‘Commonwealth may have been defrauded’: Coverup could be afoot in bungled $30 million airport deal

By Matthew Elmas

Monday October 19, 2020

estimates
Penny Wong. (AAP Image/David Mariuz)

Public servants may have tried to cover-up the controversial Leppington Triangle land purchase when auditors questioned whether they had paid too much, Senate Estimates has heard.

In a tense day of hearings on Monday, Department of Infrastructure secretary Simon Atkinson and Auditor-General Grant Hehir were questioned about an $27.6 million over payment for a 12-hectate land parcel adjacent Western Sydney Airport in 2018.

Hehir told estimates on Monday evening he took the unusual step of raising the deal to the Australian Federal Police (AFP), saying a performance audit uncovered inexplicable information suggesting “the Commonwealth may have been defrauded”.

It was the first time Hehir had spoken publicly about a scathing audit of the deal in September, which found the department of infrastructure provided “inadequate response” to questions, inconsistent with “effective and ethical stewardship of public resources” – findings which last week culminated in federal police kicking off an investigation.

The audit office found the department paid $30 million for the land —sold by Liberal Party donor Leppington Pastoral Company— but was subsequently valued in its own accounts at just $3 million, or roughly ten-times less.

Grilled by Labor Senator Penny Wong on Monday morning, Atkinson revealed two public servants are under investigation over their role in the land deal, and one has been stood down, conceding a coverup may be afoot.

“What is looks like is these people tried to cover it up when the Audit Office came asking questions,” Wong said.

“Senator, I agree with you,” Atkinson replied. “… I’m trying to clean it up”.

“I want to get to the bottom of what happened, which is why I’ve pulled in an independent auditor of my own so that I can get to the bottom of the facts,” he said.

The AFP is investigating “potential criminal offenses” around the deal, which is also being probed by several internal department of infrastructure investigations that Atkinson, who joined the department after the deal in early 2019, promised to publicly disclose

Last month, Deputy Prime Minister Michael McCormack called the land deal a “bargain”, saying it would evolve into a “very good investment” over time, but on Monday Atkinson said he was not aware of any evidence to support that view.

In estimates on Monday morning, LNP Senator Gerard Rennick offered a defense of sorts for the $30 million price tag, arguing the property should be valued much higher than $3.065 million on the basis of surrounding market rates for real estate.

“Very cheap property … if you classified it under residential,” Rennick said.

There are nine valuations on record for the property, the lowest being $900,000 and the highest $30 million, although all but one valued the property at $6 million or below.

READ MORE: Federal police investigate $30 million government purchase of Western Sydney Airport land

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