Weapons company under corruption cloud handed major new contract after NACC squibs investigation
Anti-corruption expert says NACC Commissioner Paul Brereton adopted "a stupid approach" and "needs to resign immediately"
Part 1 of 3
The National Anti-Corruption Commission either missed or ignored obvious red flags for corruption in its initial handling of the $1.2 billion Thales munitions deal that made headlines in June. The NACC’s decision to send the case back to the department that signed the deal in the first place for a preliminary investigation showed incompetence and poor judgement, according to a 35-year anti-corruption expert.
Chris Douglas, who worked for the Australian Federal Police for 31 years in intelligence and operational units before going on to advise domestic and foreign governments on the design and implementation of anti-corruption programs, said Commissioner Paul Brereton “needs to resign immediately”.
The NACC’s approach to the Thales referral is the third publicly known case of questionable NACC decision-making following the ongoing Robodebt debacle and the NACC’s report on Operation Bannister, in which it exonerated a former Home Affairs employee of corrupt conduct in relation to the Paladin matter.
The Defence Department referred the Thales deal to the NACC in June, two days after the national audit office released a scathing report into the department’s handling of the $1.2 billion munitions deal with the French multinational.
The audit office found that a Defence Department official had given Thales confidential information and solicited a bottle of champagne from the company during the long-running and complex negotiation process; and had subsequently taken up a position with Thales just before the company was awarded the 10-year contract to run two Commonwealth munitions factories.
The audit report revealed that the official’s emails to Thales, containing the confidential information and soliciting the champagne, had been copied to his departmental supervisor – a one-star military officer – and a second Thales executive.
The audit office found no evidence that the official’s supervisor had taken any action over what the auditor general described as “unethical conduct”.
The NACC, instead of immediately beginning its own investigation, returned the case to the Defence Department to undertake the preliminary investigation.
“The NACC instructed Defence to use records already held by the department to conduct its preliminary investigation and to then pass on any findings of improper behaviour,” said an exclusive ABC report.
Undue Influence asked the NACC to explain why it had referred the matter back to Defence. The NACC did not deny that it had done so. Nor did it provide an answer. It noted, “the making of a referral to the Commission does not prevent an agency from continuing its own investigation of a matter”.
The NACC also said that while it does not normally comment on referrals under consideration, as the Defence Department’s referral was on the public record it could confirm that the referral “remains under assessment in accordance with the Commission’s usual processes”.
Defence Department refuses to answer questions
“Defence completed its own internal investigation into this allegation in August 2024 and was unable to substantiate the allegation,” a defence spokesperson told the ABC.
Undue Influence asked the Defence Department to list specific aspects of the allegations that it was unable to substantiate, in light of the email trail reported by the audit office. The department did not respond.
NACC fails to properly investigate matter
Anti-corruption expert Chris Douglas said the red flags in this case included the fact that the former Defence Department official was employed in the explosive munitions area in the Capability Acquisition and Sustainment Group (CASG) – Defence’s weapons buying group – and that he actively solicited the champagne from Thales while having supplied confidential information. That the NACC missed or ignored such obvious red flags and sent the matter back to Defence for investigation showed “incompetence” and “poor judgement”.
Douglas said the behaviour of the official was a “clear signal” that he was “easily enticed and therefore more easily corrupted”. Douglas added that when a person has acted so blatantly, investigators should also examine what other deals the person was working on and with whom.
Douglas said it is reasonable for the NACC to refer matters back to the original department or agency concerned for preliminary investigation when they are minor, but given the red flags in this case it had been a “stupid” approach.
Furthermore, given the NACC has the power to compel witnesses to appear at a hearing, it should have used this power to interview the former official as well as other Thales executives, Douglas said.
The ABC stated that the former official was still working for Thales as an “industrial strategy advisor” on 19 October in its exclusive article.
Twelve days later the ABC reported that the former official had left the company: “Thales assured Defence and the Albanese government that the former departmental official was no longer conducting any paid work with the company”.
Despite the NACC’s still-open investigation into this matter, the Albanese Government last week announced that it had appointed Thales as the fourth “strategic partner” in its $22 billion Guided Weapons and Explosive Ordnance enterprise (GWEO).
After the announcement, Defence Industry Minister Pat Conroy referred to the disclosures of “unethical conduct” in the national audit report as an “unsubstantiated allegation” that was “flying around”. He said the Defence Department had “thoroughly investigated” the matter and found “no evidence to substantiate the allegation”.
The Defence Department is the largest procurement agency in the country, responsible for spending more than $50 billion of taxpayers’ money every year.
NACC Commissioner Paul Brereton has been a member of the Australian army reserve since 1975 and reached its highest ranks.
Marles: “It will be fully investigated.”
Speaking on ABC TV’s Insiders program on 30 June, soon after Thales had been referred to the NACC, deputy prime minister and defence minister Richard Marles said he was “very concerned about the facts of this particular case”. He said it was “really important” that the investigation “happens in a way which is completely robust, which people have total confidence in”.
Marles said he didn’t think there was a systemic problem within the Defence Department in relation to defence contracting, but he had wanted the department to refer Thales to the NACC as quickly as possible: “That is what has happened and it will be fully investigated,” he said.
Undue Influence asked Marles to comment on the NACC’s decision to send the case back to Defence. We also asked for an explanation why his department was unable to substantiate the allegations, in light of the email trail reported by the audit office. We received no response.
It seems clear to me that ministers and NACC Commissioners, specific to persons such as Richard Marles and NACC Commissioner Paul Brereton, must hate the people of Australia to the point they refuse to disclose their contra weapons sales, or our nation's hugely expensive weapons procurements.
Equally egregious to our Australia as to permit the proliferation of dishonest over/seas owned Arms and Weapons manufacturing corporations, to set up their sinister "international human slaughter trade) produced goods.
Another point to consider from an economic perspective, is the rapidly decreasing value of the US international fiat "non-securitized" trade dollar.
The New BRICS international trade unit currency is indeed securitized by both Gold and Silver.
Also, Australian-owned Gold mines must beware of avaricious USA owned mining interests, seeking to acquire or a takeover of Australia's richest goldmines, by exchanging their non-securitized USA (soon to be worthless) international trade unit 'fiat" dollar.
Defence procurement has been a joke for a long, long time. Submarines in the past, aircraft bought from US boneyards etc. Everywhere we look, in this country alone, brings to light problems. Defence, Robodebt, supermarket monopolies, right down to the RSPCA needing help to deal with other people’s lack of responsibility. Oh, and I forgot (I say sarcastically) endless charities for so many people needing help; like hungry kids. My goodness, in this country we have wanting children. It’s a disgrace. Governments think we are here to be told what to think, you know $368 billion to AUKUS while kids are going to school hungry. Meanwhile, the propaganda machine tells Australians things like “voting for a mining tax will cost jobs”. Norway took 90% of the profits from the North Sea oil-fields even when told investing companies would pull out; they didn’t. Don’t worry about how many kids we could look after with that tax money. And now we have a new corruption investigator that is headed by un-qualified people who get their friends off the hook. The list is never-ending. As long as I can remember the news tells us about domestic issues that need investigating, and a couple of years later the same story gets re-hashed. As I’ve said to Caitlin Johnstone, governments everywhere are simply corporate fluffers now. I’m happy to see BRICS gain multi-polar co-operative control now. The West has held the reins/whip for too long now, proving themselves murderers along the way. The US always gets what it wants. Look at all the major Australian companies I.e. banks, mining, pharma etc; majority shareholders are American. Even though I feel not enough Australians will ever think differently, I say good on you Michelle , keep going. And now to get something off my chest … nah joking.