Home > Corruption, Papua New Guinea > Australia complicit as PNG people lose billions to corruption

Australia complicit as PNG people lose billions to corruption

Eoin Blackwell | AAP

As much as half of Papua New Guinea’s A$3.5 billion development budget over three years has been lost to graft or dodgy overseas investments, the head of the Pacific nation’s government anti-corruption task force says.

Task Force Sweep (TFS) chairman Sam Koim says Australian financial institutions have been complicit by turning a blind eye to dirty monies being redirected to Australian connections.

A TFS analysis of PNG’s 7.6 billion kina development budget from 2009 through 2011 shows almost half was lost to corrupt practices by public officials and government departments.

“We have uncovered a lot of instances where there was no recourse to budget and people were spending money left, right and centre, squandering funds and using them for private purposes,” Mr Koim told AAP on Monday.

“Given the trend of corruption and seeing that there is nothing on the ground level to show for the expenditure of public funds, we have reason to believe that at least half of the budget we were investigating was wasted, mismanaged or stolen.

“Government systems and control mechanisms have, over time, been corroded. It is safe to say (the money) has been stolen.”

Despite being often described as “an island of gold on a sea of oil” because of its abundant natural resources, the nation of seven million has heavily degraded infrastructure, poor health services and a severe lack of access to education.

Mr Koim, who has previously described Australia as PNG’s Cayman Islands because of to the amount of money invested there, denied local media reports claiming most of the stolen funds had been invested in Australia alone.

However, he said Australian financial institutions had turned a blind eye to transactions and investments from high-profile PNG public servants and politicians on Australian shores.

“The banks think their responsibility ends once they … send a transaction report,” he said.

“PNG is a high-risk country. Instead of just sending a report and accepting this transaction, they should go further and say we are not going to accept this money … they have been complacent in allowing those monies to enter the financial system in Australia.”

At a presentation in Sydney last week, Mr Koim told the Australian Transaction Reports and Analysis Centre (AUSTRAC) that six PNG politicians had invested heavily in property in Cairns, and he intimated that the money invested far outweighed their salaries.

Declining AAP’s request to name the politicians, who are the subject of the “intelligence gathering” stage of an investigation, in conjunction with Australian agencies such as the Australian Federal Police, Mr Koim told AUSTRAC the funds amounted to A$11.5 million in property deals in Cairns and northern Australia.

The property deals are divided into tranches of A$3.8m, A$1.9m, A$2.3m, A$2.3m, A$2m and A$1.45m, he said.

“They have bought property and other assets, put money in bank accounts and gambled heavily in your casinos and have never been troubled by having their ill-gotten gains taken off them,” Mr Koim told the conference on Thursday.

“Unless the money can be prevented from leaving our country or prevented from entering Australia, the bad guys win and the rest of Papua New Guinea suffers.”

  1. skohli
    October 9, 2012 at 11:09 am

    Poor little rich boy. Oh when will this stop!

  2. smallia
    October 9, 2012 at 11:31 am

    Let the law deal with this selfish money laundering bastards. They have to be put behind bars!! We need to cure this disease that is infecting our society once and for all. GOD bless PNG.

  3. October 9, 2012 at 11:49 am

    Can we invite the Australian government and banks not to accept these highly risk people before they come and corrupt Australia. Infact they are very corrupt people and mind you once AUSSIE becomes their home, they’ll use their money to do illegal and corrupt business. I am more happy to see how they’ll gradually grow roots in Australia to advance their evils habits there in Aussie. Its not too far and its not hard. Please Austarlia send these guys back or lock them behind bars for money laundering. Pes from New Zealand

  4. feekay
    October 11, 2012 at 7:36 am

    Let’s also be fair. In this debate and commentary we should not tarnish those PNGns that have invested or are seeking to invest their own money in Australia and elsewhere with the same brush as those using ill-gotten resouces to profiteer abroad. This differentiation should be made, because there are PNG individuals and families that look for opportunities to own a home at prices they can afford for their own use. They may be far an in between but not everyone seeks opportunities and ventures outside is a corrupt scoundrel like some of our bureacrats and politicians that are corrupt and out and out scoundrels. The flight of money is a modern phenomenon – PNG authorities need to get their act together in corroboration with oversight authorities and agencies in Australia especially. Just harping about it in meetings and conferences abroad will not amount to much in terms of direct actions against the culprits. AND if there is no political will to do anything, there is little chance it’ll be contained. When people know that they will get away with manipulation, thievery and corruption they will always believe that corruption can pay handsome dividends.

  5. feekay
    October 11, 2012 at 10:20 am

    Australia has privacy laws that are stringently enforced in the private and public sectors and coalesces the lives of most people engaging in business or transaction of one form or another. In addition, and complimentary, to these privacy statutes, the Banks also enforce their own secrecy practices in a very ardent and consistent manner. AND, let’s not forget that transactions of any sort, be it in banking generally or investing stolen money in particular, or concerning matters to do with civil/criminal investigations that our Png oversight bodies wish to pursue in Austrlia, are outside our jurisdiction. SO it is not as easy as it sounds or as we would think. As they say, oftentimes the law is an ass and oftentimes works on the side of the dubious and opaque buggers. It’s universal, is it not?

    The key to addressing, unraveling and acting on the edict and edification delivered and served by Mr Koim to Australians in Australia about the goings-in by PNG leaders etc rests utterly and squarely on the laps of Peter O’Neill and his Government – as it also always did in previous Governments led by MT Somare, Sir J, Paias Wingti, Sir Mek, Sir Rabbie, the late Skate and all the parliamentarians, past and present. Two of the former PMs are serving politicians in O’Neill’s Government today. This is who holds the keys to enacting clear, precise, effective and cross-jurisdictional enforceable legislation to address the rort and stem the tide of flight of money from PNG to Australia. It has to be discussed and done in cohorts with their counterparts in Canberra.

    Do we think that those benefitting from corrupt practices will ever have the heart, will and desire to do something??? Ever??? Ating hemi fault na rong blong Adam na Eva, laga??

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