Corruption allegations lead to questions for key WestConnex contractor

Corruption allegations lead to questions for key WestConnex contractor

WENDY BACON

No company has so far won a bigger slice of the $16.8 billion WestConnex motorway project than Leighton Holdings. It is lead player in consortiums that have won three of the four tollway public tenders worth a total of nearly $8 billion.

This is the same company that has been reported by Fairfax Media last week to have used corrupt practices to secure billion-dollar government contracts overseas.

Fairfax Media reported that “Leighton’s 18-month campaign of corruption, bribery, fraud and money laundering is revealed in the biggest leak of documents in the oil industry’s history.”

The documents were leaked from the email account of Cyrus Ahsani, the chief executive of the global oil industry’s bagman, Unaoil. Unaoil is a Monaco-based company that specialises in paying bribes. It was paid tens of millions of dollars by Leighton in 2010 and 2011 to help the Australian company win Iraqi government contracts.”

At the centre of the Fairfax media story is the issue of companies including Leightons using corrupt practices and secret influence to win tenders. The documents leaked from the email account of Cyrus Ahsani, the CEO of the global oil industry’s bagman, Monaco based Unaoil was paid tens of millions of dollars by Leighton in 2010 and 2011 to help the Australian company win Iraqi government contracts.

Leightons Westconnex consortium partner Samsung were also revealed by Fairfax to have been separately involved in paying Unaoil for contracts.

Hundreds of emails from Unaoil provide evidence that high ranking Iraqi oil officials Dhia Jaffar al-Mousawi and Oday al-Quraishi were put on secret retainers or paid large bribes in return for supporting Leighton Offshore.

Leightons refused to comment on Fairfax’s allegations. In 2013, when they were first aired the company maintained it had correctly dealt with evidence of corruption. Samsung has also denied wrongdoing.

Leighton Contractors first Westconnex win was in 2014 when it was awarded the M4 widening project with the Italian company Rizzani De Eccher. Then last year it was awarded the $2.7 billion M4 East project with John Holland and Samsung C and T. Finally, in November last year, It signed a third $4.8 billion contract for the for the New M5 East tunnel in another joint venture with Dragados and Samsung C&T.This last project has not yet been approved by NSW Planning.

After the corruptions allegations were first publicised in 2013, Leighton Contractors changed its name to CIMIC but it is still generally known as Leightons. It is now owned by the Spanish company ACS.

The Westconnex contracts are being paid out of NSW and Federal grants and loans supplemented with some private money being raised by banks. Eventually these funds will be repaid by tolls or if the projects are not financially viable, from public funds.

A City Hub search of the Democracy for Sale donations website showed that since 2005, Leightons have donated more than $1,320,968 to Liberal, Labor and National parties during periods when key decisions were being made to support the WestCONnex by NSW and Federal politicians of both major parties. Since the late 1990s, the company and its subsidiaries have donated more than $3 million to the major parties.

The WestCONnex  Action Group (WAG) this week renewed its call for the NSW Premier Mike Baird to freeze the approval process for the New M5 and for all work across the project to halt until there a public inquiry is held into the massive 33 kilometre toll road.

“It’s incredibly disturbing to discover Leighton was bribing government officials overseas at the same time it was making huge donations to the Liberal, National and Labor parties here in Australia,” said WAG spokesperson Pauline Lockie. “This is shocking given it’s been awarded multi-billion contracts by the NSW Baird Government to build WestCONnex.

“Now Samsung has been accused of engaging in the same kind of corruption – and it’s won multi-billion dollar construction contracts to work with Leighton on the WestCONnex M4 East and New M5.”

“All along we’ve been saying that something isn’t right with this project. And we don’t think Australian taxpayers can be expected to believe corruption isn’t taking place with WestCONnex when the Baird Government has done everything it can to dodge transparency on the project, including transferring responsibility for it to the Sydney Motorway Corporation – a private company that’s immune from freedom of information requests and any obligation to release its contracts publicly.”

Ms Lockie said it was “crucial” that the process that led to contracts being awarded is investigated more deeply in light of the latest allegations against Leightons.

