Sovereign Borders wasted and mismanaged millions, claims senior official

A high-ranking Australian official has voiced grave moral and integrity concerns about the waste and mismanagement of millions of taxpayer dollars as part of Australia’s controversial offshore detention regime.

Home Affairs assistant secretary Derek Elias’ claims that taxpayer funds may have been spent on services that were never delivered and on questionable tasks – such as training the Nauruan president’s guard dog and $6 million for golf umbrellas – have emerged with the Albanese government yet to release what is expected to be a damning report on offshore processing by former spy chief Dennis Richardson.

In sworn evidence, Elias also claimed the military general previously in charge of the contentious Operation Sovereign Borders privately told him that aspects of the offshore processing regime were “broken” and overseeing it was the worst job of his lengthy career.

The allegations emerged in a bitterly contested tribunal hearing dealing with Elias’ claim for workers’ compensation and provide a rare, albeit disputed, insider’s account of Home Affairs’ management of one of the most controversial policies in recent political history.

Elias oversaw Australia’s multibillion-dollar offshore processing procurement system in 2020 and 2021. In his previously unreported sworn evidence, Elias has become the most senior departmental official to detail serious concerns about Australia’s Pacific Solution regime, which has been dogged by allegations of human rights breaches, corruption and mismanagement, and which still operates under the Albanese government.

In his Administrative Appeals Tribunal evidence, Elias alleged that the now former Sovereign Borders chief, Major-General Craig Furini, privately told him that he loathed his role running the operation and that it was worse than going to war in Afghanistan.

Home Affairs assistant secretary Derek Elias raised concerns with the Administrative Appeals Tribunal that taxpayer funds were wasted on Australia’s offshore detention regime.Credit: Fairfax Media

Elias claimed in the tribunal hearing that in one conversation, Furini “was screaming on the phone … that the [management of offshore processing] contracts was the worst f---ing job he had ever encountered in his life”, and was even more difficult than having deployed to Afghanistan where his soldiers “f---ing killed people”.

“That alarmed me in the sense that it showed my supervisor, to me at least, in my perception, was incredibly worried about something in the procurement space,” Elias told the tribunal.

Elias also alleged during the hearing that Furini was a bully who, on another occasion, phoned him “screaming that he wanted to rip some motherf---ing c---’s head off when referring to another” senior Home Affairs official involved in offshore processing.

Home Affairs has hit back at Elias’ claims that it wasted millions of dollars on services that were never delivered or which should never have been performed. In the Administrative Appeals Tribunal, the department’s lawyer accused the senior public servant of giving dishonest or misleading evidence to bolster his compensation claim.

Major-General Craig Furini at the 2018 press conference announcing his appointment as the commander of Operation Sovereign Borders.Credit: Alex Ellinghausen

Furini, who commanded Sovereign Borders between 2018 and late 2020, has also denied the claims about his workplace conduct made by Elias, including the allegation that he was a bully, and stressed he was not given a chance to refute the allegations raised in the tribunal.

In a statement to this masthead, Furini described his own frustrations overseeing offshore processing and Operation Sovereign Borders, including confronting Home Affairs resistance to “new ideas and the delivery of outcomes” and the “persistent high-stress environment” encountered by multi-agency, defence and departmental staff.

Furini also said that he inherited rather than initiated offshore processing contracts, and that he was not interviewed by the Richardson inquiry.

That inquiry recently probed allegations that Home Affairs hired offshore processing contractors with suspected involvement in corruption or which were controlled by powerful Nauruan and Papua New Guinea politicians.

The issue of Australian government contracts being tainted by corruption came to the fore last year, when the Pacific Payments investigation by this masthead and 60 Minutes uncovered damning evidence that millions of dollars were paid to suspect contractors or allegedly corrupt overseas politicians.

The investigative series prompted the Albanese government to commission Richardson, the ex-ASIO and Defence Department chief, to conduct a review which remains secret. While the government is yet to release his report, this masthead has confirmed it found Home Affairs failed to undertake basic due diligence when awarding contracts totalling billions of dollars.

Federal police are separately running investigations into Australian offshore processing contractors Canstruct and Paladin, probing allegations the firms paid bribes or engaged in fraud after they won contracts worth hundreds of millions of dollars. Both firms have previously denied any wrongdoing. Canstruct declined to comment on Tuesday citing confidentiality.

In his tribunal evidence, Elias alleged millions of dollars were paid to contractors without adequate scrutiny, meaning the Australian government could not be certain if services it was paying for were actually delivered.

“For some reason a decision had been taken to take basically my whole team’s eyes off contract delivery,” Elias told the tribunal in a September hearing.

“I found this to be both extraordinary and very stressful … My team was effectively blinded from being able to manage the money that we were entrusted to actually manage.”

There is no suggestion by this masthead that Furini was responsible for ensuring the day-to-day management of contracting or was negligent in his handling of procurement, although Richardson is understood to have identified those in other management roles as responsible for some of the failings his inquiry has separately uncovered.

Elias is fighting the department after it challenged a Commonwealth workplace health and safety authority decision to compensate him for mental health-related injuries he claims were suffered overseeing the offshore regime.

“We had to renew these broken, unfit-for-purpose contracts at extraordinary expense to the public,” Elias told the tribunal hearing, describing how he uncovered a series of suspicious invoices, including a $6 million request for payment from a health services contractor “related to purchases of golf umbrellas” and other items unrelated to health services.

Lionel Aingimea, the president of Nauru from 2019 to 2022.Credit: Nauru government

Elias alleged he held “great concern under the Commonwealth procurement rules as to whether we were actually doing the right thing or even abiding by the law”.

Elias also claimed that Canstruct was paid a monthly fee of around $600,000 for a service “which hadn’t taken place for 2½ years” and that the firm was paid for other potentially improper services, including “training the [then] president’s [Lionel Aingimea’s] guard dog” and giving “free meals” to foreign officials.

“I was very concerned about the waste and use of public monies,” Elias said.

Elias also described how the Nauruan government sought to milk funds from Australia, including after the near-fatal bashing of an asylum seeker who needed to be flown urgently to Australia.

“The Nauruan government were trying to charge us an extra $5000 a night to switch on the landing lights,” he recalled in his evidence.

In cross-examination, a lawyer for Home Affairs challenged Elias about why he had failed to raise his purported probity concerns in writing before he took sick leave in 2021, and accused the assistant secretary of presenting a “self-serving reconstruction” to the Administrative Appeals Tribunal to secure compensation.

Lawyer Sarah Wright also accused Elias of including misleading material on his resume and of lying in his evidence, allegations the senior public servant rejected.

During the hearing, tribunal member William Frost also raised concerns about “the potential” that Elias may have given some “false or misleading” evidence.

However, Elias’ barrister, Andrew Berger, KC, told the hearing that his client’s credibility had been unfairly attacked.

Berger said that another senior Home Affairs official, Alana Sullivan, had confirmed that Elias had raised his “moral objection” to the size of certain payments to contractors. Berger told the tribunal that Sullivan had also raised concerns about Furini’s workplace manner, although the retired major-general said in a statement that no concerns had ever been raised with him.

In a statement, Home Affairs declined to comment, citing the fact the tribunal was yet to rule on the validity of Elias’ compensation claim.

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