Internal log reveals gifts range from branded pens to expensive dinners and sponsorships worth more than $10,000

This article is more than 1 year old

This article is more than 1 year old

Weapons companies and major military contractors are spending tens of thousands wining, dining and giving gifts to defence officials, including during negotiations over multibillion-dollar arms deals.

An internal log of gifts, hospitality and sponsorship provided to defence officials shows a steady stream of small gifts from military contractors in the past three years.

The gifts range from minor offerings – branded pens, corporate merchandise, plaques, and food baskets – to more expensive dinners, cocktail functions and event sponsorships worth more than $10,000.

The vast majority of gifts and hospitality were from companies that regularly bid for lucrative work with the defence department. Defence policy deems it inappropriate to take money from companies involved in tender processes, and warns officials to avoid creating actual or perceived conflicts of interest.

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In one case, Rolls-Royce Australia hosted 18 senior navy officers and defence leaders for a “harbour cruise dinner” in October 2017. The cost of the cruise has been kept secret by defence.

Rolls-Royce has won tens of millions of dollars in work from defence, according to tender data, and has publicly expressed keen interest in obtaining work through defence’s $35bn SEA 5000 future frigate project.

The log also shows Rheinmetall Defence Australia paid for a $150 dinner in mid-2017 with two defence officials to hold “contract discussions” on the $5.2bn armoured reconnaissance vehicle contract, which it went on to win.

In another case, BAE Systems picked up the tab for a “working dinner” in early 2018 to discuss the major $35bn future frigate contract, which it later won.

Other privately funded hospitality events were used to celebrate project milestones.

Northrop Grumman paid for a $1,000 cocktail function in mid-2018 to celebrate a milestone on its maritime patrol aircraft project with defence officials.

Boeing and Airbus paid $600 for a lunch and sporting activity to celebrate the first year of its contract to sustain the P-8A Poseidon surveillance aircraft.

Major military contractors including Boeing, Rolls-Royce and BAE also struck sponsorship deals for defence conferences and events. The log shows at least five separate sponsorships worth at least $10,000 for defence’s air and sea power conferences, and for a 2018 event marking the 50th anniversary of the P-3 Orion surveillance aircraft.

Other gifts were incidental. In June, Raytheon, a big player in navy aviation, booked a table for an Australian Naval Institute oration. But the log suggests the company could not fill the table with “company execs”, so instead offered a $110 seat to the head of defence’s navy aviation systems branch.

There is no suggestion that any of these gifts directly influenced defence officials or procurement outcomes.

Strict rules govern the acceptance of gifts or hospitality, and defence’s policy statement warns its employees to be careful in what they accept. The policy warns that taking hospitality from outside the Commonwealth risks creating the perception of conflict, but is generally defensible if it is used to “genuinely assist the agency to develop and maintain constructive relationships with stakeholders”.

“Officials, particularly at senior levels, are now much more likely to deal regularly with heads of corporations and senior business representatives, heads of non-government organisations and international officials,” the policy statement reads. “In many of these sectors, offers of gifts and hospitality are commonplace.

“For defence to carry out its functions fairly, impartially and professionally, however, and for the public to be confident that it will do so, officials must be able to demonstrate that they cannot be improperly influenced in the performance of their duties by offers of gifts or other inducement.”

The rules also warn that even small gifts of “minor value” may not be acceptable.

“Even token gifts that carry a company’s logo can create, in some circumstances, a perceived conflict of interest,” the rules say.

The policy requires valuable gifts to be declared on the department’s gift register. That register is not publicly available, but was released this week on the department’s freedom of information disclosure log.

The prime minister, Scott Morrison, recently announced he would ask departments to begin publishing their gift registers to improve transparency and integrity.

The Australian National Audit Office last year recommended an online register of public service gifts, saying it would enhance transparency and could “assist entities in meeting accountability and transparency obligations”.

The publication of gift registers already occurs in some states and territories, including Queensland, where departments routinely publish their gift registers to improve transparency and public trust.

A spokeswoman for BAE said the company took its responsibilities seriously and was wholly committed to ethical and responsible behaviour. She said engaging with its customer was an important part of its role in equipping defence.

Boeing said in a statement it was aware of its obligations and complied with all “applicable laws, customer policies and requirements”, as well as its own policies and procedures.

The defence department said in a statement that it was committed to the highest standards of public administration, and that expectations of its staff were set out in the public service code of conduct and the defence force discipline act. It said staff were required to ensure gifts, hospitality and sponsorship did not create a conflict or compromise defence’s reputation.

“Probity is core to all Defence procurement processes and is actively and transparently managed throughout the entire procurement lifecycle, including but not limited to approach to market, negotiation and source selection phases,” a spokeswoman said.

“Defence officials must be able to demonstrate they have not, and will not, be improperly influenced in the performance of their duties by the acceptance of gifts, hospitality or sponsorship.”

Other companies named in this report were approached for comment.