Drugs, guns, corruption: Australia paid suspect companies to run offshore detention

Companies linked to suspected arms and drug smuggling, busting sanctions on Iran, corruption and bribery won massive government contracts amid systemic failures to adequately vet the businesses being paid to run the nation’s multi-billion dollar asylum seeker offshore processing regime.

Richardson produced a classified report as well as a declassified and redacted version. The latter was obtained as part of an investigation by this masthead and “It got contracts in areas in respect of which it had no particular expertise. Those contracts were consistently renewed over a period of time without ever being rechecked. And it was the failure to do the proper due diligence which led to Paladin getting contracts worth hundreds of millions of dollars.”

Asked if Home Affairs should have acted on warning signs that Paladin may be engaged in alleged criminal wrongdoing, Richardson said: “I think they should have pursued greater due diligence than what they did.”Canstruct’s margins, like Paladin’s, were healthy, with corporate files suggesting Canstruct pocketed more than $100 million in annual profit from its Home Affairs contracts.

Richardson said blame for the failures he uncovered lay with “senior people within Home Affairs” who were “responsible proper communication across the department”. He said Australians should be “rightly concerned about the millions of taxpayer dollars” that ended up in the pockets of suspect firms or overseas officials and said Richardson’s report should lead to negligent public servants or alleged bribe payers being held accountable.“It’s just the scale of it, and it seems to have been a wilful blindness , in many cases, as to not wanting to uncover the truth or ask the hard questions,” he said.

While Richardson concludes that in the case of the alleged drug and weapons smuggler, it would have been “at the time … unrealistic” for procurement officials to have known of the grave allegations, they should have known that other contractors were involved in suspected bribery, corruption and other crimes.

“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.” Richardson was also critical of Home Affairs’ decision to keep paying a company closely associated with Bhojani after he was convicted of bribery, although noted they had done so after seeking legal advice.

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