Its own 2019 audit acknowledged it could not account for the services Paladin outsourced because the department could not provide supporting documentation.) Home Affairs should certainly have been more careful with Australian taxpayers’ money.

If this alleged corruption is true, the only possible conclusions are that Home Affairs either turned a blind eye to it or actively encouraged it. Or both.

Nevertheless, the same internal audit found, to the contrary, that Home Affairs’ procurement, procurement and subsequent contract management had “overall” achieved “value for money”, promoted competition and retained sufficient and appropriate evidence to ensure compliance of the contract management policy. , procedures and frameworks”, but this is of course absurd. Contractor Paladin made more than a million dollars a week in profits from contracts won through a closed tender. Home Affairs denied even being aware of any alleged corruption, let alone showing any signs of being investigated. Apparently these matters were not passed on to the AFP or DFAT either.

Also, no one from the Home Office appears to have told fellow government agencies that Craig Thrupp, founder and owner of Paladin, was himself removed from the Home Office and Manus contract in May 2018 after Paladin admitted failing to comply with a Home Office direction had kept. Or that in February 2019, Thrupp’s visa to PNG was revoked “because the company did not adhere to the government’s position on the recruitment of local workers”. Crikey does not allege that Thrupp acted improperly at any time, or was aware of any alleged attempts at corruption. He has denied any wrongdoing and awareness of any alleged or attempted corruption.

Nevertheless, Paladin’s contracts continued until November 2019. Black Swan, a PNG security company acquired by Paladin in early 2019, continued to win major Australian government contracts – from the AFP and DFAT, no less – that ran until 2024. Paladin is no longer in business . .

According to a recent report in Nine Media, the AFP has “launched an investigation into suspected corruption involving Australian companies and senior PNG officials”.

Federal police are also “investigating Paladin for dishonestly obtaining millions of dollars from Australian taxpayers through Home Affairs’ offshore detention budget to fund suspected bribery.” No one has been charged yet and there is no indication that Home Affairs itself is being investigated.

It’s hard to know what to make of the stunning failures in the Home Office-supervised process regarding the Paladin contracts. One thing seems obvious, though: given the complexity and scale of the problems, and the taxpayers’ money, this is exactly the kind of issue the NACC should be properly investigating. But will it?

So far, the NACC has given its name to the one report – a joint investigation by ACLEI and Interior itself – that covers a small corner of the Paladin story. No corrupt behavior was found in Operation Bannister. Frankly, it seems unreasonable for the NACC to leave it there, even to those involved in that investigation – who as a result have become the sole focus.

The NACC will neither confirm nor deny whether it will “investigate or report on other Paladin-related matters,” as it “generally will not comment on whether or not it is investigating a matter.”

Given that Operation Bannister was “an Australian Law Enforcement Integrity Commission corruption investigation” and “a joint investigation with the Department of Home Affairs,” we asked the NACC: what were the investigative tasks performed alternately by ACLEI and Home Affairs? And how were these research tasks divided? Has the NACC itself conducted additional research?

The Commission responded that it “would not provide details of the investigations carried out other than what is contained in its report”. We contacted Home Affairs, but they referred our questions about the investigation back to the NACC. And the ACLEI? It no longer exists as an entity.

If Operation Bannister is an example of how the NACC will operate, the public should prepare for disappointment. In this particular case, the NACC made a judgment after a limited investigation, but failed to create a sense of broader accountability or transparency. Rather, it has become a black hole for any further questions or concerns we have about the Paladin affair, past, present, or future. And not just this affair. The NACC has become the place where all corruption investigations disappear. To date, despite thousands of referrals, the NACC has made no significant findings on corruption.

Former Manus Island prisoner Behrouz Boochani has captured what is at stake Guardianwrites: “The bigger picture has yet to be uncovered… What needs to be investigated is not just the financial agreements with companies and the way taxpayers’ money is spent, but also the many clear human rights violations.”

These are not theoretical or abstract concerns. And they go much further than Home Affairs contracts. They go to the heart of governance and political responsibility in Australia.

In the interest of the nation, the NACC must seriously and quickly ramp up its performance – or risk permanently destroying its reputation.