SYDNEY - A major falling out between the owners of Manus Island contractor Paladin is threatening to expose the Home Affairs Department to a fresh round of scrutiny over the integrity and performance of the $532 million (K1.2 billion) refugee contract.
Ian Stewart, who resigned as a Paladin Group director in July last year, broke ranks on Tuesday and said he was willing to front a Senate inquiry into the firm’s practices in Papua New Guinea and how it ran the controversial contract.
Any public appearance by Mr Stewart is likely to embarrass the Department of Home Affairs and its secretary Mike Pezzullo, who has consistently defended his department's decision to award Paladin the contract.
Australia’s auditor-general Grant Hehir is expected to hand down his report in April, after spending the last 12 months assessing whether Home Affairs had appropriately managed the letting of contracts at immigration processing centres.
The Australian Financial Review has had a long-running investigation into Paladin, revealing late last year the company was fined more than 3,700 times in one year for failing to meet minimum service standards.
It was also revealed Home Affairs inspectors were too scared to visit Manus Island and did not conduct inspections for 15 months because of safety concerns.
Other documents showed Paladin executives asking Home Affairs if it should "help out" in the payment of "unforeseen bribes" and "corrupt levels of fees" during negotiations.
The security firm raised the issue in a letter dated September 6, 2017, that was released to the Senate last August among more than 2,700 pages of documents.
Home Affairs later said Paladin's query was "dealt with in negotiations" and the contract included a requirement the firm "comply with anti-corruption laws".
Mr Stewart told The Age and The Sydney Morning Herald he wished to give evidence about alleged corrupt conduct by senior Papua New Guinea politicians and what Australian officials knew about it.
He also indicated a willingness to testify about Paladin's business affairs and how it delivered services on behalf of the Australian government to refugees on Manus Island.
Mr Stewart has severed ties with other entities in the group, resigning from Paladin's Australian-registered company in February and its PNG-based entity, Paladin Solutions, last November.
In its initial articles, the Financial Review revealed Paladin was being paid more than $20 million a month by the federal government, while refugees on Manus complained about poor services and the lack of amenities.