AUSAID, PARAKA AND WARTOTO EXPOSED BY TODAY TONIGHT
YAHOO 7
Australian
aid is being lost to corruption, with an estimated $1.7 million being stolen
from Papua New Guinea's (PNG) budget annually.
The
stolen money is then brought to Australia to be hidden in our banks and the
Queensland property market.
Around 59
people have already been charged with corruption offences in PNG, and it is
alleged much of their illegally obtained money is spent in Cairns.
Professor
Jason Sharman, deputy director of the Centre for Governance and Public Policy
at Griffith University, is a renowned expert on money laundering.
Professor
Sharman along with Sam Koim, head of PNG's Anti-Corruption Task Force, are on a
mission to lift the lid on billions of dollars of dirty money leaving PNG to be
laundered in Australia.
"Corrupt
politicians, and senior officials are buying houses and gambling. Obviously
they need bank accounts to do so, and setting their families up here (in
Australia) as well," Professor Sharman said.
"Most
of Australia's aid program is effectively wasted."
Mr Koim
says they have a number of prominent politicians and businessmen on their
radar.
"Almost
half of the budget (is being stolen. That is how big the problem is," Mr
Koim said.
"They
see Australia as the Cayman Islands. They see that it is the safest place where
they can bring their stolen money from PNG."
There are
more than 100 homes in Cairns that belong to Papua New Guineans, a similar
number in Brisbane. They inhabit some of the nicest suburbs, and include the
prominent PNG politicians and officials.
One such
home in Cairns, valued at $585,000, belongs to PNG's petroleum/energy minister
William Duma.
Australia's
banks have a strong presence in PNG, and Mr Koim says the banks are well aware
of the corruption.
"The
writing is on the wall. There is some clear evidence of suspicious
transactions, but they (the banks) turned a blind eye and accepted those
transactions," Mr Koim said.
Mr Koim
and his task force informed Australia's money laundering agency Astrac, the
Australian Federal Police (AFP) and the Attorney General's department in August
last year that Paul Paraka - a lawyer who allegedly sent $2.5 million dollars
to his family - was a person of interest in their investigation into
corruption.
However
Mr Paraka was still able to transfer hundreds of thousands of dollars to his
wives and girlfriends through the NAB.
In a
statement the NAB claim to take money laundering seriously. They admitted that
following an investigation in late 2012 that: "...some customer's accounts
were closed and some payments originating from PNG were declined..."
Professor
Sharman says few Australians realise how serious PNG's corruption problem is
for Australia. He says for every dirty dollar we harbour, PNG is one step close
to ruin, with huge consequences.
"If
you give $10 million to a hospital and that money comes in as aid through the
front door, and at the same time, $10 million is stolen out the back door
through a corrupt official, then the net benefit of Australian aid is
zero," Professor Sharman said.
"If
half the budget is stolen, there is a real risk that PNG as a country will
simply collapse. One of the things associated with state failure is massive
refugee flow. If you were looking to escape PNG, the closest country is
Australia.
"So
rather than PNG being a refugee solution, it will become a massive refugee
problem."
Response
from AFP Assistant Commissioner Serious and Organised Crime, Ramzi Jabbour:
• On 23
May 2013, the AFP Senior Liaison Officer (SLO) in Port Moresby addressed a
Royal Papua New Guinea Constabulary (RPNGC) Provincial Police Commanders Conference
in Lae, PNG. The comments made were general in nature and related to
unconfirmed sources of information.
• I can confirm the AFP does not have evidence of corruption involving PNG public officials.
• I can confirm the AFP does not have evidence of corruption involving PNG public officials.
•
Australian authorities are committed to ensuring that Australia is not a safe
haven for the proceeds of crime.
Statement
from NAB (National Bank of Australia):
National
Australia Bank takes all allegations of money laundering seriously. Payments
NAB deems as suspicious will be blocked and reported, as required by law.
In late
2012, NAB launched a thorough investigation regarding some funds transfers from
Papua New Guinea, based on information provided by the Australian Federal
Police and other law enforcement agencies in both Australia and PNG.
Following
NAB's investigation, some customers' accounts were closed and some payments
originating from PNG were declined.
Response
from ANZ bank:
• We cannot discuss any individual customers due to privacy obligations.
• However, as part of its global compliance program, ANZ has undertaken an extensive review of all politically exposed people and taken steps to exit relationships with individuals considered to be 'high risk'.
• We also continually monitor client activity, report suspicious matters to regulators such as AUSTRAC, and our professionalism has recently been recognised by the Australian Federal Police as "being a major disruption tactic to combat corruption in Papua New Guinea".
• We take our anti-money laundering responsibilities seriously and according to this recent correspondence from the Australian Federal Police, ANZ has been instrumental in "countering the collective effort to combat corruption" within PNG.
