Dateline, Dirty Money: How corrupt PNG cash is reaching Australia


Papua New Guinea is a land of great beauty with a rich culture. It's also rich in resources. The country's a magnet for wheeler-dealers looking to make a profit. So perhaps not surprisingly corruption here is rife.

SAM KOIM, PNG ANTI-CORRUPTION TASKFORCE: In the course of our investigations, we have also uncovered instances of corruption that reaches right to the top.

The Australian Federal Police estimate more than $200 million of corrupt money is laundered from PNG into Australia every year.


A private investigator armed with a secret camera is on his way to meet with a leading law firm.

PRIVATE INVESTIGATOR: Thank you very much indeed.

He's working undercover, posing as a fund manager looking to invest in PNG. He makes an initial appointment.

PRIVATE INVESTIGATOR: I'm here to see Greg.

WOMAN: Who shall I say it is?

He's working for NGO Global Witness - investigating this prestigious law firm. Owned by Australian Greg Sheppard and his business partner, Harvey Maladina, the legal firm has represented high-profile clients, including the current Prime Minister, Peter O'Neill. Several of their clients face corruption charges, so the investigator is looking to find out if their practices are above board.

WOMAN: How do you take your coffee?

PRIVATE INVESTIGATOR: With a bit of milk and one sugar. Greg, this is incredibly kind of you, thank you.

GREG SHEPPARD: Gretchy! Did you forget about me? I’ll have the same, exactly the same.


Greg Sheppard is an Australian lawyer who has been living and working in PNG for more than 25 years.

GREG SHEPPARD: I made about 4 million bucks before I was 30 so I was the cleverest guy on earth until I lost it all. I’m your typical boomster who busted.

PRIVATE INVESTIGATOR: What did you lose it on?

GREG SHEPPARD: Real estate.

PRIVATE INVESTIGATOR: Must be more interesting. Women, wine, rock and roll…

The meeting is supposed to be about high finance but the conversation quickly turns to music.

PRIVATE INVESTIGATOR: I’m completely bemused cause I saw your gold record in there.

GREG SHEPPARD: Yes, yes it’s not a gold it’s platinum. These are my children, and they're in a band which is just going crazy at the moment in terms of record sales.

The band he's referring to is Sheppard. They've gone platinum with their catchy songs. The Brisbane-based band now tours the world performing. Three of the band members are Sheppard family siblings. Lawyer Greg Sheppard is their dad.

GREG SHEPPARD: Catchy as Asian flu. It spent three weeks around Easter time at the number one position in Australia.

PRIVATE INVESTIGATOR: Are you also in the band and write the music or are you just the proud parent?

GREG SHEPPARD: I own it, right.


GREG SHEPPARD: I set it up as a family business.


GREG SHEPPARD: And I control it through a Singapore company called Empire of Song, Chinese.

PRIVATE INVESTIGATOR: That’s beautiful actually.

GREG SHEPPARD: I play a very important instrument in the whole thing, it’s called the negotiable instrument, I sign all the cheques.

Greg Sheppard's resume says he's a former Queensland Crown Prosecutor. Records show he's been the director of more than 50 companies since the late '80s. Currently, he sits on the board of Air Niugini and until recently he was a director of Wilson Protective Services, the subsidiary that runs the Australian detention centre on Manus Island and Nauru. Mr Sheppard's website says he was awarded an OBE and the Companion of the Star of Melanesia for his distinguished service to Papua New Guinea. As the secretly recorded discussion continues, the talk turns to politicians looking for bribes.

PRIVATE INVESTIGATOR: I've spoken with three or four people who've got land to sell and they said well there’s going to be some big mouths to feed.

GREG SHEPPARD: Some ministerial approvals.

PRIVATE INVESTIGATOR: Some ministerial approvals!

GREG SHEPPARD: It’s something that needs to be handled very, very carefully, all those sorts of mobilisation fees really ought to originate from off shore.

PRIVATE INVESTIGATOR: Bluntly, are we likely to get any kind of commercial steer from the minister?


PRIVATE INVESTIGATOR: So they’ll have businesses set up then? Okay… because I would struggle with a brown bag situation.


PRIVATE INVESTIGATOR: I imagined it was a little more nuanced and finessed than that, but I don’t know…

GREG SHEPPARD: I don’t know what it is either… you have got to make sure that it’s not going to be attacked as money laundering.


Sheppard then moves on to how one might make the necessary payments.

GREG SHEPPARD: Look, if you were to pay seven figures to anybody, the world would fall in on top of you. The small dribs and drabs are the only way to go.

Greg Sheppard states he's not advising the investor to break the law.

GREG SHEPPARD: I’m approaching it from a lawyer’s point of view, I don’t want to advise you to do anything illegal. It would have to be something that didn’t raise suspicions, something that was ostensibly commercial, the days of banging a million bucks into his secret numbered account in Singapore is over.

JASON SHARMAN, MONEY LAUNDERING EXPERT: Australia has a lot of dirty money sloshing around in the country. It's a lot higher than most Australians would assume and a lot higher than the Australian Government is prepared to admit.

Jason Sharman is an expert in money laundering. He's spent years investigating money obtained by dubious means and how it then ends up in Australia.

