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Journalists expose how corrupt cash gets to Australia from PNG

Fairfax Media | Extracts

AUSTRALIA has been exposed as a safe haven for corrupt funds from overseas after a pair of top lawyers were caught on video explaining how regional leaders steal money from their own people and park it in bank accounts here.

Fairfax Media has obtained recordings of an undercover sting that show one Papua New Guinea lawyer, Harvey Maladina (pictured), explaining how a "prestigious" law firm and a well-known Queen's Counsel issue inflated invoices to conceal the movements of corrupt money.

And his law firm partner, former Queensland crown prosecutor Greg Sheppard, is shown on camera saying that the "only way" to bribe foreign politicians and avoid getting caught is to pay "small dribs and drabs" disguised as commercial transactions.

Both Mr Sheppard and Mr Maladina are considered to be close to PNG prime minister Peter O'Neill and senior ministers and advisers, upon whom Canberra relies heavily for providing the Manus Island immigration detention centre.

Mr Sheppard was appointed in 2014 as a "resident" director of the company that provides security to the centre, but resigned in January.

But covertly-filmed footage using operatives posing as Australian businessmen opens an unprecedented window into how Australian lawyers, accountants and migration agents enable corrupt politicians to undermine their impoverished home countries and shift billions of dollars into the relative safety of Australian bank accounts and real estate.

The footage filmed by anti-corruption NGO Global Witness exposes deep complacency among Australian politicians and enforcement agencies, as well as large holes in Australia's regulatory regime.

The PNG sting operation shows Australian lawyers coaching prospective clients on how to move suspect funds without attracting police attention.

"It would have to be something that didn't raise suspicion, something that was ostensibly commercial," says Mr Sheppard, to the under-cover operative.

"The days of banging a million bucks into this secret numbered account in Singapore is over," he says.

Mr Sheppard acts for "prominent clients in Papua New Guinea, including Prime Ministers, Ministers of State and businessmen", according to his website. His clients include senior figures in the government of Mr O'Neill, who is considered an ally of Canberra, and has been implicated in several huge financial scandals.

Read the full story here



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Nicholas Powrie

What a pity many of these comments simply echo the mentality that permits corruption in PNG.

I would have liked to have read more comments along the line that "The AFP and the Australian Foreign Minister, Julie Bishop, have a duty to investigate and prosecute each and every allegation of corruption involving Australians in PNG".

But that's not what we hear.

Take Mathias Kins coment as an example "
So Australia pretends about its attempts at fighting corruption in PNG. It is a corrupt nation also. Its leaders are corrupt like PNG's leaders."

No they are not corrupt "like PNG's leaders" Mathias.

Part of the problem in PNG, a very significant part of the problem, is an institutionalised culture in which PNG citizens are encouraged to disparage Australia's efforts to do some thing about corruption and when Australia does try to do some thing we hear this wail of indignation about how Australia interferes with the democratic process of PNG.

What is the point of a democracy or independence when the nation is reliant on an external nation to maintain its national life support.

But ultimately the (uninterested) Australian Federal Police and successive foreign ministers are to blame for failing to put their foot down hard on corruption and letting this slide into the oblivion that PNG is heading for...........if its not already there.

Peter Kranz

Phil - those damn bikies get everywhere don't they? This conveniently combines the most hateful fantasies of the robots who write for the Herald Sun.

Bicycles, outlaw gangs, Muslims, illegal immigrants and porous borders. Andrew Bolt will be wetting himself!

Mind you the Japanese army did conquer the Malaysian peninsular on bikes. And they can be a fearful weapon!


I feel a new Carry On script in the offing.

Ed Brumby

Certainly as far back as the '70s, Phil - at least where illegal immigration was concerned. I took a few Port Moresby representative basketball teams to the annual Easter tournament in Townsville in 1972 where, it turns out, our star male centre lost his heart to a Palm Island woman.

Back in Moresby, the star male centre failed to make it to the next training session and we were told he'd taken the Daru-Thursday Island route (acquiring a new name gleaned from the TI cemetery on the way through) back to Townsville and Palm Island.

For all I know he's still there.

Phil Fitzpatrick

I've written about this smuggling route before Peter - even on PNG Attitude.

It's been common knowledge since at least the early 1980s.

I think I also mentioned people (mostly East Asian & Chinese) coming across from Merauke in West Papua on bicycles through to Morehead in PNG.

Lots of them have been employed on construction jobs, including the LNG project. Others have set up trade stores all over the place. They even get their stock from West Papua.