• We are continuing to strengthen our anti-money laundering procedures. For example, ANZ has set aside $75 million to strengthen our financial crime detection capability this year, including around $25 million on anti-money laundering programs.
• We cannot discuss any individual customers due to privacy obligations.
• However, as part of its global compliance program, ANZ has undertaken an extensive review of all politically exposed people and taken steps to exit relationships with individuals considered to be 'high risk'.
• We also continually monitor client activity, report suspicious matters to regulators such as AUSTRAC, and our professionalism has recently been recognised by the Australian Federal Police as "being a major disruption tactic to combat corruption in Papua New Guinea".
• We take our anti-money laundering responsibilities seriously and according to this recent correspondence from the Australian Federal Police, ANZ has been instrumental in "countering the collective effort to combat corruption" within PNG.
• We are continuing to strengthen our anti-money laundering procedures. For example, ANZ has set aside $75 million to strengthen our financial crime detection capability this year, including around $25 million on anti-money laundering programs.
• All of
ANZ's 47,000 staff are required to complete annual training to make sure they
are able to spot and report suspicious activity. Any staff that do not complete
this training are disciplined which could include termination of employment.
Response
from Attorney General's department, spokesperson Mark Dreyfus:
I'm writing to you with regard to
the Head of Papua New Guinea's anti corruption taskforce Sam Koim's Aug 2012
speech, in which he accused Australia of being the Cayman Islands of the
Pacific with respect to money laundering.
He alleges our Government is turning a blind eye to large scale money laundering through property purchasing and casino use (among others), of sums up to hundreds of millions each year. He stated that the banking industry of Australia is doing large scale business with "dirty money".
We are doing a story relating to these allegations.
The Australian Government rejects these assertions. Australia has a robust framework to deter and detect money laundering, and to ensure that Australia is not a safe haven for the proceeds of corruption. Banks and other regulated businesses are required to have appropriate controls to counter the money-laundering risk posed by corrupt foreign officials and politicians.
Consistent with its commitment to tackle corruption domestically and overseas, the Australian Government supports the work of the Government in Papua New Guinea (PNG) to address corruption and stands ready to continue providing assistance to strengthen PNG's capacity to combat corruption.
Australia’s law enforcement agencies work closely and cooperatively with PNG authorities on a range of complex issues relating to anti-corruption.
For example, in May 2013 the Australian Government announced Phase Three of the Australia-PNG Policing Partnership for increased policing support. Foreign Minister Bob Carr has discussed with Foreign Minister Rimbin Pato plans for further strengthening this cooperation by building PNG police capacity and supporting PNG's Fraud and Anti-Corruption Directorate.
Australia also provides ongoing training and mentoring on anti money laundering and proceeds of crime to PNG law and justice officials. This includes work with the Proceeds of Crime Unit and PNG prosecutors to increase capacity to pursue the proceeds of corruption under PNG law, providing case-specific mentoring on PNG proceeds of crime matters, and working with PNG Department of Justice to jointly review the PNG Proceeds of Crime Act to strengthen PNG’s capacity to detect and recover proceeds of crime.
With regard to the Attorney-General’s Departmental regime to fight money laundering, we wish to discuss what measures the Department is currently taking including your involvement with the Financial Action Task Force and AUSTRAC.
• The Australian anti-money laundering and counter-terrorism financing (AML/CTF) regime predominantly operates at the point at which money enters the financial system.
• Under the AML/CTF regime, financial institutions have an obligation to assess the money-laundering risks when they engage with professionals such as real estate agents.
o Based on the risks, financial institutions may choose not to conduct the transaction, or may be required to report information about the transaction to AUSTRAC.
• AUSTRAC assists reporting entities understand their obligations by various means, including awareness-raising forums such as the Major Reporters Forum at which Mr Koim made his presentation. Raising awareness among reporting entities assists in improving the quality and quantity of transaction reports submitted to AUSTRAC.
• Reports from financial institutions are gathered and analysed by AUSTRAC, producing financial intelligence which can be shared with law enforcement and other government agencies to assist them to identify illegal activity and take action.
• Legislation is in place for the AFP to receive and assess referrals from foreign governments in regards to these types of allegations. The Commonwealth Proceeds of Crime Act 2002 provides a comprehensive scheme to trace, investigate, restrain and confiscate criminal proceeds. The Act can apply to ‘foreign indictable offences' if a benefit from such an offence is derived in Australia or transferred to Australia. The Commonwealth can also repatriate funds that are recovered from the registration of foreign proceeds of crime orders.
• The Attorney-General’s Department provides ongoing training and mentoring on anti-money laundering and proceeds of crime to Papua New Guinea.
Given Australia's recent billion dollar aid assurance to Papua New Guinea, what measures is the Department taking to ensure it is not stolen and laundered?
• Australian aid is not routinely provided directly to foreign governments.
