It is clear to many that AUKUS, in particular its early fulfilment stages, is becoming a debacle. In February, Defence Minister Richard Marles lauded as a ‘very unique’ arrangement Australia’s gift to the United States of $4.7 billion to bolster America’s struggling submarine output, highlighting that such an arrangement hasn’t been seen in other defence pacts globally.
Of course such an arrangement hasn’t been seen elsewhere! Most other countries wouldn’t agree to hand over this massive sum without ensuring there were provisions for a refund should the promised submarines fail to arrive.
In an inept performance in Senate Estimates in June 2024, Vice Admiral Jonathan Mead, head of the Australian Submarine Agency, woodenly refused to answer a straightforward question from Greens’ Senator David Shoebridge about whether the agreement Australia has struck with the US contains a clawback provision should the promised submarines fail to be supplied.
Mead’s performance, as recorded in Hansard, is mordantly comical:
It is thus obvious that Australia has no contractual way of recovering its money should the current or a future US President block the transfer of the submarines, as the US President is entitled to do under US legislation.
Australia is certainly ‘very unique’ in its willingness to part with almost $10 billion (the UK is getting a similar amount) in public funds with no strings attached.
Australia made the first payment of $800 million to the US in February and quietly transferred the second payment, a further $800 million, in July. It has committed to paying a total of US$2 billion ($3 billion) by the end of 2025, with the remainder to be paid over the decade to 2035‒36.
Under the AUKUS deal, both major political parties have committed to spending vast public resources with no consultation and minimal transparency and accountability.
Even though the Australian National Audit Office has exposed, in report after report, serious probity breaches in defence procurement, including unethical conduct between global weapons companies and the Australian government, these transgressions are routinely ignored. The weapons deals continue regardless.
The big winners from AUKUS so far have been nuclear submarine manufacturers in the United States and the United Kingdom. Australia has committed to providing almost $10 billion to boost the output of these companies, helping secure jobs for workers in America and the United Kingdom.
As there are no clawback provisions in either of these agreements, should President Trump ditch AUKUS, or if the submarine manufacturing capacity in the US and UK doesn’t sufficiently increase, Australian taxpayers will be picking up another multibillion-dollar defence tab with nothing to show for it. We’ve already shelled out $3.4 billion for no submarines, following former PM Scott Morrison’s shredding of the pre-AUKUS French submarine contract.
This is far from the only example of waste, misdirection and incompetence in Australia’s dealings with the global arms industry. Take the Albanese government’s engagement with global arms giant Thales. In October last year, the government signed up Thales to a further munitions manufacturing contract and a ‘strategic partnership’ in the new domestic missile-making endeavour, the Guided Weapons and Explosive Ordnance (GWEO) enterprise.
The new deal with Thales was struck despite the fact that Thales is currently being investigated by four countries for widespread criminal activity in three separate corruption probes. The accusations range from suspected corruption of a foreign public official, criminal conspiracy and money laundering relating to the sale of submarines and the construction of a naval base in Brazil; suspected bribery and corruption across four Thales entities in the UK and France relating to an arms contract in Asia, involving bribery, influence trafficking, handling stolen goods and money laundering; and suspected corruption and influence peddling, criminal conspiracy and money laundering linked to the sale of military and civilian equipment to an undisclosed country (case opened June 2023).
A fourth Thales corruption case is currently in court in South Africa. The country’s former president, Jacob Zuma, is being tried on 16 charges of racketeering, fraud, corruption and money laundering in connection with Thales. Zuma is accused of accepting 500,000 rand ($43,000) annually from Thales from 1999 as a bribe, in exchange for protecting Thales from an investigation into an arms deal supplying military hardware to South Africa.
The Defence Department claimed, in a written response to a Question on Notice from Greens’ senator David Shoebridge in 2023, that it was ‘not aware’ of the South African corruption case involving Zuma and Thales. This claim, if true, exposes a serious failure of due diligence by Defence in relation to one of its top contractors, raising questions about the efficacy of Defence’s monitoring and prevention of corruption in this high-risk industry.
In late June, Defence quietly cancelled its new munitions contract with Thales, just eight months after it was signed. It said there had been notable changes in the global defence industrial base that required the department to reassess its munitions manufacturing approach. The cloud of corruption hanging over Thales, which was public knowledge at the time the Defence Department signed the contract, was not noted as a factor.
