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Nauru’s President David Adeang, a predecessor and other individuals have been accused in the Senate of corruptly siphoning off millions of dollars of Australian taxpayer money intended for the island’s arcane offshore processing regime.
A previously unreleased report by Australia’s financial intelligence agency, Austrac, suspected Adeang of “corruption and money laundering” after detecting a “rapid movement of large volume and value of funds”, the Senate has been told.
The Greens senator David Shoebridge read sections of the unreleased Austrac report into Hansard in the Senate on Tuesday night. He alleged that the Albanese government had signed a $2.5bn deal with Adeang to deport more than 350 people in the NZYQ cohort to the tiny Pacific nation, despite knowing of the agency’s suspicions of corruption and money laundering against him.
The NZYQ cohort are a group of about 350 non-citizens who have had their visas cancelled on character grounds but who cannot be returned to their home countries, largely because they face persecution.
Adeang visited Canberra last week for a series of meetings with government ministers, including the foreign and home affairs ministers.
The report from the Australian government’s financial intelligence agency alleges suspicious transfers of millions of dollars reported by financial institutions in 2020 when Adeang was a member of parliament. The report also details suspicious activity by Lionel Aingimea, then the president of Nauru, now the foreign minister and minister for police.
“Suspicious matter reports submitted by the Bendigo and Adelaide Bank Limited’s customer service agency in Nauru reported suspicious financial transactions by the president of Nauru [then Aingimea], his family and associates,” Shoebridge, reading from the Austrac report, told the Senate. “These transactions involve the movement of funds between personal and business accounts, transactions on behalf of others and activity indicative of money laundering and corruption.
“These suspicious transactions occurred over a nine-month period from January to September 2020 in Nauru totalling over $2m in combined credits and over $1m in combined debits.
“President of Nauru, Lionel Aingimea, first lady Ingrid Aingimea, brother of the president, David Aingimea and member of parliament, David Adeang, are linked to the reported suspicious activity.”
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A further “suspicious matter report” from September 2020 “relates to rapid movement of large volume and value of funds by David Adeang, forming a suspicion of corruption and money laundering”, the Austrac report was said to have stated.
Shoebridge said the suspicious matter reports indicated Adeang had received funds from a company called 1402 LRC Car Rentals and Construction, a company associated with Aingimea’s wife. The company held subcontracts with a Brisbane firm, Canstruct International, which was contracted by the Australian government to run Australia’s offshore processing regime, and its detention centre on Nauru.
The Austrac report highlighted several transactions flagged by banks reportedly made by Adeang, including: 15 Osko payments, three of those from the Aingimea-linked 1402 LRC Car Rentals and Construction, totalling $113,797; 462 transactions associated with building and construction reference of payment totalling $248,888; 140 ATM withdrawals totalling $68,840; and one branch withdrawal of $700.
The Austrac report also said: “[Adeang] was investigated in 2015 by Australian Federal Police for alleged bribery in relation to phosphate mining in Nauru.”
Shoebridge told the Senate that Australia’s “cruel and corrupt offshore detention arrangements with Nauru must be torn down”.
“Let me put this clearly, the Australian government has, at all times, known that the current Nauruan president and key members of his government are seriously corrupt, and they still signed a $2.5bn deal with him,” Shoebridge alleged in the Senate on Tuesday night.
“Corruption follows cruelty and it breeds in secrecy, and that’s the Nauru deal and offshore detention all over. We must stop the rorts.”
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Shoebridge said payments to LRC Car Rentals and Construction had been made through the government’s major contractor between 2017 and 2022, Canstruct International. Canstruct made more than $1.8bn from a succession of expanding offshore processing contracts with the Department of Home Affairs, despite a litany of controversies and the exposure of consistent abuses of refugees and asylum seekers.
Guardian Australia contacted Canstruct with a series of questions about alleged corrupt payments. Canstruct, which appears to no longer be operational, has not responded.
The Guardian also put a series of questions to Adeang’s office, the Nauruan government and the Nauruan embassy in Canberra about the allegations of corruption but has yet to receive a response.
A spokesperson for the home affairs minister said: “The government takes advice from our security, intelligence and law enforcement agencies, not from the Greens political party.”
Subsequent to the Austrac reports, the Albanese government commissioned the former defence chief Dennis Richardson to conduct a review into allegations of corruption in Nauru in 2023. Examining multiple contracts and subcontracts, he found that some contractors suspected of drug smuggling and weapons trafficking had been handed multimillion-dollar offshore contracts but concluded that the Australian government “may have had no option but to enter into contracts with these companies” due to the high-risk environments of offshore processing.
Guardian Australia put a series of questions to Austrac about the allegations made by Shoebridge but has not yet received a response.
Australia’s secrecy over its dealings with Nauru, its former colony, have raised consistent criticism. Nauru itself has no free press and does not allow independent journalists to visit the country.
The Australian government has refused to reveal the details of the $2.5bn agreement it has signed with Nauru to resettle members of the NZYQ cohort, as well as details of its offshore processing contract, worth nearly three-quarters of a billion dollars with a US private prisons operator.
The government also refuses to say how much it is paying Papua New Guinea to hold asylum seekers and refugees formerly detained on Manus Island, which is part of PNG. Previous governments have refused to release details of offshore detention contracts, saying their disclosure would damage Australia’s international relations, as well as keeping secret the Australia-Nauru security partnership memorandum of understanding signed nearly a decade ago.
