The latest federal police investigation targets several senior Australian company figures who are suspected of engaging in an alleged conspiracy to thwart the earlier federal police probe. Energy minister Josh Frydenberg said the government had been told the federal police probe was “in no way” related to SMEC’s work on the Snowy 2.0 project, saying the subsidiary that won that work was "a separate company". However, there is a clear corporate relationship between the parent company, SMEC Holdings, and its subsidiary SMEC Australia, which won the Snowy 2.0 work, and some of the individuals being investigated by the federal police. The AFP search warrant identifies as an investigation target Mr Goodwin, who was both the chief executive of SMEC Holdings and a director of SMEC Australia at the time it secured the Snowy 2.0 contract. Mr Goodwin hosted Mr Turnbull at a Snowy 2.0 press conference last year. Through his lawyer, Mr Goodwin has denied any wrongdoing.

Labor, which is planning to push the Coalition to strengthen Australia’s anti-corporate crime regime, said the Turnbull government needed to answer questions about the decision to hire and retain SMEC. "These allegations are incredibly serious. A competent government would have made inquiries, and taken necessary action, to ensure that allegations of criminal wrongdoing will not affect this project," said Labor's justice spokeswoman, Clare O'Neil. "The Minister must explain how he has satisfied this responsibility." There are two alleged criminal conspiracies detailed in confidential search warrants that were executed in February and obtained by Fairfax Media. Mr Goodwin is named a suspect in both.

The first involves a claim that a small number of Australian SMEC directors and executives are involved in a plot beginning in April 1, 2016 and still continuing. This conspiracy involves alleged accounting fraud to conceal from investigators financial crime involving an engineering and design water infrastructure contract in India. SMEC’s chairman Max Findlay, who was overseeing SMEC's parent company, headquartered in Melbourne, when SMEC Australia won the Snowy 2.0 feasibility project, is also named in the AFP warrant as a suspect in the ongoing alleged accounting conspiracy. The other businessmen named in the warrant are former SMEC Australia director Alastair McKendrick and senior executives George Lasek, Sri Kishen Dhar, Ankur Charagi and Raj Kumar. The second set of allegations detailed in the AFP search warrant involve Mr Goodwin, SMEC’s company secretary Charles Wilcox, Mr Dhar and retired director Barry Norman. Mr Turnbull and Mr Goodwin in Cooma last December. Credit:Andrew Meares

The four men are suspected of involvement in a conspiracy that occurred between April 2015 and 28 August 2016 to “defeat justice”. This alleged conspiracy relates to efforts to stymie bribery investigations relating to a project in Bangladesh. Other than those named in the warrants, no other SMEC figures are suspected of any wrongdoing by police. No charges have been laid as a result of the inquiry linked to the recent raids or the ongoing 2015 inquiry. A magistrate signed off on the AFP search warrants in February after being satisfied police had “reasonable grounds” to suspect the businessmen named in the warrant were involved in alleged criminal behaviour. Loading This judicial oversight process involves an AFP agent signing a confidential affidavit outlining the evidence the police have gathered to form their “reasonable” belief.

The "reasonable grounds" standard of proof needed to get a search warrant is far less than that required to launch a prosecution, which must then prove a case beyond reasonable doubt. For high profile matters such as the SMEC case, the AFP requires senior officers and internal lawyers to scrutinise the affidavit underpinning the request to a magistrate. Once the warrant is won, it allows police to raid a property and seize computers, documents and phones. Fairfax Media can reveal that SMEC is now seeking to block the AFP investigation in court. After the firm was questioned by Fairfax Media, it launched a Federal Court action to challenge the validity of the AFP warrants. In a statement, SMEC said it was "cooperating with the Australian Federal Police (AFP) as they continue with their investigation into some international projects that SMEC has been involved in over the past 15 years ... SMEC Australia is not the subject of any allegations or investigations by the AFP." Loading

"SMEC has robust accounting protocols and audits are conducted by approved independent third parties,” the company said, while declining to comment on why it was challenging the AFP in court. A law firm acting for Mr Findlay and Mr Wilcox said in a statement that the “Chairman and Company secretary of SMEC, respectively, both vigorously deny any suggestion … of being involved in any illegality or wrongdoing.” “They have fully co-operated, and will continue to do so, with the Australian Federal Police”, law firm Logie Smith-Lanyon said. Mr Goodwin's lawyer, Howard Rapke, said his client would be "responding to the AFP investigation if and when required". The two alleged conspiracies refer to efforts to undermine an ongoing AFP inquiry that began in April 2015 into allegations that SMEC paid bribes or engaged in other financial crime across Asia to win contracts funded by the World Bank. Energy minister Josh Frydenberg sought to distance the Prime Minister's signature project from the allegations involving SMEC after being questioned by Fairfax Media.

"SMEC Australia [the SMEC subsidiary which won the Snowy 2.0 contract] is a separate company and has told Snowy Hydro it is not part of the investigation,” Mr Frydenberg said. Snowy Hydro is the government owned entity which runs the existing hydro plant and is managing the planned upgrade. During the period the federal police suspect Mr Goodwin was involved in the accounting fraud conspiracy, he was a director of SMEC Australia, the subsidiary which secured the Snowy 2.0 feasibility contract. Last June, Mr Goodwin hosted Mr Turnbull at the firm's NSW office. As a company director, Mr Goodwin was responsible for the firm's corporate governance and culture. This responsibility was also part of his role as chief executive of parent company SMEC Holdings. The Snowy 2.0 project, in which SMEC Australia continues to play a vital part having securing further work, is estimated to cost at least $2 billion, will take at least four years to complete and will power an extra 500,000 homes. The allegations also create problems for the government on another front. The department of foreign affairs and the defence department both have lucrative contracts with the publicly listed firm, Cardno, which in March appointed ex-SMEC boss Mr Goodwin as chief executive.

Among Cardno’s Australian taxpayer-funded projects are those aimed at fighting corruption and improving governance in the Pacific. Cardno is aware that its new CEO is himself accused by the AFP of corporate corruption, but has chosen to back Mr Goodwin. When approached by Fairfax Media about the allegations facing Mr Goodwin, Cardno had not disclosed to the market that its chief executive was under police investigation. In a statement, Cardno said it was is "closely monitoring this situation and, in accordance with its continuous disclosure obligations, would make an announcement to the market if it forms the view that such an announcement is required". In late 2017, SMEC had several of its overseas subsidiaries banned by the World Bank after an investigation into "inappropriate payments" linked to projects across Asia. Labor's Clare O'Neil criticised the government's handling of the SMEC allegations and said it was part of a pattern of conduct involving firm's accused of misbehaviour.