Defence procurement scandal raises the spectre of corruption in business dealings

By Ben Wilson

The news that the Australian defence department handed over a contract to an American company that has been blacklisted in that country, after a court case over the over bribing of officials, should not surprise anyone.

This is bound to happen when was is called a limited tenure system is applied. This, with the rising lack of transparency in in government related contracts, sets the scene for corrupt dealings.

Officials in this case may or may not have been involved in this behaviour.

It remains that the system of backroom deals makes the possibility of wrongdoing much stronger. Backing this is the sad truth that this is not the only case.

Last year, a company called Sinclair Knight Merz was awarded hundreds of millions work of foreign aid contracts. It had been found guilty by the World Bank, of having engaged in widespread bribery.

With the defence department case, a company called Lock N Climb has been charged with offering bribes to air force personnel in the United States. Evidence before the court showed that practices used in the private sector had been transferred to dealings with the public sector.

This information was easily accessible to those making the decision to award the company the Australian defence contract. No one bothered to access this, or it was ignored.  At the very least, there has been a dereliction of due diligence.

At the worst, it is well within the bounds of possibility that the company could have applied its MO here in Australia.

Under the limited tender system, no other applicant was permitted to apply. This means that in effect Lock N Climb had the contract, even before the application was sorted out.

A spokesperson for the department admitted that the company had already been head hunted, “following market research.”

This spokesperson justified how the procurement was carried out, saying that it was “…conducted in accordance with the Commonwealth procurement rules. As the procurement was for a low risk, commercial off the shelf product, it was determined that a limited tender represented the appropriate procurement method.”

Besides the fact that this bunch of words revealing nothing, could have been lifted from the script of Yes Minister, it remains that an unfit company got the nod. If the rules for tendering don’t prevent this sort of thing from happening, the rules are wrong.

It leaves the question as to why these rules exist in the first place.

In the cesspool world of the lobbyists, donations to parties and political campaigns, networking and the awarding of post politics careers, it makes some sense to set up situations to make giving a friend a helping hand easier.

How far does this go in Australia?

Corruption is a disease that eats away at society and imposes a price on citizens. Uncovering it and setting up preventive measures are important. The limited tenure system must be put to an end. There must be complete transparency, with all details being made publicly available.

Perhaps this won’t do away with corruption properly while the lobbyist industry continues to thrive, and the mates club persists in the corridors of politics. But at least it’s a start.