Opinion: secret airport land deals set to expose rotten public service practices

By Bernard Keane

Wednesday October 21, 2020

(Image: Leppington Pastoral Company/Facebook)

The public servant at the centre of the extraordinary valuation process for the Leppington Triangle that generated a result 10 times greater than the worth of the parcel of land is the focus of an investigation initiated by the Department of Infrastructure in what could become the biggest Public Service scandal since the 1990s.

There are multiple inquiries and investigations underway into the debacle that saw the Department of Infrastructure hand nearly $30 million to a Liberal donor for a parcel of land near Western Sydney Airport in 2018 when it was worth barely $3 million. The Australian Federal Police (AFP) have been investigating the matter since July 10, after the Australian National Audit Office (ANAO) became alarmed at what it had discovered in its audit and referred the matter to the police.

This was the first time the ANAO had ever referred a matter to police, and reflected that they had uncovered information “that couldn’t be explained” and which “was suggestive that the Commonwealth may have been defrauded”, according to Auditor-General Grant Hehir, speaking to an estimates hearing late last night. Hehir took the unprecedented step of personally contacting AFP Commissioner Reece Kershaw, long before the audit itself was completed.

In addition to the AFP investigation, Department of Infrastructure Secretary Simon Atkinson yesterday revealed the department is conducting its own inquiries. It has commenced an independent audit of the entire acquisition process, and it is investigating a former member of the Western Sydney Airport unit for failing to disclose a shareholding in South32 while involved with negotiations with the company over a biodiversity management plan.

But it is a separate inquiry into four major breaches of the public service code of conduct, being conducted by former inspector-general of intelligence and security Vivienne Thom, that deals with the heart of the scandal.

While not bearing the same potential consequences as a criminal investigation, the inquiry — which will proceed in parallel with the AFP inquiry — will examine why a departmental official apparently insisted on employing a valuer selected by the property owner and ensured that the valuation was conducted on the most generous assumptions possible.

The Thom inquiry will examine four allegations that the public servant

  1. Selected a valuer proposed by the property owner without any proper procurement process or assessment of whether the valuer was up to the job;
  2. Ordered the valuer to conduct a “desktop valuation” and then a “restricted assessment” rather than properly valuing the property and ordered the valuer to value the property based on the best possible rezoning potential;
  3. Repeatedly withheld information from senior departmental staff, including failing to tell them the cost and the existence of a number of different, much lower valuations; and
  4. Met informally with the landholder at a coffee shop, alone, and did not prepare a file note of the meeting.

Each of the four allegations gives rise to a large number of potential breaches of the public service code of conduct. But the inquiry will also shed light on what Hehir correctly noted was the “inexplicable” nature of the conduct involved — why a bureaucrat, who had met informally with the landowners, appeared hell-bent on getting the highest possible price for the land and keeping that secret.

The landowners are the Leppington Pastoral Company, owned by the billionaire agribusiness family of Ron and Tony Perich, who also hold a controlling stake in the troubled Freedom Foods, located in nearby Ingleburn.

While the results of the inquiries and investigations lie ahead, it seems increasingly clear that this is a bureaucratic scandal — and a huge one — rather than a political one, with possible malfeasance at the official level rather than by ministers who, like senior Department of Infrastructure officials, were kept in the dark.

Even so, any serious findings or a prosecution will reflect poorly on senior officials of the time, including the current treasury secretary Steven Kennedy, who was infrastructure secretary from 2017-19.

Infrastructure Minister and Deputy Prime Minister Michael McCormack has added some dark humour to the debacle, however. Clearly assuming that this was a political scandal and yet another rort by a government that has now accumulated a long record of corruption, McCormack instinctively defended the purchase as “a bargain” and “a very good investment”. Presumably if he’d known this was one scandal that his colleagues had nothing to do with, he would have been less effusive.

Yesterday Labor’s Penny Wong asked Atkinson if there was any evidence for McCormack’s conclusion. “Not that I’m aware of, senator,” he replied. But evidence of a different kind is being accumulated that points to one of the grimmer moments in recent APS history.

This article is curated from our sister publication Crikey.

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