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BFCSA: Home Affairs accused of misleading senators on Paladin contract

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Home Affairs accused of misleading senators on Paladin contract

Australian Financial Review Apr 4, 2019 4.25pm

Angus Grigg, Lisa Murray, Jonathan Shapiro


The Home Affairs Department has been accused of misleading a Senate committee over its failure to disclose that Craig Thrupp, the managing director of security firm Paladin, was removed from a $423 million refugee service contract on Manus Island.

During an often heated morning of estimates hearings in Canberra on Thursday, Home Affairs Secretary Mike Pezzullo and his staff came under repeated attack from Labor and crossbenchers over their handling of the lucrative refugee contracts.

Labor's Kim Carr asked why the department didn't think it relevant to disclose the removal of Mr Thrupp, when being questioned about Paladin's performance during estimates hearings in February.

At the time, when questioned if the department had any concerns about Paladin's performance, the committee was told "none whatsoever".

Just a day later The Australian Financial Review revealed Mr Thrupp's removal from the Manus contract.

"Why did you not advise the committee of this ... have you misled this committee?" asked Senator Carr.

"Is it not relevant that you had the managing director removed from the contract?"

Rex Patrick from the Centre Alliance asked if Mr Thrupp's removal "did not ring alarm bells".

Mr Pezzullo said the accusation of misleading the committee was a very serious one. He strenuously denied it, insisting there was "no misleading of this committee".

His department was never asked a direct question about Mr Thrupp's work on the contract, he added.

In questions on notice, the department revealed Mr Thrupp, who is also the controlling shareholder of Paladin, was removed for failing to comply with a direction from Home Affairs.

This concerned Paladin's promise to remove a staff member from the contract, over drug use and other issues, which never happened.

Home Affairs said Mr Thrupp had taken responsibility for the "non-compliance" and was stripped of his duties in relation to the contract.

Labor also accused the department of repeatedly denying it a briefing on the Paladin contract. Mr Pezzullo conceded it was unusual for the department to deny the opposition such briefings.

Following a series of reports in the Financial Review, Labor asked Auditor-General Grant Hehir to investigate the Paladin contract. On Monday, Mr Hehir confirmed he would investigate how Paladin was awarded the Manus Island contract, as part of a broader review of the procurement practices surrounding Australia's offshore processing centres.

The report, due to be tabled in Parliament early next year, could be used by an incoming Labor government to weaken Home Affairs or even break up the super-department. Given the animosity between Mr Pezzullo and Labor there is also speculation he may be asked to stand aside.

In addition to the Paladin contract, the Auditor-General will investigate why a building project on Manus Island was abruptly cancelled, costing taxpayers up to $9 million. He will also look at an $82 million contract awarded to the politically connected PNG company NKW Holdings.

Asked about a report in The Age and The Sydney Morning Herald that NKW may have been inflating invoices, Home Affairs officials said they had no evidence this was the case.

The newspaper report cited emails from a Bank South Pacific manager in November 2017 which said the department was "paying every invoice" and that they suspected there are "some inflated quotations and invoices".

Home Affairs also denied a separate report that it was told about a senior PNG official asking an unnamed Australian contractor for a multimillion-dollar donation to the ruling party of Prime Minister Peter O’Neill.

"To our knowledge, our records do not reflect anything like that," Mr Pezzullo said.



Government sends 140 Serco staff to Christmas Island despite no refugees being there

Sydney Morning HeraldApril 4, 2019 6.02pm

Michael Koziol


The Morrison government has sent an additional 140 Serco staff to the reopened Christmas Island detention centre at taxpayers' expense despite no refugees being sent there under the controversial medical transfer regime.

Just one person has been brought to Australia in the month since the new system has been law, in spite of the government's warnings that the changes would see hundreds of people evacuated from Papua New Guinea and Nauru.

Home Affairs secretary Mike Pezzullo confirmed the person had been brought to the mainland for medical treatment, bypassing the remote Australian territory of Christmas Island, where the government is spending up to $185 million reopening the detention centre it closed last year.

Only three further transfer applications had been made, Mr Pezzullo said, of which one was "being actioned".

Refugee advocates and the primary architect of the law, independent MP Kerryn Phelps, had argued up to 70 people needed immediate medical attention that could not be adequately provided on Nauru or Manus and would benefit from the medical transfer legislation passed in February.

The government had also warned of disastrous consequences, and Mr Morrison travelled to Christmas Island last month to reopen the facility ahead of the predicted influx.

Tuesday's budget revealed the government has planned to spend $185 million reopening the facility. It aims to repeal the so-called medevac laws and close the detention centre by July 1 if it wins the election.

Home Affairs officials told a Senate estimates hearing on Thursday that an additional 140 Serco staff had been dispatched to the remote island as a result of the decision to reopen the facility. Some were based on the island while others were "coming and going".

Serco handles security and logistics at the facility on behalf of the government. There were also 14 medical staffers on the island and a small number of extra Border Force and Federal Police officials.

Home Affairs assistant secretary Stephanie Cargill said the $185 million cost was based on the assumption up to 250 people would be detained there. Currently the population is zero. But much of the expense involved fixed costs related to the reopening.

Mr Pezzullo confirmed: "There are no transferees on Christmas Island ... since the passage of the [medevac bill] no persons from regional processing countries have been transferred there."

Greens leader Richard Di Natale - who is also a doctor - suggested the shortage of transfer applications was due to the government placing a "giant roadblock" in the way by reopening Christmas Island.

"It would be a dereliction of my duty as a doctor to refer [people] to a facility where they will be away from their family and won't get access to the complex care that they need," Senator Di Natale said.

He said it was better for refugees and asylum seekers to stay in Nauru or Papua New Guinea than go to Christmas Island.

Senator Di Natale said the government's frenzied attempts to stop the medical transfer bill passing in February showed the laws were serious and could still have a significant effect.

Finance Minister Mathias Cormann defended the government's expensive decision to reopen the remote Christmas Island facility, saying it was based on "clear and unambiguous advice" and that "for all intents and purposes [the decision] appears to have had the desired effect".

Senator Cormann said Mr Morrison's press conference on the island "helped to send a very strong message into the region, in particular to people smugglers who might have thought they had an opportunity here to start their vile trade again".

The Christmas Island facility was built by the Howard government and first utilised under Labor in 2008. Located 2000 kilometres north-west of Broome, it is far closer to the Indonesian island of Java than the Australian mainland.

The government mothballed the detention centre late last year, one of 20 such facilities it closed around the country.

Dr Phelps was contacted for comment.

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