A billion-dollar contract scandal has prompted serious questions about Australia’s Defence Department.

The department faces mounting scrutiny over alleged corruption linked to a munitions contract with French-owned defence contractor Thales, with former Defence Minister Linda Reynolds and the Australian National Audit Office (ANAO) voicing concerns over probity in defence contracting. 

The allegations were discussed in a recent parliamentary inquiry after a 2016 incident where a Defence employee reportedly shared confidential information with Thales and later joined the company.

In June this year, an ANAO report highlighted “unethical conduct” in a 10-year Thales contract to operate two Commonwealth munitions facilities. 

Following the report, the Department of Defence referred the matter to the National Anti-Corruption Commission (NACC) for investigation. 

Ben Wright, Assistant Secretary of Defence, confirmed that the individual involved dismissed the email in question as a “poorly worded email and a joke”. 

Wright emphasised that Defence “does not consider it acceptable”.

Senator Reynolds has since warned that issuing new contracts to Thales without addressing these findings “inherited a smell, a big smell”.

Deputy Auditor-General Rona Mellor raised further concerns, saying Defence failed to adopt her office’s recommendations to improve probity practices in strategic military contracts. 

“There is an ongoing concern about whether recommendations… are embedded in the culture,” Mellor said, warning Defence of the risks of “capture” by major contractors.

The NACC’s investigation is ongoing.

More details are accessible here.

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