He alleges our Government is turning a blind eye to large scale money laundering through property purchasing and casino use (among others), of sums up to hundreds of millions each year. He stated that the banking industry of Australia is doing large scale business with "dirty money".
We are doing a story relating to these allegations.
The Australian Government rejects these assertions. Australia has a robust framework to deter and detect money laundering, and to ensure that Australia is not a safe haven for the proceeds of corruption. Banks and other regulated businesses are required to have appropriate controls to counter the money-laundering risk posed by corrupt foreign officials and politicians.
Consistent with its commitment to tackle corruption domestically and overseas, the Australian Government supports the work of the Government in Papua New Guinea (PNG) to address corruption and stands ready to continue providing assistance to strengthen PNG's capacity to combat corruption.
Australia’s law enforcement agencies work closely and cooperatively with PNG authorities on a range of complex issues relating to anti-corruption.
For example, in May 2013 the Australian Government announced Phase Three of the Australia-PNG Policing Partnership for increased policing support. Foreign Minister Bob Carr has discussed with Foreign Minister Rimbin Pato plans for further strengthening this cooperation by building PNG police capacity and supporting PNG's Fraud and Anti-Corruption Directorate.
Australia also provides ongoing training and mentoring on anti money laundering and proceeds of crime to PNG law and justice officials. This includes work with the Proceeds of Crime Unit and PNG prosecutors to increase capacity to pursue the proceeds of corruption under PNG law, providing case-specific mentoring on PNG proceeds of crime matters, and working with PNG Department of Justice to jointly review the PNG Proceeds of Crime Act to strengthen PNG’s capacity to detect and recover proceeds of crime.
With regard to the Attorney-General’s Departmental regime to fight money laundering, we wish to discuss what measures the Department is currently taking including your involvement with the Financial Action Task Force and AUSTRAC.
• The Australian anti-money laundering and counter-terrorism financing (AML/CTF) regime predominantly operates at the point at which money enters the financial system.
• Under the AML/CTF regime, financial institutions have an obligation to assess the money-laundering risks when they engage with professionals such as real estate agents.
o Based on the risks, financial institutions may choose not to conduct the transaction, or may be required to report information about the transaction to AUSTRAC.
• AUSTRAC assists reporting entities understand their obligations by various means, including awareness-raising forums such as the Major Reporters Forum at which Mr Koim made his presentation. Raising awareness among reporting entities assists in improving the quality and quantity of transaction reports submitted to AUSTRAC.
• Reports from financial institutions are gathered and analysed by AUSTRAC, producing financial intelligence which can be shared with law enforcement and other government agencies to assist them to identify illegal activity and take action.
• Legislation is in place for the AFP to receive and assess referrals from foreign governments in regards to these types of allegations. The Commonwealth Proceeds of Crime Act 2002 provides a comprehensive scheme to trace, investigate, restrain and confiscate criminal proceeds. The Act can apply to ‘foreign indictable offences' if a benefit from such an offence is derived in Australia or transferred to Australia. The Commonwealth can also repatriate funds that are recovered from the registration of foreign proceeds of crime orders.
• The Attorney-General’s Department provides ongoing training and mentoring on anti-money laundering and proceeds of crime to Papua New Guinea.
Given Australia's recent billion dollar aid assurance to Papua New Guinea, what measures is the Department taking to ensure it is not stolen and laundered?
• Australian aid is not routinely provided directly to foreign governments.
• AusAID
has world-class anti-fraud measures in relation to our aid spending. Aid
funding is provided to international organisations such as the UN, the World
Food Programme and the like for projects in recipient countries. These
organisations have excellent, internationally recognised anti-fraud measures.
Statement
from AUSTRAC:
Measures
in place to prevent the laundering of stolen funds through Australia
Australia's
AML/CTF regime includes a range of measures to address and mitigate the risk of
overseas entities (including individuals) misusing the Australian financial system.
Australia's regime is based on international Financial Action Task Force (FATF)
standards.
Customer
identification requirements
Australia's
AML/CTF laws require reporting entities (including banks and casinos) to have
in place customer identification procedures appropriate to their particular
business. These procedures are designed to identify overseas customers who may
pose an increased money laundering risk and to report any suspicious
transactions undertaken by customers.
Financial
transaction and suspicious matter reporting requirements
AUSTRAC's
reporting entities are required to report certain threshold cash transactions,
as well as international funds transfers and suspicious matters.
Reporting entities are required
to report to AUSTRAC suspicious matters if the entity has reasonable grounds to
suspect that a transaction may be related to money laundering or any other
offence under a Commonwealth, state or territory law.
AUSTRAC
is not an investigatory or law enforcement body. Where AUSTRAC receives reports
relating to possible instances of illegal activity, AUSTRAC refers that
information to its relevant partner agencies, such as law enforcement agencies