They haven't been going down through Torres Strait to Australia much - it is too easy to get a PNG passport by bribing officials and then travelling on visas to Australia where they disappear.

Travelling by open boat down through Torres Strait isn't exactly safe unless you island hop so you need lots of help on the way. The people who run the Mary Jane down and guns up are happy to provide this help however.

I reckon thousands of illegals (as opposed to asylum seekers) have travelled the route.

The big question is why have they only now been noticed - has ASIO et al been asleep at the wheel?

Peter Kranz

Well I bet you didn't know that Greg Sheppard is the manager of a pop group, Sheppard.

"To the naked eye Sheppard’s ascendance to the musical heights seems like an all-Australian family success story.

Yet unbeknownst to their fans, the band’s rise to fame and riches was built upon a pyre of broken dreams in far away Manus Island, where more than a thousand asylum seekers rot away behind razor wire in the sweltering Papua New Guinean sun.

There the people who have travelled halfway across the world in a leaky boat are closely guarded by security guards employed by a company named Wilson Protective Services PNG Limited (Wilson Security) who run the Manus Island detention center.

Greg Sheppard – manager of Sheppard, father of the 3 principal members, and chief financier of the band’s career – is a director of the company. The company must bear at least some responsibility for the alleged torture, abuse and rapes that have occurred – and continue to occur – on Manus Island.

The other 2 members of the trinity are Sheppard's fellow directors Gary Koch and John McMellan, executives of the Australian registered Wilson Security Pty Ltd, the company that sponsors a V8 Supercars motor racing team to the tune of about $5 million a year."


Peter Kranz

John - you have hit on something. It is indeed high farce. Do you remember those corny old British comedies, the 'Carry On' series of films? (Carry on Up the Khyber and Carry On Don't Lose your Head were two of the best).

I can imagine a new one - Carry On Down the Fly.

I think Greg Sheppard is relying on the Kenneth Williams defence.

"Infamy! Infamy! They've all got it in for me!"

Peter Kranz

Barbara asks 'what will happen next?'

Maybe this -

"New Smuggling Route Discovered From Papua New Guinea To Australia

Amid all the accusations of indulging in the act of bribery to turn back the boatload of asylum seekers, Australia has a new issue to worry about. According to the police of Papua New Guinea (PNG), people smugglers are helping asylum seekers to get to Australia via new routes from PNG.

ABC reported that three men were taken into the custody because they were making an attempt to get a boat to the country travelling from PNG along the south-west coastline. PNG police said that Daru a town in PNG has become a hotspot for people involved in drug peddling and smuggling of guns. They announced that the reason behind the rise of such crimes could be the “proximity to Australia.”


There have been rumours for years about the smuggling of guns and drugs between PNG and Australia. And this couldn't be occurring without a few palms being greased along the way.

I had a friend some years ago in Sydney who claimed he was forced to live under a witness protection program as his clandestine work had uncovered high-level involvement in the trade and his life was under threat.

Maybe fanciful, maybe not.

John Kaupa Kamasua

There is a comical side to this. I think Greg and Harvey were high on something they took just before they recorded the interviews.

Of course they were unaware of the secret recordings, but you can't spill your guts to a total stranger. Even if what they said was not true or was not intended to be painted in that light.

The PNG Law Society is very concerned and has called for investigations into the saga and for both men to clear their name through formal process.

They need to account for what they said and clear their names.

Look at the damage they are going to do and the others who will be dragged into the picture.

What about the integrity of the law profession which both swore an oath to protect.

A thorough investigation needs to be instituted. And both of them need to account for and answer for what they said.

This must not be another "this only happens in PNG" and then swept under the carpet.

John Kaupa Kamasua

Yes Paul, the admin system then appeared to work, and was seen to be working because of many of the reasons and factors you state here.

Now justice is denied, rights abused, the systems in place to serve everyone are distorted and hijacked for parochial and ethnocentric reasons, there is total ignorance among many of those in places of power and influence to make it a bit more bearable for the masses. The list can be very long!

Many right thinking Papua New Guineans, and people who have a concern not only for themselves but for the country, need to wake up. Wake up to the fact that we can't be just be happy that our economy is doing well.

And do not blame this government, the last government or the government before that. The rot was building up even earlier.

Paul Oates

Phil, putting aside your 'stirring the pot' comments about the Anzac spirit etc. I suggest the essence of pre 1975 administration was responsibility and accountability. There were a number of checks and balances in place and operating.

Financial returns from each station were checked and had to be balanced. ADC's would be responsible for ensuring the Patrol Post and Base Camp returns were completed correctly. Senior officers were held responsible if junior officers had problems in accountability.

