Failures on quarantine contract helped sink Pezzullo

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The decision by then-Home Affairs secretary Michael Pezzullo to direct a government contract to a firm without declaring it was owned by his lobbyist friend was among the conduct that ultimately led to his dismissal.

Information reviewed by an inquiry into Pezzullo, including departmental files and encrypted messages, reveal he privately communicated with Liberal Party lobbyist Scott Briggs about a proposal to enable private firms to manage an expansion of Australia’s quarantine system.

Michael Pezzullo was sacked as Home Affairs secretary on Monday. Credit: Alex Ellinghausen

The exchanges came in the days after Pezzullo used his power as secretary to direct his department to award a $79,500 contract to Briggs’ lobbying company to hold workshops over eight weeks with private sector organisations – including the Business Council of Australia and Aspen Medical – to determine how to set up a parallel private system to expand the COVID-19 two-week hotel quarantine regime.

But Pezzullo failed to declare his relationship with Briggs as required under Home Affairs contracting rules.

Two official sources aware of the inquiry’s focus but who are not authorised to talk publicly said Pezzullo’s handling of the quarantine advice contract was among the conduct examined by the Australian Public Service Commission before its recommendation that the controversial public service chief be fired for conflict-of-interest breaches and other failings.

Prime Minister Anthony Albanese on Monday announced Pezzullo had been sacked after an eight-week probe by the APS Commissioner into his covert dealings with Briggs and other lobbyists.

The probe was launched after a cache of Pezzullo’s encrypted messages – exposed by this masthead and 60 Minutes in September – revealed the then Home Affairs boss’ secret efforts to gain and exert political influence during the terms of the Turnbull and Morrison governments.

Pezzullo’s sacking marks the first time a department head has been dismissed for misconduct. On Monday, APS Commissioner Dr Gordon de Brouwer announced the independent inquiry led by Lynelle Briggs (who is no relation to Scott Briggs) had determined Pezzullo breached the Australian Public Service code of conduct at least 14 times.

The breaches related to five key allegations of wrongdoing, including Pezzullo using “his duty, power, status or authority to seek to gain a benefit or advantage for himself” and failing to “maintain confidentiality of sensitive government information”.

According to the APS Commissioner, Pezzullo also allegedly “failed to act apolitically in his employment”, “engaged in gossip and disrespectful critique of ministers and public servants” and “failed to disclose a conflict of interest”.

The commission noted that “given the public nature of the allegations and the importance of upholding confidence in the Australian public service, it is in the public interest that the overarching breach findings and the recommended sanction are made available in this case”.

The full Briggs inquiry will remain secret because personal information obtained during an investigation of potential breaches of the code of conduct is restricted under the Public Service Act.

But among the specific actions examined by Lynelle Briggs was Pezzullo’s decision to direct his department on August 17, 2021, to give Scott Briggs and his lobbying partner, David Gazard, a $79,500 contract to advise Home Affairs on a plan to privatise part of Australia’s quarantine system.

By the time the contract was signed off by the department on August 25, 2021, Pezzullo had formed a close but largely hidden relationship with Scott Briggs. It involved the Home Affairs secretary pressing the lobbyist to use Briggs’ close relationship with Malcolm Turnbull and Scott Morrison to covertly advance Pezzullo’s political and public service aims.

Scott Briggs is a lobbyist, businessman, former vice president of the NSW Liberals, and was a close confidant of former prime minister Turnbull and his successor Morrison.

Pezzullo previously told a parliamentary committee – before the revelations about his secret relationship with Briggs – that he “personally oversaw and managed” the awarding of the August 2021 three-month contract to Briggs and Gazard’s lobbying firm, DPG Advisory Solutions, to advise Home Affairs about enabling private firms to run a part of the quarantine system.

Around the same time, Briggs and Gazard were concurrently working with major corporations, including PWC, to pitch for what the firms hoped would be a large quarantine contract via a not-for-profit entity the two lobbyists had helped set up, Quarantine Services Australia.

There is no suggestion of wrongdoing on their part. Their firm completed the service as required.

Briggs said he personally had not negotiated with Home Affairs on the consultancy. He said the group being set up to run quarantine was not-for profit, and that his company, DPG, was “not going to have any ongoing involvement”.

Emails and text messages reviewed by the APS Commissioner’s inquiry reveal that Pezzullo discussed the quarantine project via encrypted messages with Scott Briggs but that Home Affairs failed to declare the potential conflict of interest that arose from the pair’s close relationship when it handed DPG the contract.

Pezzullo, who declined to comment, was one of the most powerful departmental secretaries in Canberra and served successive Labor and Coalition governments in senior roles for decades, including as former Labor leader Kim Beazley’s deputy chief of staff and as deputy secretary in the Defence Department during the Howard years.

The leaked encrypted messages show that Pezzullo repeatedly pushed Briggs to use his backroom political influence to ensure Dutton retained his post as Home Affairs minister, while he separately sought to get Briggs to undermine ministers Pezzullo believed were opposed to him or his policy agenda, including now former attorney-general George Brandis.

Pezzullo will not receive a payout from his more than $900,000 a year job, after the Remuneration Tribunal changed the financial payout rules last Friday.

In a statement released on Monday morning, Albanese said the governor-general had terminated Pezzullo’s appointment based on the recommendation of the secretary of the Department of the Prime Minister and Cabinet, Glyn Davis, and De Brouwer.

“Mr Pezzullo fully co-operated with the inquiry. I thank Ms Briggs [former commissioner Lynelle] for conducting the inquiry,” the prime minister’s statement said. “Stephanie Foster will continue to act as secretary of the department until a permanent appointment is made.”

The private encrypted messages between Scott Briggs and Pezzullo also revealed how the secretary had used Briggs to undermine public service enemies, promote the careers of conservative politicians he considered allies and lobby to muzzle the press.

Leaked messages and other confidential documents also revealed Pezzullo’s dealings with Labor-aligned lobbyist Chris Fry. Pezzullo helped arrange for one of Fry’s clients, British American Tobacco, to access a senior departmental official.

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