The head of Australia’s infrastructure department has agreed that it looks as though officials attempted to cover up an inflated valuation for a controversial land sale connected to the second Sydney airport – and insists that he’s embarked on a clean-up exercise.
Simon Atkinson, the secretary of the Department of Infrastructure, Transport, Regional Development and Communications, faced hours of questions on Monday before Senate estimates about a decision by officials to spend $30m on a parcel of land near the Western Sydney airport worth just $3m – an acquisition that has been excoriated by the Australian National Audit Office.
The controversy stems from a decision in 2018 when officials on behalf of the commonwealth agreed to pay a Liberal donor, the Leppington Pastoral Company, 10 times the fair value of 12.26 hectares of land that, after 30 years, will serve as a second runway for Sydney’s second airport.
The Australian National Audit Office found departmental officials had acted unethically by failing to advise ministers and other senior decision-makers how much they proposed to pay the landowner, and for not providing accurate answers when the audit office investigated the acquisition.
Atkinson confirmed during Monday’s hearing that the land sale was the subject of an investigation by the Australian federal police as well as separate investigations he had initiated. The former inspector general of intelligence and security Vivienne Thom is leading one probe, the former Fair Work commissioner Barbara Deegan another.
On Monday evening, the auditor general, Grant Hehir, said he had referred the matter to the AFP because the audit office “couldn’t explain” the approach to the purchase and the material was “suggestive that the commonwealth may have been defrauded”.
Hehir said the department had failed to make all information available to the ANAO, including the final instructions to the valuer.
The auditor general described the purchase as “unusual” and revealed it was the only instance in his tenure that he had referred a matter to the AFP.
Earlier, the departmental secretary said one member of staff had been stood down pending the outcome of the investigations and a second official was also under investigation for potentially failing to manage a disclosed conflict of interest.
Atkinson said the department had referred the acquisition to the AFP on 8 October, and discovered during the attempted referral that the audit office had already initiated the same course of action.
Labor’s Senate leader, Penny Wong, led the questioning at estimates on Monday, and put it to Atkinson that it looked as though “these people”, meaning departmental officials, had “tried to cover it up” when the audit office “came asking questions” about an unusual adjustment to the land valuation.
Atkinson – who arrived as departmental head well after the controversial transaction – concurred. “Senator, I agree with you,” he said. “I am trying to clean it up”.
Wong asked the secretary whether there was any merit in an observation by the deputy prime minister, Michael McCormack, that the Leppington acquisition in time would be seen as a “bargain” – a statement that earned the Nationals leader a rebuke from Scott Morrison.
“Not that I’m aware of, senator,” Atkinson said.
Having contradicted McCormack, Atkinson softened his observation by noting: “I believe the deputy prime minister was talking about the long-term importance of having the land as part of the airport.”
Wong asked Atkinson how the transaction had been uncovered internally. The secretary said a potential problem with the valuation was flagged “in the accounting space” as part of auditing the department’s financial statements – which is a regular procedure.
The accounts section then asked the group that had presided over the transaction, the Western Sydney Unit, to explain what had occurred. Wong was scathing about the process, noting that section should not have adjudicated its own conduct. “So the Western Sydney Unit said nothing to see here?” Wong asked.
Atkinson replied: “Correct.”
Wong also asked about a meeting between the racing heir Louise Waterhouse and officials in 2017 about road access for land near Badgerys Creek. It has emerged during hearings of the New South Wales Independent Commission Against Corruption that Waterhouse met with officials and separately with Angus Taylor to lobby for changes to her vast landholdings near the new airport.
Atkinson confirmed that the meeting had taken place but noted that the conversation was appropriately minuted, and the department had rejected the Waterhouse pitch. The secretary said the meeting had been requested by the state government.
Wong asked whether the disgraced Wagga Wagga MP Daryl Maguire had sought to facilitate the meeting. Atkinson said not to his knowledge, and as far as he was aware there had been no dealings with Maguire at the commonwealth level.
Atkinson could not confirm whether a meeting with Taylor had proceeded because Taylor is not one of his portfolio ministers. “I certainly can’t speak for every minister in government,” he said. “I have no knowledge.”