When I first arrived in PNG, every year there seemed to be a visit from the auditors. Local government books were audited by the LG Branch and visits made each year to make sure the accounts were properly maintained.

If there were mistakes made in the legal area, there was an unofficial appeal system that went up through the various levels right up to the DDC and the DC. I can remember one or two decisions being challenged and reviewed after the issue was raised by the local people who thought it needed a second opinion. Copies of all court records were sent to the Regional HQ and reviewed.

The system wasn't perfect but it worked and no one came up with a better model at the time that actually worked, given in what is in today's terms, an almost total lack of resources.

Small outstations also depended on the loyalty and integrity of local staff and police. Without the support of the RPNGC personnel in the bush, we could not have made the system work.

The essence of how the system worked was primarily one of fairness and perceived impartiality. There was also a degree of transparency. Dare I say, there was also one other attribute that should be mentioned and that was trust. While there were occasions where mistakes were made, I believe the local people trusted the system to deliver what benefits it did while mostly not actively interfering with their daily lives.

Those important factors appear to be in short supply in some cases these days if one accepts today's media reports.

Bernard Singu Yegiora

Many people in PNG are of the opinion that Australia is less corrupt and things work in a more ethical or moral way, whichever.

That is why Australia is helping PNG to fight corruption. Such a report has really tainted the image of Australia as being less corrupt. So Australia needs to clean its own backyard.

Phil Fitzpatrick

That's a very interesting point about the kiaps prior to 1975 Paul. I can't recall even one incident involving a corrupt kiap.

There were a few bad eggs for other reasons, stupidity, laziness, sexual excess, violence etc. but they were generally quickly dealt with and fired or hounded out of the service.

I wonder what made them so upright and honest - maybe it was the ANZAC spirit and the quasi-military atmosphere that I've been criticising of late.

Maybe Somare was so deadest against them because he knew they would queer his ambitions.

If the surviving kiaps didn't keep taking umbrage at anyone criticising them (with good cause given their past experience with academics) it might be possible to distil whatever it was and administer it to the present crop of crooks - both in PNG and Australia.

John Kaupa Kamasua

Two lawyers have made some very damaging and explicit statements.

Does that amount to some form of concrete evidence, as lawyers would have said.

Evidence! Evidence! Evidence! Maybe not.....

Now they are scurrying to the media trying to cover any holes that their actions may have created.

In short they are denying. Both dailies have their story.

I want to know if they were on drugs or hallucinating, when they told their stories.

Imagine how many people will be implicated or reputations damaged, and business opportunities affected because of two very silly, and should I say silly lawyers!

Mike Moro

POnel is the smartest PM ever to reign on the Game of Thrones. He will not be challenged or changed unless he loses his seat.

That is why he will do anything to stay in power, even if it means changing the police commissioner, amending the constitution or whatever.

Good luck NGO Global Witness, what you have uncovered is just a tip of the mumu.

Michael Dom

Is corruption in political leaders really the problem or is it our perception of political leaders that needs a rethink?

Pngians seem to go about believing that their political leaders are God's answer to their prayers, the very Prophet Moses himself returned to earth to lead us into 'the land of milk and honey'.

Others try to play the good citizen giving our leaders a fair go to the utter extreme, but the cost of the fair go they have had so far was recently revealed by Minister Charles Abel to be K150 billion or AU$70 billion.

And yet others try to approach the issue of corrupt political leadership with reason and academic aloofness, weighing the arguments and rationalizing the causes and effects, but they remain emasculated champions for the ordinary people who remain ignorant of government services and the benefits of a modern PNG, while paying the price through their environment and resources for its existence.

No our political leaders are not God's answer and they're not Moses. They're human like you and me.

Don't expect them not to be stealing money if that is the way you treat them.

And don't offer them reasons and excuses for their behaviour - they can obviously do that very well on their own - they've already fooled us for the last 40 years.

Paul Oates

You've pinged an obvious explanation Phil. As the Roman Virgil said 2,000 years ago, 'Who will watch the Watchers?"

The problem really starts with the concept of setting a green and red benchmark for what is right and what is wrong. Laws and legislation are only effective when they are applied consistently and fairly.

The biggest problem in today's modern societies is the blurring between government and business. In business, it is permissible (within reason) to provide 'incentives' and gifts of goodwill. When only the payer's money is involved, what does that matter?

When someone who has responsibility for making an impartial decision using other people's money or affecting potential profit or earnings is influenced in making a business decision by receiving in secret, incentives, money or influence that is not shared by those whose money is involved, clearly that is malpractice.

