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Department of Industry officials ‘stonewalled’ MPs on $900,000 corruption claim

Government officials have repeatedly stonewalled MPs trying to get answers about a $900,000 ‘success fee’ for a contract that ‘smells like corruption and looks like corruption’.

Senator Barbara Pocock in Parliament House. Picture: Martin Ollman / NewsWire
Senator Barbara Pocock in Parliament House. Picture: Martin Ollman / NewsWire

Government officials repeatedly and deliberately stonewalled a parliamentary committee trying to get answers about a $31m contract awarded to a $100 shell company that “smells like corruption and looks like corruption”, says a member of the committee.

The Department of Industry “regularly obfuscated and appeared to cover up what really has happened” for more than two years after it awarded the massive contract to i4 Connect, according to Greens Senator Barbara Pocock, who sits on the economics legislation committee.

The comments follow revelations in The Australian that the National Anti-Corruption Commission has failed for 16 months to decide whether to investigate allegations the company paid a $900,000 “success fee” to a contractor engaged by the ­depart­ment to advise on the tender program.

Senator Pocock told The Australian she had “no confidence” the case would be dealt with properly by the NACC in light of its recent performance and feared the referral to the commission would become “a cover for inaction”.

“The department has finally rolled over after years of denial and (has) now handballed it to the NACC, which is a real worry in itself, given the poor track record of the NACC to date”, she said.

The NACC has come under fire over concerns about its focus and performance, particularly after its initial refusal to investigate the Robodebt scandal led to a finding of “officer misconduct” against Commissioner Paul Brereton over a conflict of interest.

Senator Pocock also pointed to the failure of the NACC to provide any information about its investigation of PwC, banned from bidding for government work following the tax leaks scandal.

National Anti-Corruption Commission commissioner Paul Brereton. Picture: Martin Ollman / NewsWire
National Anti-Corruption Commission commissioner Paul Brereton. Picture: Martin Ollman / NewsWire

“At every Senate estimates I ask the NACC about that and I hear nothing … so it’s very frustrating the way that the NACC, and in particular the commissioner himself, have acted gives me no confidence that this matter is going to be dealt with properly.

“In fact, in the wake of Robodebt, I’d say the situation is becoming increasingly untenable. Labor really needs to wake up and make this process work much better.”

The i4 Connect contract was awarded under the now-closed Entrepreneurs Program despite not meeting crucial tender requirements and being $10m more expensive than any other tenders, at least two of whom had decades of operating experience.

In June last year Senator Pocock told a Senate estimates hearing: “This smells like corruption and looks like corruption”, but was told by department officials that even if such a fee had been paid, it would not have been unlawful.

The only investigation undertaken by the department was to call the contractor – who had been contracted to the department as an adviser – to ask if he had taken the money. It appears he denied it.

The department had never asked to have a look at i4 Connect’s books to see if the $900,000 payment had been made because “at the time our conclusion was that making such a payment would not have been unlawful”, one official said.

“It is deeply shocking, a classic case of a government department – a really important department that allocates a lot of taxpayer money – stonewalling senators during estimates, not once, not twice, but many times”, Senator Pocock said. “The allegations are very serious, that someone helped write the tender documents from within the department and received a payment of a finder’s fee – that is really on the nose.

“I found the department’s stonewalling deeply offensive, and I have to say, and it hasn’t been only once, it’s been … over years.”

After the corruption allegation was raised at Senate estimates, i4 Connect applied to deregister with ASIC, claiming to have less than $1000 in assets.

Senator Pocock asked the then minister, Ed Husic, to seek a stop order from the court and notify ASIC to prevent the company being de-registered because that would have breached its contractual obligation to maintain $20m of insurance until 2030. It would also have allowed the company to legally destroy its records.

On March 1 last year, frustrated by two years of obfuscation, the unsuccessful tenderer-turned whistleblower referred the case to the NACC. Four months later, the department also reported it.

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Original URL: https://www.theaustralian.com.au/nation/department-of-industry-officials-stonewalled-mps-on-900000-corruption-claim/news-story/75b2298dae3054d9e62a347b979e87b7