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Report Reveals Home Affairs Paid Millions to Contractors Under Federal Police Investigation

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An investigation has found Australia’s Home Affairs Department used contractors suspected of evading US sanctions against Iran.

A review by the former head of the Australian Security Intelligence Organisation (ASIO) has found that the Home Affairs Department lacked “proper due diligence” when awarding contracts to companies responsible for administering the country’s offshore processing system in Nauru and Papua New Guinea.

Dennis Richardson concluded that the Department had entered into arrangements with a company whose owners were suspected of trying to evade U.S. sanctions against Iran.

Suspicious money movement also suggested the probability of laundering and bribery. Labor Home Affairs Minister Clare O’Neil received the report on Oct. 10, 2023, but released it only on Feb. 12, 2024.

Other companies under investigation by the Australian Federal Police (AFP) also had contracts with the department, as did a company whose CEO was being investigated for possible drugs and arms smuggling into Australia.

Contracts Extended After Conviction

Mozammil Gulamabass “Mozu” Bhojani, director of another firm, Radiance International—contracted to provide accommodation services in Nauru—was convicted of bribing Nauruan officials in 2020, but the Department not only continued, but even extended contracts with the company for years after he was charged and convicted.

The AFP has confirmed it provided then-Minister of Home Affairs Peter Dutton with an oral briefing in 2018, a month before his Department signed a new contract with Radiance International, and two months before Mr. Bhojani was charged.

Questioned about this when the review was announced last year, Mr. Dutton described it as “inconsequential” and “complete nonsense,” and claimed the review itself was “a complete stunt.”

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Another contractor, Paladin Group, is under investigation by the AFP following allegations that it paid bribes totalling $3 million (US$1.96 million) in 2018 and 2019 to secure the backing of senior PNG officials for its offshore processing facility on Manus Island. The contract was worth more than $500 million (US326.12 million) over four years.

And former contractor Canstruct, which managed a $1.8 billion contract on Nauru between 2017 and late 2022, faces a separate AFP financial crime and bribery investigation.

Mr. Richardson was highly critical of the Department, saying: “Proper due diligence was lacking when it came to contracts with relatively small companies with limited or no public profile, and where operations were to be in high risk environments.

While accepting the Department was “operating within an environment of high pressure where time was often of the essence,” he concluded that “with proper due diligence, Home Affairs could have considered alternative suppliers, and, if this was not possible, the implementation of mitigating measures. But this was not done.

“Intelligence and other information, which was readily available, was not accessed. As a consequence, integrity risks were not identified.”

The Department May Have Had ‘No Option’: Report

However, the report also concedes that “even with access to the information available within government agencies, Home Affairs may have had no option but to enter into contracts with these companies.”

The AFP also came in for criticism in the report, with Mr. Richardson finding that: “In one instance, the AFP did not advise Home Affairs over a three-year period that it was investigating an individual who it knew had a contractual relationship with Home Affairs.”

Current Home Affairs Minister O’Neil blamed the situation on Mr. Dutton, now the Leader of the Opposition, questioning what he knew about criminal activity and when.

Although the report found no evidence of ministerial involvement in the contract or procurement decisions, Ms O’Neil said that did not mean he had no culpability.

“At the end of the day, the buck stops with the minister,” she said.

No individuals were referred to the AFP or the National Anti-Corruption Commission by Mr. Richardson, although the contact details of three people were passed on with their consent.

Criminal Investigation Could Follow

But Ms O’Neil said the review could still lead to criminal investigations by the AFP.

“The Australian Federal Police and where appropriate, the National Anti-corruption Commission, will investigate those claims,” the minister said.

Shadow Home Affairs Minister James Paterson said the review had found that the existing contract was still sound, and did not identify any deliberate wrongdoing.

It recommended the Home Affairs Department work to “enhance its integrity risk process and culture to better inform procurement and contract decision-making for regional processing arrangements.”

And that it should “foster and promote an ‘ask and tell’ operating environment that encourages collaboration, cooperation, proactive enquiry, and information sharing.”

The Home Affairs Department was taking the report “extremely seriously” according to its secretary, Stephanie Foster, who told a Senate Estimates hearing that it was implementing measures to address the concerns.

“We have dealt with the historic problems in those contracts,” she said. “This is not an area about which I will ever be complacent because of the risks involved in it.”

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