EXCLUSIVE: DEFENCE has awarded a multi-million-dollar navy tender to a businessman who is blacklisted in the US and whose banned status shows up in even basic Google searches.

A Herald Sun investigation has found navy top brass had no idea William Thomas Rae, 38, was on the US blacklist when they selected him.



Defence bosses did not require Mr Rae to disclose his status at any stage, and it was not uncovered by lawyers or probity advisers during the tender process.

The revelation of a significant gap between Australian and US vetting procedures comes as Prime Minister Julia Gillard and US President Barack Obama move to strengthen our military alliance.

Mr Rae's company Raecorp International Pty Ltd was chosen to provide logistics support to navy ships and submarines in Australian and foreign ports from April 2011 until 2014.

The supply role involves providing vessels with fuel, food, cars, security and any other required service here and overseas. He already has earned more than $3.4 million.

Queenslander Mr Rae - a director of the planned Brisbane Bombers NRL club - had been on the US government's "Excluded Parties List System" for almost a year when he won the navy work.



The list is used by agencies worldwide to check for suspended or disqualified contractors.

Other Australians on the list include a man sanctioned over chemical weapons accusations.

Another Australian on the list is a security guard locked up over a kickback scheme in Afghanistan.



One of Mr Rae's companies, Pure Blue Meats Pty Ltd - which once boasted of selling wagyu beef to the White House - was added to the list in June.



Defence bosses admit they did not know of Mr Rae's appearance on the list when they awarded the Standing Offer for Naval Port and Agency Services tender to his business RCI Military Logistics in April.



A Defence spokeswoman said Mr Rae was not required to disclose his blacklisting in the US as part of the process, and his tender had been "fully compliant".



Defence was made aware of the issue only after the tender was awarded.



The matter was investigated with no further action deemed necessary.



"Raecorp International Pty Ltd has been awarded a number of contracts to provide support to ships locally, nationally and internationally over the past six months. The performance ... has been to the standards required," she said.



Mr Rae declined to speak to the Herald Sun.



His lawyer said in an email: "Our client ... has extensive experience working with numerous governments throughout the world and has at all times made full and proper disclosure."



The Opposition's defence spokesman, David Johnston, called on Defence Minister Stephen Smith to tighten probity processes.



hudsonf@heraldsun.com.au

Originally published as Navy signs blacklist businessman