Annastacia Palaszczuk chose to praise, not sack aide

Queensland Premier Annastacia Palaszczuk knew more than a year ago that her chief of staff had not properly declared his interests in a tech company.

Queensland Premier Annastacia Palaszczuk speaks with chief of staff David Barbagallo in 2019. Picture: AAP

Queensland Premier Annastacia Palaszczuk knew more than a year ago that her chief of staff had not properly declared his interests in a tech company that received $267,000 in government investment, but did not move to discipline or sack him.

Instead, she praised David Barbagallo when announcing his resignation in October, publicly insisting his departure from her office did not mean he had done anything wrong.

Ms Palaszczuk on Thursday said she had not misled parliament while defending her former top staffer, but conceded she felt “extremely disappointed” and “let down” that he had not fulfilled his obligations.

“I hold integrity very dearly to my government, and I’m … extremely disappointed … I mean staff members have to abide by their obligations, and some of the obligations in this circumstances weren’t met”

Ms Palaszczuk’s comments followed findings from the Crime and Corruption Commission, delivered on Wednesday, that Mr Barbagallo had not acted corruptly but had failed to declare he was a director and chair of Fortress Capstone, the company that received government funding.

However, a government-­ordered internal audit by Ernst & Young, delivered to Ms Palas­zczuk’s director-general, Dave Stewart, on August 30 last year and released by the government only on Thursday, sheds light on what she knew and when.

The EY audit was ordered by Ms Palaszczuk after she was blindsided at last year’s budget estimates by opposition questions about Fortress Capstone receiving $267,500 in investment funding from the government’s Advance Queensland Business Development Fund.

The audit found while Mr Barbagallo had formally declared his shareholding in Fortress Capstone — which received the government investment to help develop a cruise-ship-tracking smartphone app — he did not say he had increased his shareholding by about $100,000 in July 2017, coinciding with the company applying for government funding.

EY also found Mr Barbagallo did not formally declare Fortress Capstone had been awarded funding.

The CCC report makes clear that Mr Barbagallo’s failures to fully disclose his business interests, including that he was director and chair of the company, were breaches of the Ministerial Act obligations, and could have resulted in dismissal or disciplinary action. Instead, he was allowed to resign.

His final day in Ms Palas­zczuk’s office was in October. When she announced his departure the month before, weeks after receiving the Ernst & Young internal audit, Ms Palaszczuk thanked him for “the work he has done in my office”.

The CCC report also reveals Mr Barbagallo’s lawyers said Fortress Capstone “was a company whose business was essentially located in the US”.