Federal ministers had plenty of trouble on their minds when their officials agreed to buy land from a billionaire family to clear the way for a new airport in western Sydney.
One thing they were not thinking of, unfortunately, was the $29.8 million purchase price – more than 10 times the land value.
Now the scandal over that money makes ministers look like dunderheads and the officials look like fools. Or knaves. If the explanation is not incompetence, it is corruption.
The deal was signed on Tuesday, July 31, 2018. The ministerial wing of Parliament House was clearly busy with other things. Voters had turned their backs on Malcolm Turnbull in the "Super Saturday" byelections a few days earlier.
There is more at stake than the western Sydney land deal. The federal government is about to release a budget with another surge in spending on major projects. Taxpayer money is being put at risk on highways, railways and airports.
In Victoria, that means a payday for landholders near the construction sites of the future, like the Tullamarine airport link or the high-speed rail to Geelong. If the problems in the new audit are not fixed, they can easily be repeated. This is a national problem.
The minister in charge of the land deal, Paul Fletcher, is claiming ignorance. Did he see the brief that disclosed the purchase price? "I did not," he told the ABC on Wednesday. It is a poor excuse for voters who expect their leaders to safeguard taxpayer cash.
It is also mystifying. Fletcher is one of the most careful and cautious ministers in the government. If there is fine print to be checked before a claim is made or a deal is signed, Fletcher will read it twice.
He's the bass player of the government band: essential to the rhythm, comfortable at the back of the stage, happy to let the singer and lead guitarist grab the limelight.
Fletcher was urban infrastructure minister when the deal was struck. He had spent two years trying to get the Western Sydney Airport built, mainly by staring down Sydney Airport and deciding, with Turnbull, that the government would build the project.
The cabinet minister with responsibility for infrastructure was (and is) Michael McCormack, the Nationals leader and Deputy Prime Minister.
What happened on their watch was a transfer of taxpayer funds to a wealthy political donor at a hugely inflated price. It stinks. The Auditor-General called some of the behaviour unethical. There are at least six reasons why.
First, the department began work in 2016 on a strategy to buy the land from the Leppington Pastoral Company, which is owned by Tony and Ron Perich, the sons of a Croatian immigrant who started farming the land in the 1950s.
The brothers are worth about $2 billion and have donated about $148,000 to the Liberals and Nationals since 2003. They have donated $27,800 to Labor, but nothing since 2006. Even though there is no suggestion in the report that their history of donations contributed to the land purchase, it is a bad look.
Next, the officials in the Western Sydney Unit of the department ran 10 briefings with their bosses. Only three included the minister, and the last of these was in October 2016. The seven briefings after this kept senior public servants ignorant of key facts.
Third, the officials changed their approach in November 2017 to a "less complex" purchase by agreement, rather than compulsory acquisition. This was good for the landowners and bad for taxpayers, but it was never seen by the minister. In fact, there is no record to show anyone at the top approved the change.
Fourth, the officials chose the most expensive valuation as their purchase price. They used a "drive by" estimate in July 2017 by valuers who were not allowed on the land but decided it was worth $2.35 million per hectare.
Fifth, the Perich brothers negotiated to lease the land back after they had sold it. After all, the land is not needed for the airport until 2050, when a second runway might be built. On this deal, the officials chose a July 2018 estimate, by the same valuation company, that set a rock-bottom price of just $75,000 per hectare.
Finally, the transaction triggered an alarm when the Auditor-General checked the department's annual report last year. The department launched a review. Bizarrely, it asked the Western Sydney Unit to do it. Nobody from outside the unit took part, so the group that bought the land cleared itself.
This audit is like few others. While it is common for the Auditor-General to offer soft reprimands, this one goes harder. It identifies behaviour within the department that was "not ethical" and "omitted" key facts. It says the department was "not accurate" about its own conduct.
That means someone lied and someone hid the truth. It could also mean someone was corrupt.
A parliamentary inquiry is likely. Why was the minister not told of the key decisions? Why did the minister not make sure he was told? Why did top public servants leave the Western Sydney Unit to itself? Have all the conflicts of interest been disclosed?
It is about time Australia had a federal anti-corruption commission to answer these sorts of questions.
"If you had a body whose task was to uncover corruption in the broader sense, it would seize on all these events and would examine people to see why it was all those flaws occurred," says Anthony Whealy QC, a former NSW Supreme Court judge and now the chairman of the Centre for Public Integrity.
Conduct does not have to be criminal to be corruption. After reading the audit report, Whealy says the breach of ethics in this case suggests there could have been impropriety, or even corruption on the part of the department.
"You need a body whose task is to detect and find corruption where it's difficult to find," he says. Again, history is a useful guide. It shows that audits and departmental reviews do not have the skills to find corruption. Only a dedicated commission can do that job properly.
The irony is the government had this reform on its agenda at the very time the airport land deal was done. Cabinet was due to consider a national integrity commission in June 2018. Turnbull wanted one and the Attorney-General, Christian Porter, had a proposal underway.
Then came the byelections, the leadership spill and a slowdown under Scott Morrison.
The integrity commission is now more than two years too late. The pandemic is not a good enough reason for further delay. By its own conduct, the government proves the commission is needed more than ever.
David Crowe is chief political correspondent.