The Thales example illustrates how a key democratic accountability mechanism, the National Audit Office and its reports, is routinely ignored. That includes an audit report last year on the former Coalition government’s 10-year munitions contract with Thales, which detailed ‘unethical conduct’ and serious conflicts of interest in the procurement process, amongst other irregularities. Despite the scathing audit report being released just months earlier, the above deal went ahead nonetheless, with Defence Industry Minister Pat Conroy soft-pedalling these accusations when they were put to him in a National Press Club address in October 2024.
How is it that such imbroglios occur again and again? Australian governments are highly susceptible to the ‘revolving door’ process in which politicians, the military and public servants move effortlessly between government, lobbying and the industry itself.
In what follows, no suggestion is being made of unlawful activity by any person named, nor that any of the appointments noted was unlawful.
The problem for Australia is not one of legality but of the perfectly legal influence of industry insiders within government, the lack of transparency, and the absence of management of the ‘revolving door’.
The revolving door
The ‘revolving door’ describes the movement of public officials into related private roles, and industry executives into related public roles. It is a widespread problem that undermines democracy, yet in Australia it remains unmonitored and unpoliced.
A large number of Australia’s senior government ministers and their staffers, military officers, and defence department officials move through the revolving door into paid roles with the weapons industry. Such moves are not illegal but they require a robust management framework—with rules that are enforced—to mitigate the inherent conflicts of interest. Australia’s feeble attempts at managing the revolving door have been completely ineffective.
Take the case of former defence minister Christopher Pyne, who discussed his future with EY Defence while still in parliament, then nine days after leaving politics, accepted a position with them.
Former ASIO boss Duncan Lewis joined the Thales Australia board just five months after leaving ASIO, having spent five years as its Director-General.
Within days of retiring from parliament on health grounds, former Labor MP Mike Kelly went directly from the powerful Parliamentary Joint Committee on Intelligence and Security to work for shadowy US-based data-mining and surveillance company, Palantir Technologies.
Brendan Nelson, former Liberal leader and defence minister, resigned as director of the Australian War Memorial to join Boeing (a major defence contractor). Prior to his resignation from the memorial, Nelson had also worked secretly for Thales for five years as a member of its ‘advisory board’, a role he claimed to have, in effect, undertaken for free, saying he donated his fees to the Memorial. At the same time, he was publicly defending the memorial’s controversial acceptance of donations from weapons companies, which included Thales. (This unusual relationship was covered in a program on the War Memorial by the ABC’s Four Corners.)
Allan Hawke, a former defence secretary, left public life and joined Lockheed Martin’s board, as did numerous other senior officials.
In the lobby
Numerous former senior politicians are now working as lobbyists for the weapons industry. Examples include: Liberals Christopher Pyne (Pyne and Partners), Joe Hockey (Bondi Partners), Arthur Sinodinos (The Asia Group) and David Johnston (TG Public Affairs); and Labor’s Kim Beazley (TG Public Affairs), Joel Fitzgibbon (CMAX Advisory), Stephen Conroy (TG Public Affairs) and Mark McGowan (Bondi Partners).
There are also plenty of former senior military officers pulling strings on behalf of weapons companies too. Examples are listed below.
The federal register of lobbyists provides some transparency, but does not cover the majority of people who lobby politicians. The register applies only to third-party lobbyists. These people operate as paid professionals, either individually or as an employee of a lobbying firm, on behalf of clients. Third party lobbyists make up just 20% of all lobbyists. The remaining 80% include, amongst others, company CEOs and people employed by corporations as ‘government relations’ advisers. This enables employees of major weapons companies to lobby politicians easily and legally, with zero transparency.
Reverse cycle: private to public
The government’s engagement with UK weapons giant BAE Systems’ local subsidiary best illustrates how this works.
The government gave former senior BAE Systems executives influential behind-the-scenes roles both before and during the tender process for Australia’s largest ever surface warship procurement, the $46 billion Hunter class frigates, a contract BAE went on to win. Few of these roles were publicly acknowledged.
BAE Systems was awarded the frigates contract by the Turnbull government in mid-2018. The names of the people appointed to an expert advisory panel to oversee the tender evaluation process were not made public. Here’s why: serious conflicts of interest. Two of the four-person panel had previously worked for BAE Systems, one of them as recently as 14 months earlier, as BAE’s Australian Maritime Director. After BAE won the contract, that same former BAE executive was selected by the defence department to be its lead negotiator, sitting across the table from his former employer.
