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Category: Corporate Governance / Fraud and Corporate Crime / Corruption / Management

Whistleblower lists alleged Leighton International corruption

Friday, 22 Apr 2016 14:59:34 | Conor Duffy

Leighton International is accused of corruption in its overseas business dealings (ABC News: Giulio Saggin - file photo)

A former senior executive of Leighton International, who has now turned whistleblower, has given explosive evidence at a parliamentary hearing detailing claims of extensive corruption at one of Australia's biggest companies.

Key points

  • Whistleblower alleges Leighton International paid kickbacks and facilitation payments on overseas projects
  • Former Leighton executive accused of signing off on an alleged $15 million sham steel contract
  • AFP and ASIC accused of not doing enough to investigate the allegations

Stephen Sasse detailed a disturbing culture in Leighton, now called CIMIC, where a blind eye was turned to corruption and whistleblowers forced out.

"As far as the Leighton International businesses are concerned, nothing surprises me about what they got up to," Mr Sasse told the inquiry.

"The most important issue at the philosophical level is the rule of law question, either you have the rule of law or you do not.

"Once you start diluting that you start pulling apart the basic fabric of what makes the society tick."

Leighton worked on some of the biggest construction projects in Australia and around the world, from highways to hospitals.

Stephen Sasse Photo: Former Leighton senior executive, Stephen Sasse, appearing before the parliamentary inquiry into foreign bribery.

Mr Sasse was the right-hand man to its then CEO David Stewart.

Not long after joining the company in 2010, he began a governance investigation and found an entrenched culture of wrongdoing.

But he lasted just two years and his attempts to blow the whistle weren't welcomed.

"I certainly had a very strong impression that investigations into the international business were not supported by the board," he said.

In the hearing, Mr Sasse spent just over and hour calmly and methodically setting out his former employers history of bribes and corruption.

"Kickbacks to subcontractors, allegations about payments for the procurement of work, facilitation payments which fall under the bribery heading," he said.

"It was almost an overwhelming collection of issues that came out of that core RO-RO investigation (in Indonesia)."

Claims $15 million contract was a sham

From Dubai to India, Indonesia and Iraq, Leighton is alleged to have paid money to middlemen to secure deals.

These are the most significant set of allegations imaginable against the senior executives of one of Australia's largest and most profitable companies.

Labor Senator Sam Dastyari

A contract for $15 million is one of the most serious allegations.

Peter Gregg, Leighton's then Chief Financial Officer, signed off on this deal with a steel supplier.

Mr Sasse told the inquiry he'd seen the document, signed by Mr Gregg, and alleged the contract was most likely a sham and the shareholders' money was being spent on something else entirely.

peter gregg Photo: Inquiry told former Leighton executive, Peter Gregg, signed off on an alleged sham $15 million steel contract. (Supplied)

Labor senator, Sam Dastyari, pushed for the hearings after revelations about foreign bribery in Fairfax publications.

"These are the most significant set of allegations imaginable against the senior executives of one of Australia's largest and most profitable companies," he told 7.30.

"The size of this can't be underestimated."

Mr Gregg is now the CEO of GP and pathology company, Primary Healthcare.

Neither he nor his employer wished to comment, but Mr Gregg has previously denied any wrong doing.

Leighton, now CIMIC, also declined to comment.

AFP, ASIC accused of sub-standard investigation

AFP Acting Assistant Commissioner Ian McCartney speaks to the media Photo: AFP Assistant Commissioner Ian McCartney says the investigation is 'progressing well'. (AAP: Lukas Coch)

Mr Sasse was scathing of the Federal Police and the Australian Securities and Investments Commission (ASIC), who have been investigating allegations about Leighton for four to five years without results.

"It seems to me the AFP, and to an extent the regulator (ASIC), just don't act with the alacrity that one needs for these kind of issues," he said.

He says there appears to be a lack of urgency and understanding.

"I think in the case of the AFP they have not the slightest understanding, in my experience, of how corporations work," Mr Sasse said.

AFP Assistant Commissioner Ian McCartney defended the investigation, telling the committee it was progressing well.

"I don't want to delve into individual investigations I can say that it's progressing well I can say it's been an incredibly complex investigation and that linked into how long and how protracted its actually been," he said.

ASIC Senior Executive George Stogdale said foreign bribery was a matter for the police.

"Bribery of foreign officials falls under the criminal code act 1995 and is a law mainly enforced by the AFP, not by ASIC," he told the committee.

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