THE list of rorts sounds like a spoof on corruption in tin-pot third-world countries, and it’s what led foreign minister Julie Bishop to shake up AusAID in late 2013.
The head of Papua New Guinea’s Law and Justice Secretariat Program gives himself and his staff a 23% pay rise without authorisation, duchesses departing workmates with over-the-top payouts, and hands out contracts to companies he owns, for a fraud of Australian taxpayer dollar aid worth about $600,000.
Nearly 200 tonnes of Australian food aid reaches famine-ravaged Somalia and is handed over to the World Food Program in Mogadishu, only to be completely looted, with the program confirming the loss two years later.
Two Australian aid payments totalling $1.6 million to set up remote area health clinics in the Solomons are made to a company called Joke Shipping Services, which has no ships, and whose only services are to its corrupt owners, who pocket the money.
The Australian can reveal full details of many of the individual acts of fraud and corruption by which AusAID funds went astray in recent years.
Most were never reported, in part because departmental officers advised Ms Bishop and her predecessor, Labor’s Bob Carr, to keep them hushed up.
The handwriting on the ministerial submissions obtained by The Australian through a Freedom of Information application shows that while Mr Carr, who was then a senator, simply noted the corruption, Ms Bishop was shocked and demanded briefings and action.
The corruption in the aid program was one of the reasons Ms Bishop decided to terminate AusAID as an autonomous agency and bring the aid operation within her department, to enforce a higher standard of accountability.
The Foreign Minister told The Australian last November that at a briefing in October 2013, soon after the Coalition had been elected to office, officials told her of “a number of fraud cases under investigation in the Australian aid program”. She would not disclose details of the fraud cases, she said at the time, “as investigations are ongoing’’.
The FOI application has revealed details of seven cases of fraud in the aid program, which took place under Labor, and how Ms Bishop brought bureaucrats to heel as a result.
In a ministerial submission, dated October 25, 2013, acting AusAID director-general Ewen McDonald provided Ms Bishop with AusAID’s 2012-13 Fraud Control Report, listing a number of cases of corruption.
Officials wrote that “AusAID’s potential losses in 2012-13 from detected fraud were $706,290”, but reassured the new minister that “levels of fraud against the aid program are low”.
In the space for ministerial comment, Ms Bishop circled the “please discuss” option on the submission, and wrote: “Need to discuss fraud within context of proposed benchmarks. Need to discuss overview on this — $700k lost to fraud is $700k!”
Mr Carr’s reaction was quite different when he was presented with the corresponding ministerial submission the previous year, which involved similar amounts of taxpayers’ money lost to corruption.
He simply initialled the submission, half circling the “noted” option, and did not circle the box “please discuss”….
Ms Bishop also took an interest in the PNG Law and Justice Secretariat rort, writing on a ministerial submission: “Late detection?” The fraud started in January 2011, but it was not until 12 September 2013, that AusAID director-general Peter Baxter wrote to PNG National Planning Minister Charles Abel about it.
“This is now AusAID’s largest active fraud case,” Mr Baxter wrote in his letter to Mr Abel. “We do not intend to initiate any public comment on this case. But it is an important issue on which our governments should demonstrate timely action.”
The FOI application unearthed three other cases of Australian aid money being rorted.
In East Timor in 2012, the finance manager and director of a local non-governmental organisation, Fundasaun Fatu Sinai Oecusse, allegedly “withdrew program funds for personal use” in the amount of $44,480.
Again in PNG and in the Law and Justice program, the Correctional Services finance director in 2012 overruled a recommendation from the IT manager for the purchase of computer equipment.
He then got a quotation from a different company “that was not reputable in the computer sales industry”, according to the ministerial submission.
The switch “points to the receipt of a kickback payment”, the submission says, and the fraud was put at $91,592.
And yet again in PNG, in the HIV/AIDS Prevention Campaign, a subcontractor to NGO Family Health International, “did not deliver an SMS campaign as per their contract”, with the fraud valued at $56,483….
The department, and Ms Bishop, were circumspect on the outcomes of the cases, but one ministerial submission says the PNG government paid back the nearly $600,000 in money rorted by the Law and Justice Secretariat.
The funds in the East Timor rort and the PNG HIV/AIDS cases were also recovered.
Ms Bishop would only say: “In five out of the seven cases, all amounts the subject of fraud against the commonwealth have been fully recovered.
“In the remaining two cases, action is ongoing to recover the funds subject to fraud, and to prosecute offenders.”
You can read the complete article here - http://www.theaustralian.com.au/national-affairs/foreign-affairs/julie-bishop-cracked-heads-over-ausaid-fraud/story-fn59nm2j-1227495653760