Once approval is granted for WestCONnex projects, the Sydney Motorway Corporation, which is tasked by the NSW Roads and Maritime Services (RMS) to construct and operate the roads, effectively hands control of the projects to Leightons.

For example when residents living in Sydney’s Inner West objected to drilling in their local streets before the New M5 is even approved, Leighton staff claimed to be acting as agents of both the SMC and NSW RMS.

The Australian Federal Police began investigating the overseas corruption allegations against Leightons in 2011 although no charges have ever been laid. Some of the substance of last week’s allegations were reported by Fairfax in 2013, years before its journalists received the leaked emails. So there is no way that Federal and NSW governments can claim they have not been aware of the allegations against Leighton Contractors.

A further investigation by City Hub has revealed that Leighton not only won the contracts but it played a key role in the development of the Westconnex concept during a time when it was making donations to both Liberal, National and Labor parties.

Even before he was elected in 2011, then Premier Barry O’Farrell promised he would deliver at least one tollway in his first term of office. It was clear by then that private investment would no longer support tollway contructions following the collapse of four tollway companies, including two involving Leightons.

According to Democracy for Sale political donations website, Leightons donated $150,000 to the Federal and NSW branches of the Liberal Party between 2009 and 2011.

The Liberal Party was elected in March 2011 and by October 2012, Premier O’Farrell announced that a huge new motorway now known as WestCONnex would go head. Then Labor Infrastructure Minister Anthony Albanese provided $ 25 million 0f Federal funds so an office could be set up to further develop the project.

Albanese’s decision was criticised by Greens Senator Lee Rhiannon in a speech to the Senate in 2013  in which she raised the question of tollway company political donations.

“The ears of politicians have been successfully bent by the likes of the motorway construction companies ….companies like John Holland, Leighton, Thiess and Macquarie Bank have given big donations to the major parties. The public do not know if deals are done behind closed doors, but there is the perception that MPs are favouring private road building businesses at the expense of public transport.”

In early 2013, the then Liberal Acting Premier Andrew Stoner selected several companies to be closely involved in helping design the WestConnex. One was Leightons, another was its subsidiary Theiss constructions. Macquarie Capital was assigned to look at financial aspects..

The purpose of this select team was to find out if WestConnex was viable. Needless to say they found it was a great idea. By being involved from the earliest days of planning, Leightons were ideally positioned for further involvement.

During the Federal election in September 2013, then LNP leader Tony Abbott campaigned strongly in favour of Westconnex. Pressure was on Labor to committ to the project. Labor PM Julia Gillard and Anthony Albanese agreed to provide $1.5 billion in funding,, although Labor disagreed with the route of the project preferring for the M4 East to go straight to the CBD.

According to Democracy for Sale, since 2010, Leighton Contractors have donated nearly $172,000 to the Federal Labor Party.

Hidden contracts, no transparency, donations to both major parties from a company that had already been reported to be involved in overseas corruption, inside running for favoured companies, sham consultation and planning. Is it any wonder that when you talk to the ordinary ciitizens in the inner Sydney about WestCONnex, they tell you the ‘fix is in.”

In the light of the Fairfax investigation, Senator Lee Rhiannon, who was a key developer of the Democracy for Sale project, has already again raised the issue of political donations by companies involved in WestCONnex. It’s an issue which the Greens are likely to raise in the Senate in coming weeks.

Senator Rhiannon told City Hub that in many ways the issues of corruption and political donations are closing linked and are “undermining people’s confidence in democratic processes and institutions. When decisions are made behind closed doors, people simply don’t believe that money is given for nothing.”  As the Greens spokesperson for democracy, she already has a political donations reform bill in Federal Parliament.

With issues of international bribery rorts, massive corporate tax avoidance and NSW political donation scandals colliding as the Senate prepares to sit next week, it looks like the Prime Minister Malcolm Turnbull may not quite manage the bonanza  of union bashing that he had planned when he arranged for the Senate to be recalled to Canberra early a few weeks ago.

Wendy Bacon is an editor of the People’s EIS and a supporter of the Westconnex Action Group. 

 

 

 

 

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