Paladin: Closed tenders and shady dealings

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Paladin head office, Kangaroo Island (Screenshot via YouTube)

The Paladin Group is a small company with a shack on Kangaroo Island – until last week – as its head office.

After all the media interest, as well as a PO Box in Singapore, Paladin now has an office in Canberra. The phone might even work.

According to its website, Paladin is ‘… a leading provider of project support services in the Asia-Pacific.’

These include ‘security, facility maintenance, garrison and life support services in the region'.

According to an Australian Financial Review (AFR) report, however, the Paladin Group has ‘… little experience and a poor reputation'.

But not to worry. Paladin won a tender worth $423 million over two years to run the Australian Government’s concentration camp on Manus Island.

Labor Senator Murray Watt asked the question on everyone’s lips:

‘How on earth did this tiny unknown company with no track record ever get $423 million in contracts from the Australian taxpayer?’ 

Home Affairs Minister Peter Dutton told Parliament that it was the responsibility of the Department:

"If there are issues, my department, the secretary, will deal with those issues."

Apparently,  Dutton doesn’t involve himself with any oversight at all of $423 million of taxpayer money.  Seriously?

Attorney General Christian Porter told Barrie Cassidy on Insiders that "there was a full and independent process in placefor the awarding of the tender to Paladin.

It is true there was a tender process. But it was a limited or restricted tender process. Here is what the Department of Finance says about limited tenders, after making the point that open tenders are the ‘default for all procurements valued above the relevant thresholds ($80,000 for non-corporate Commonwealth entities)’:

Limited Tender

  • Involves procurement based on quotes being sought directly from one or more suppliers.
  • Includes what was previously referred to as "sole source" and "select" or "restricted" source procurements.
  • Can be undertaken for any procurement under the relevant thresholds where it represents value for money. 
  • Can only be used for procurements above the relevant thresholds where it is specifically allowed by the CPRs [The Commonwealth Procurement Rules]. The value and reasons for the direct source must be documented.

In other words, Paladin was asked to tender for security services on Manus Island. It appears it was the only entity to tender.

No doubt the value and reasons for this direct source from Paladin are, as the Department of Finance says, documented. The Australian public deserves the release of this documentation to ensure nothing untoward has happened. However, according to the AFR report, not only did the draft contract attempt to exclude the arrangement from Freedom of Information (FOI), which was later reversed, it also specifically excluded the contract from the Commonwealth Procurement Rules (see above). 

It appears that we have a limited tender contract that may breach the mandatory requirements of the Department of Finance. Otherwise, why have the procurement rules excluded from the contract? 

The Department has been less than forthcoming:

'Home Affairs refused to comment on its attempts to exclude Paladin from FOI laws or provide a reason why it was not subject to Commonwealth procurement rules.

"The department has nothing further to add," it said in a statement.'

What else do we know, apart from the fact that Paladin appears to be a group of ex-military figures? We know that Craig Thrupp, one of the company’s key figures, ‘… left a string of failed contracts and bad debts across Asia.’

As well, according to Radio NZ,

‘Paladin's local PNG director, Kisokau Powaseu, was detained in Port Moresby last month and charged with misappropriating funds and money laundering. One of the company's directors, Craig Thrupp, is banned from entering PNG.'  

We also know that the company did not have enough money to begin the contract. The Government had to advance them $10 million to get started. On top of that, Paladin last week advised that it had 'moved ownership of its Australian entity from Hong Kong to Singapore’. In information released last week, but with effect from 1 November 2017, all the shares in Paladin Aus were transferred from the Hong Kong holding company of Paladin to the Singapore-registered Paladin Holdings Pty Ltd.

This could have been to ensure the company met basic security requirements to win the tender. It might be for tax reasons. The timing raises questions.

According to AFR:

‘… on September 21, 2017, Paladin Solutions PNG was awarded the initial $89.2 million tender to provide security services at centres until a larger contract was awarded to the Singapore entity.’

That larger contract, for $176.8 million, was awarded to Paladin Singapore on 28 February 2018. The amounts have since been increased.

In addition, Paladin recently took over the PNG security company Black Swan. Black Swan allegedly has close links to Papua New Guinea Prime Minister Peter O’Neill — links they both deny.

That is not the end of it. Catherine Graue on ABC Radio interviewed Charlie Benjamin, the Manus Island Governor, who called for an investigation into the Paladin contract. (The interview starts about 3.45 minutes.)

Paladin is the reality of so-called "border protection". We deserve to know what our money is being misspent on.

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