The situation then gets far worse when the decisions made by the public service and government are then influenced by secret commissions, incentives and covert influence. The use of taxpayers money and public finances to influence a decision in a covert manner without public scrutiny then escalates the problem of official corruption right up the line.

Public servants are or should be just that; Those paid to do a public service. There salaries are supposed to be sufficient for them to carry out their duties 'without' any incentive payments and secret commissions.

But where do you start? Does the office stationary cabinet suddenly get empty around the start of the school term? Are some public servants being paid for the time they don't turn up for work or don't fill out their time sheets honestly? etc. etc.

That was the problem when Kiaps were in control prior to 1975. Sure there were exceptions but by in large, the law was applied fairly, firmly and this was the key, seen to be applied impartially.

Will we ever see that situation occur again? Is it any wonder that those who see the opportunity to enrich themselves without earning it honestly and transparently can't wait to get rid of this type of impediment or at best, attempt to manipulate the decision makers? and... once you accept the bribe or take the dishonest money, you're gone big time...

Mathias Kin

So Australia pretends about its attempts at fighting corruption in PNG. It is a corrupt nation also. Its leaders are corrupt like PNG's leaders.

Barbara Short

Bernard, corruption takes place in Australia. People in business are not going to worry about corrupt money buying their goods and services.

Australians just love money. If someone comes along with piles of money to buy things, houses, bottles of the best wine, farms, factories etc etc that is great. We are happy to have their money. It doesn't matter where it came from. That is the worry of the police back in their home country. At the moment the rich Chinese are buying up the most expensive houses in Sydney. They are very rich people - communists who got away with it! Ha!

There are many corrupt things going on in Australia. The big companies often don't pay any tax as they have ways to look as though they didn't make any profit. And you only pay tax on profit.

There have been lots of dodgy deals going on with the government but many have been exposed by the ICAC so maybe they will slow down.

Many make fortunes from making and illegally selling drugs. People like Alan Bond worked in with dodgy lawyers to make millions and ripped off many investors. Some of the banks have been ripping off investors. They pay their bosses huge salaries and have no shame when they are exposed for their corrupt ways.

I could go on and on. But there are many people who are not corrupt and who lead a good honest life and look after their money well. They don't buy on credit, except large items like a house. They save up for what they want. They are thrifty and work hard for their income and live within their income level and are happy.

Sadly this sting shows you that there are people in/from Australia who think it is OK to help PNG ministers and others take stolen government money from PNG and use it to invest in Australia.

It also appears that the Australian government is turning a blind eye as it wants to keep on the good side of PNG leaders due to the Manus issue.

I wonder what will happen next!

Phil Fitzpatrick

I assume that's a rhetorical question Bernard but in case it isn't we have ample evidence that Australia is just as corrupt as PNG. The crooks down here are just better at hiding it.

Depending upon how you define it, Tony Abbott is corrupt and so is Bill Shorten.

And Paul, it just might be that the people responsible for policing corruption are corrupt themselves?

Bernard Singu Yegiora

Does that mean Australia is corrupt as well?

Paul Oates

Whatever you're on Lindsay you should cut down mate.

Now can someone please explain why this has been allowed to go on for so long without any reaction or just action by those who are supposed to be responsible for stopping this from happening?

The silence from official channels and authorities is positively deafening. So is it a lack of competency or a surplus of incompetency? Are they merely collecting more evidence but if so, how much more do they need?

Hello... Is there anyone listening?

 Lindsay F Bond

Of squall and squalor

Nautical fetch, floats a boat sketch
with winds abaft and ample draft
long before luff, seas calm enough

fine whether slack, less yearn of tack
crew scant aware of cause to wear
heed no jibe shout, cruise on about

boast of reaches, foreign beaches
e’en shore abeam, meet regime gleam
exchequer coined, game lots well poised

yet word now wrought from haven port
bared naughtiness, upwind fresh mess
stealth sales coarse rake, concealing take

prevalent stake, vassal froths wake
…laurabada shifts alert drift
…law-abider sifts ailing rift

squalid season’s lax of reason
header blow low, sterner eyes know
law’s pensive bent, regaled intent

crudeness scuppers crews e’en skippers
all lows of notions not fit nations
flagging end nigh flouts of ensign.

Ron Kone

When my eyes caught that surname in the 8th line of this article, my mind immediately switched to NPF and PM (as NPF is synonymous to that name). I couldn't believe my ears how Harvey was boasting of Jim in the shot clip. Can this be used against Poneill (or yet another investigation)?

Jeff Febi


Thanks to NGO Global Witness.

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