Australia has just awarded a $50 billion defence project to build Submarines and even before the ink is dry on the contract hundreds of thousands of dollars if not millions of dollars have landed in the pockets of Liberal Party crony and former staffer Sean Costello. To make matters worse the French company DCNS which has won the $50 billion contract is currently under investigation by a French court for bribing Malaysian officials to win their submarine contract in 2002.

DCNS is alleged to have bribed officials linked to Malaysian Prime Minister Najib Razak and the corruption also involves allegations of murder. This is on top of other previous allegations of bribery against DCNS.

Another suspicious element of the Australian tender is that DCNS employed former Liberal staffer Sean Costello as its CEO for the bid. Mr Costello was chief-of-staff for former Defence Minister David Johnston who was sacked from his position in 2014.

The contract is said to be the biggest defence contract in this nation’s history. The contract itself really has to be re-evaluated in light of the French court proceedings and Sean Costello’s appointment as CEO of the winning tender. There should at the very least be a Senate Inquiry. It looks like another reason why we need a federal Independent Commission Against Corruption (ICAC).

The video above is Sean Costello on the Lateline show 26/4/16 and raises many questions. (Click here to watch the full story)

DCNS, Malaysia bribes, murder and the French court case

It has been reported in the media since January 2016 that the French are investigating DCNS for bribing Malaysian officials including the Prime Minister Najib Razak. The SMH reported:

A case involving allegations of high-level bribery, blackmail, betrayal and the murder of a glamorous Mongolian socialite in Malaysia has resurfaced in France, only days after Malaysia’s prime minister Najib Razak was cleared of corruption charges at home.

French prosecutors have charged a French businessman involved in Malaysia’s $US2 billion ($2.8 billion) purchase of two French-Spanish built submarines with paying illegal kickbacks to a Malaysian official linked to Mr Najib, according to the French newsagency AFP. (Click here to read more)

In March this year the ABC’s Four Corners screened an episode on Malaysian Prime Minister Najib Razak called “State of Fear” which covered the many corruption scandals surrounding the Prime Minister. It also covered the Submarine bribery scandal and said this:

LINTON BESSER: Accusations against prime minister Najib date back almost a decade.

The first scandal was in 2002, when Najib Razak was defence minister overseeing a $1 billion submarine deal between Malaysia and France. It embroiled some of Najib’s closest confidants in allegations of kickbacks, cover-ups and another murder.

French authorities have indicted the former head of French arms firm Thales. They acted after an investigation by Malaysian anti-corruption campaigner Cynthia Gabriel into a US$108 million commission paid to a Malaysian company.

CYNTHIA GABRIEL, ANTI-CORRUPTION CAMPAIGNER: It wasn’t just this payment that was of question: ah, it was a couple of other payments as well that were made that seemed murky and seemed very shady; that did not have very clear, um, ah, reasons for why, ah, the payments were made.

LINTON BESSER: The middleman in the submarines deal was a senior adviser and friend to the prime minister. His name is Razak Baginda.

CYNTHIA GABRIEL: We don’t know who he is, apart from him being a close associate and friend of, ah, Najib.

Ah, so I think today we are not certain if he was actually on a formal contract with the Defence Ministry, or whether he was just negotiating a very large multi-million dollar contract, only because he was the friend of Najib Razak.

TERENCE GOMEZ: The allegation is that kickbacks were given to the middle-men who negotiated the deal in France. That is the allegation. That allegation now has to be investigated properly.

LINTON BESSER: What thrust the corruption scandal into the global spotlight was another murder. This time, the victim was a 28-year-old model from Mongolia named Altantuya Shaariibuu. She worked as a translator.

It’s also been alleged she was having an affair with Najib, something he’s always denied.

But his adviser, Razak Baginda, was sleeping with her.

CYNTHIA GABRIEL: He did admit that they were having a romantic relationship for a while. And then the events that led to her death suggested that he was trying to get rid of her.

LINTON BESSER: The model, Altantuya, wanted a cut of the money from the submarine deal. (Click here to read more or watch the show)

The French arms firm, Thales, mentioned above owns 35% of DCNS and was allegedly involved in the bribery.

DCNS’s involvement in bribery and scandals has long been known as their Wikipedia profile shows:

The DCN / DCNS plays a major role in “one of France’s biggest political and financial scandals of the last generation [that left] a trail of eight unexplained deaths, nearly half a billion dollars in missing cash and troubling allegations of government complicity” connected to a sale of warships to Taiwan in the 1990s.

Apart from the issues surrounding the sale of ships to Taiwan mentioned above, French prosecutors started investigating a wide range of corruption charges in 2010 involving different submarine sales, with possible bribery and kickbacks to top officials in France. In particular interest by the prosecutors are sales of Scorpène submarines to countries like India and Malaysia. The investigation in Malaysia has been prompted by human rights group Suaram as it involved current Prime Minister Najib Tun Razak when he was defence minister and his friend Abdul Razak Baginda whose company Primekar was alleged to be paid a huge commission during the purchase of two Scorpène submarines. French investigators are interested in the fact that Perimekar was formed only a few months before the contract was signed with the Malaysian government and DCNS and that Primekar had no track record in servicing submarines and did not have the financial capability to support the contract. Investigations have also revealed that a Hong Kong-based company called Terasasi Ltd in which the directors are Razak Baginda and his father, sold classified Malaysian navy defence documents to DCNS. (Click here to read more) DCNS did not employ Sean Costello for no reason and given their past of buying “classified Malaysian navy defence documents” it is highly likely they wanted first hand knowledge of Australian Defence documents. The type of documents that Sean Costello had access to when he was chief-of-staff for former Defence Minister David Johnston. I wonder if Sean Costello gave the parliamentary photocopy machine a major workout before he left his chief-of-staff position and started with DCNS.

The questions for Australia are:

Who in the Liberal Party and/or government said it would be OK for Sean Costello to leave his Liberal Party/government position and become CEO of DCNS in Australia? When did Sean Costello leave his government position and when did he start with DCNS. What background checks did the Liberal Party do in relation to DCNS? From what I can tell no one bothered to even do an internet search, is that correct? Was the Federal Government aware of the Malaysian Submarine bribery scandal involving DCNS before awarding the $50 billion Australian submarine contract? It so what did the government do? Was the Federal Government aware of the other past bribery scandals involving DCNS? It so what did the government do? Has Mr Costello donated to the Liberal Party and if so how much? Has DCNS donated to the Liberal Party or any of its slush funds? How much is Sean Costello being paid? Was he paid a bonus for winning the Australian Submarine contract? Were there any other people paid bonuses for winning the Australian Submarine contract? If there were, who and how much?

I have emailed Prime Minister Turnbull the above questions and will update this post or do another post when I receive a response. (Click here to read the email)

As the French investigation into bribery by DCNS progresses it will likely become more and more embarrassing for the Australian government as to why they awarded the tender to DCNS with such serious allegations hanging over their head. It will become not only an embarrassment for the government in Australia but also globally.

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