JASON SHARMAN: I wasn't surprised about the level of corruption in Papua New Guinea but I definitely was surprised that this dirty money ended up in Australia.

He believes professionals like accountants, lawyers and real estate agents are acting as conduits to move large amounts of money between countries illegally without fear of detection.

JASON SHARMAN: They're saying ‘Well if the government doesn’t care about this, I’m not going to ask too many awkward questions of my clients either’.

The proximity between PNG and Australia means most major Australian law firms have bases here. And the Federal Government provides more than half a billion dollars a year to this impoverished nation. When the recent budget squeeze saw other country's aid's budgets slashed, PNG's barely budged, a reflection of the strategic and diplomatic importance of PNG to Australia. The relationship heightened by PNG's hosting of the detention centre on Manus Island.

TONY ABBOTT, AUSTRALIAN PRIME MINISTER: Well I hope you always think of Australia as best friend.

As well as meeting Greg Sheppard, the investigator also met his law firm business partner, Harvey Maladina. He's from an influential family, his father and brothers were involved in politics. Harvey Maladina is even more bold in explaining how to do business PNG style.

PRIVATE INVESTIGATOR: I think the mechanism that we're looking for… because we have some big mouths to feed, okay.

HARVEY MALADINA: You want to do that payment off shore.

PRIVATE INVESTIGATOR: I want to follow the route that's already been followed, that’s tried and trusted, that’s safe.


PRIVATE INVESTIGATOR: There's some mouths to feed at ministerial level, do you understand what I'm saying?

HARVEY MALADINA: That normally happens around here. You hit the top guy, just look after the top guy. Normally it’s the minister…

PRIVATE INVESTIGATOR: So this is normal?

HARVEY MALADINA: It shouldn’t be but it is.

He then suggests meeting with his well-connected brother.

HARVEY MALADINA: My brother is a close friend of the prime minister, he's a hustler.




HARVEY MALADINA: Very loyal to him.


That brother, Jimmy Maladina, was a government adviser. Recently he was convicted of corruption. He's expected to be sentenced in the coming weeks. So once bribes are negotiated, how are they disguised?

PRIVATE INVESTIGATOR: Would you like to just quickly run through what we're doing?


Harvey Maladina discusses using inflated legal bills.

HARVEY MALADINA: If you engage us, we engage him and when we do our bills, we do one bill to you and you pay us and we send his money off… to Australia, to his Australian account. He’s billed us more.

PRIVATE INVESTIGATOR: So is he happy to adjust the bill so that it’s higher, so that you can get the money out to Australia?


He also mentions a high-profile Australian QC who helps facilitate this process.

HARVEY MALADINA: We normally engage a guy called… normally if it’s through the law firms they don’t usually question it.

Jason Sharman says this method, although illegal, is surprisingly common.

JASON SHARMAN: If you want to move money from Papua New Guinea to Australia, you get a lawyer friend in Australia to do some work for you and the lawyer friend charges way more than those services are actually worth but you can use this inflated bill as a cover for moving dirty money from Papua New Guinea to Australia. Australia is complicit in this through its inaction or through turning a blind eye.

If correct, why has it not been a priority for authorities to crack down on this behaviour?

TONY ABBOTT: I hope you always think of us as family. Increasingly close family.

There's speculation Canberra doesn't want to rock the boat because of the detention centre on Manus Island.

JASON SHARMAN: I think the recent deal over Manus Island and the accommodation of the asylum seekers has added another element there where the Australian Government definitely doesn't want to irritate the PNG Government for fear of that deal unravelling.

SAM KOIM: That is not something that should hold Australia over the barrel for corruption issues that are plaguing this country.

Sam Koim is the head of the anti-corruption body in PNG.

SAM KOIM: Corruption is the direct cause of poverty.

He says his organisation hasn’t received any government funding since they brought corruption charges against the Prime Minister, Peter O'Neill. The charges were later dismissed. He's calling on the Australian Government to follow Switzerland and the US's lead and crack down on this illegal behaviour.

SAM KOIM: I believe that Australia knows certain transactions originate from illicit sources. And Australia has that information at its finger tips but has not done anything.

JASON SHARMAN: You know you have the stigmatised tax havens that you see in John Grisham novels and James Bond films and Australia in some way, when it comes to foreign corruption, is acting in the same manner as those countries. And I guess we have to ask do we really want our country to be aiding and abetting that sort of criminal conduct abroad.

HARVEY MALADINA: There’s a lot of money coming in and if you are a politician it's the quickest route to being a millionaire in property. I’m going to be a politician too.

Dateline put a series of questions about bribery and money laundering to both lawyers. Harvey Maladina replied saying, the allegations are not true, at no time did I make or insinuate that illegal payments can be made through my firm... Greg Sheppard told us he considers the allegations to be false, he says his comments on these occasions were hypothetical…

PRIVATE INVESTIGATOR: The cost of business here is, leaving aside all the bribery and all that it’s just actual resources of hotels, transport, phones, terrible internet, all those things…um, but I still think…

GREG SHEPPARD: But then the rewards are huge, everything is an elephant here, there’s no pygmies.

PRIVATE INVESTIGATOR: It’s one of the most litigious societies I have ever been in.

GREG SHEPPARD: Isn’t it wonderful! What do you think I’m here for, my health?


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23rd June 2015