Investor backs Palaszczuk’s man despite ‘bad smell’

Tech investor Steve Baxter says Annastacia Palaszczuk’s chief of staff’s only crime was ‘backing a Queensland business’.

Steve Baxter has backed David Barbagallo’s integrity.

High-profile tech investor Steve Baxter says the only crime of ­Annastacia Palaszczuk’s chief of staff was “backing a Queensland business” despite the “pretty bad” perception of a $267,000 government investment in a company co-owned by the top political staffer.

The Queensland Premier has been in damage control since revelations emerged last week that her chief of staff, David Barbagallo, was a director and shareholder of Fortress Capstone, which received taxpayer-backed financing last year for a cruise-tracking smartphone app.

Mr Baxter, a former Shark Tank judge, is also a shareholder in the company, and was the government’s unpaid chief entrepreneur when the $80 million Queensland Business Development Fund made the co-investment in February last year.

The Liberal National Party has asked the state’s corruption watchdog to investigate the ­financing, partly because of its “connections to the highest levels of the Palaszczuk government”.

“The investigation must consider whether the decision-makers were aware of the ownership of Fortress Capstone when the decision was taken to award it the grant, and whether any undue ­influence was exerted,” LNP deputy leader Tim Mander wrote to the watchdog this week.

But Mr Baxter slammed the suggestion as a “gutter thought” and said he had no involvement in Fortress Capstone’s application, and did not believe Mr Barbagallo had either.

“Have you ever been to France? Have you ever eaten the cheese there? Three-quarters of it smells like old socks, it smells terrible, but Christ, it tastes good, doesn’t it?” Mr Baxter said. “So if you were to go on the smell, the perception’s pretty bad, but if you put some context around it, it’s actually something worth devouring. That is what we have here.

“David Barbagallo’s only crime is actually backing a Queensland business, providing there’s no ­impropriety turned up with respect to the process, which I doubt.”

He told The Weekend Australian that the independent panel of entrepreneurs that made the ­decisions for the government fund was beyond reproach. And he heaped praise on the government’s investment arm, the Queensland Investment Corporation, which ad­ministers the fund.

“I’d be highly shocked, knowing these professionals, if they’d put up with any political interference,” Mr Baxter said.

“I can understand how people might think that, but it’s a gutter thought … I’d be highly surprised if (the panel) were swayed by an ­investor with a political connection. I would not be surprised if they were swayed by an investor with an amazing track ­record (of investing).”

Ms Palaszczuk’s office said Mr Barbagallo removed himself from the application process after he ­became her top political adviser in May 2017.

An application was made to the fund in July 2017, at the same time as Mr Barbagallo ­increased his and his wife’s shareholding in Fortress Capstone by an extra $100,000. The Premier’s ­office says Mr Barbagallo properly declared everything on his pecuniary interest register, which it has declined to publicly release.

A Crime and Corruption Commission spokesman said the watchdog was still deciding whether to investigate the matter.

Ernst & Young is conducting an independent audit on behalf of the Department of Premier and Cabinet.