Earlier, under the Abbott government, the former chief executive of BAE Systems Australia was appointed to the four person panel that designed Defence’s new procurement system, which ended up embedding the arms industry more deeply into Australia’s arms procurement process. He had ended his 37-year-long weapons industry career just nine months earlier. Although he was named, the government did not supply any biographical details. It did not tell the public that he had just spent a decade running BAE Systems Australia, one of Australia’s top defence contractors, followed by two years running BAE Systems Saudi Arabia. This former BAE Systems CEO was also hired by Christopher Pyne to help write Australia’s new shipbuilding plan, under which BAE Systems later became a big winner.
Lockheed Martin locks on target
Israel’s genocidal war on Gaza has put the issue of the extensive influence on the Australian government of Lockheed Martin—the world’s largest arms manufacturer—under the spotlight.
Lockheed Martin manufactures the F-35 fighter jet, which it supplies to the Australian Air Force, and which has also been used by Israel in its relentless bombing of Gaza.
As a member of Lockheed Martin’s F-35 consortium, Australian industry provides parts and components into the F-35 global supply chain. As at June 2024, more than 75 Australian firms were contracted in the F-35 supply chain and had earned $4.6 billion as a result. Lockheed Martin has stated that every F-35 in the air today—including Israel’s—contains Australian-made parts and components.
Lockheed Martin utilises the revolving door heavily in the US. Until recently, it had openly adopted the same strategy in Australia. From October 2013 until the end of 2021, the board of Lockheed Martin Australia boasted multiple former senior Australian public officials: at least two at any one time, more often three, and even four during one 20-month period.
They included a roll call of defence heavies from past decades, such as Chris Ritchie, the former Chief of Navy; Allan Hawke, Chief of Staff to Prime Minister Paul Keating and a former defence secretary; Kim Beazley, Australian ambassador to the US, a former defence minister and leader of the opposition; Geoff Brown, a former chief of Air Force; and Amanda Vanstone, a former Howard government minister.
The Lockheed Martin Australia board was quietly purged of its remaining two revolving door appointments (Brown and Vanstone) in mid-December 2021. The reason was not made public.
While this was a positive outcome, in democratic terms, one downside has been that Lockheed’s engagement of senior influencers has now gone dark. We know, by his own admission, that Kim Beazley returned to working for Lockheed Martin Australia as an adviser after he completed his term as WA Governor, but no details are available as to what his role entails. Generally, ‘advisers’ and ‘advisory boards’ assist with political strategising and lobbying.
On top of its former influential board members, three former senior Australian Defence Force officers have worked as chief executive of Lockheed Martin Australia. These include:
Raydon Gates, who retired from the navy in late 2008, after 40 years. In early 2011 he was appointed as Lockheed’s first local chief executive, a position he held for almost six years.
Vince di Pietro retired from the navy in March 2016, after 40 years. Five months later he joined Lockheed Martin and soon after became its chief executive for two and a half years.
Warren McDonald was deputy chief of Air Force until mid-2017 when he became the Defence Force’s inaugural chief of joint capabilities. He left the military in December 2020, after 41 years. Seven months later, he joined Lockheed Martin’s leadership team, taking over as chief executive in late 2021. He remains Lockheed Martin’s ANZ CEO today.
In 2024, Lockheed Martin Australia recorded a huge 29 per cent increase in its turnover from the previous year (from $423 million to $548 million) under the leadership of CEO Warren McDonald.
The UN Special Rapporteur on the occupied Palestinian territory, Francesca Albanese, released a report in July addressing the ‘economy of genocide’ in which she makes special note of Lockheed Martin’s F-35 program.
She called on countries to cut off all trade and financial ties with Israel, including a full arms embargo, and withdraw international support for what she terms an ‘economy of genocide’.
Francesca Albanese said that arms companies had turned near-record profits by providing Israel with cutting-edge weaponry to unleash 85,000 tonnes of explosives—six times the power of Hiroshima—to devastate Gaza, killing and injuring more than 179,411 Palestinians.
Australia’s refusal to cease the supply of parts and components into Lockheed Martin’s F-35 global supply chain places the nation at risk of being found complicit in Israel’s genocide.
Complicity in the world’s worst international crime is just one of the democracy-undermining consequences of Australia’s deep enmeshment in the US and broader Western military industrial complex.
This feature article started life as a talk to Australia’s Online Quaker Meeting mid-year. I later expanded it for ARENA Quarterly’s Spring 2025 issue, which was delivered to bookshops last week ($20). It is also online at Arena.
https://open.substack.com/pub/thiagodearagao/p/five-reasons-the-us-needs-australia?r=2di31u&utm_medium=ios