Australia was alerted to millions in suspicious payments to Nauru politicians. Then it signed a $2.5b deal

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Nauruan President David Adeang was suspected of money laundering and corruption by Australian authorities three years before he signed a fresh $2.5 billion deal with the Albanese government in exchange for taking in non-citizens Australia cannot detain.

Adeang and Nauru’s former president, Lionel Aingimea, were implicated in more than $3 million worth of suspicious transactions in nine months, according to warnings from financial intelligence agency AUSTRAC. Many were linked to a company traced to Aingimea’s wife that was subcontracted by an Australian firm running the offshore detention regime.

Nauru President David Adeang and Prime Minister Anthony Albanese.

The secret warning to government departments from 2022 has been made public for the first time, after it was read into Hansard on Tuesday night by Greens Senator David Shoebridge. Shoebridge said it was evidence the Albanese government was aware Adeang was suspected of corruption when Home Affairs Minister Tony Burke flew to Nauru to enter a fresh deal with him earlier this year.

“The Australian government has at all times known that the current Nauruan president and key members of his government are seriously corrupt, and they still signed a $2.5 billion deal with him,” Shoebridge said.

Labor’s secretive 30-year deal with Nauru will allow Burke to deport hundreds of former immigration detainees released into the community after a High Court ruling in 2023. It was forged in secret this year to solve a political headache for the government, but is coming under mounting scrutiny.

This masthead and 60 Minutes this month revealed members of the Finks bikie gang won a taxpayer-funded contract to provide security on Nauru to the deported cohort, while a transcript of a suppressed interview this week showed Adeang is hoping to send deportees back to their home country.

As the government faces further challenges to the regime in the High Court, it is arguing it has no responsibility for what happens to people it deports to Nauru, even if they are subject to harm when they get there.

The latest revelation from Shoebridge adds to political pressure over the deal, but Burke’s office brushed it off on Wednesday. “The Government takes advice from our security, intelligence and law enforcement agencies, not from the Greens political party,” a spokesman for the minister said.

The AUSTRAC report details $3 million in suspicious transactions involving Adeang, who was an MP in the Nauru parliament at the time, then president of Nauru, Aingimea, who is now the parliament’s deputy speaker, as well as Aingimea’s wife and brother.

“These transactions involve the movement of funds between personal and business accounts, transactions on behalf of others, and activity indicative of money laundering and corruption,” the report, as read by Shoebridge, says.

“These suspicious transactions occurred over a nine-month period, from January to September 2020, in Nauru, totalling over $2 million in combined credits and over $1 million in combined debits.”

Central to several of the suspicious transactions is a company called LRC Car Rentals and Construction – a firm associated with Aingimea’s wife, Ingrid Aingimea.

This masthead has previously reported that LRC Car Rentals and Construction was subcontracted by Canstruct – an Australian firm that was one of Home Affairs’ lead contractors maintaining offshore detention in Nauru.

Canstruct, at the time of reporting in 2023, said Home Affairs was aware it had used the company and rejected any insinuation that LRC was “anything but a company that provided legitimate services and were paid accordingly and appropriately”.

The AUSTRAC report says one of its previous suspicious matters reports, from September 2020, had identified the “rapid movement of large volume, and value of funds by David Adeang, forming a suspicion of corruption and money laundering”.

“Adeang has received funds from 1402 LRC Car Rentals and Construction, the company associated with the Presidents’s wife, [Ingrid] Aingimea,” it says.

There were 15 Osko payments worth $113,797 between January and September 2020, including three from LRC Car Rentals and Construction.

A further 462 transactions worth $248,888 were associated with a building and construction reference note. He made 140 ATM withdrawals, totalling $68,840, and one branch withdrawal of $700.

There was also suspicious activity associated with then-president Aingimea and his wife’s personal and business accounts during that period.

“[Ingrid] Aingimea is recorded with regular credits from the government of Nauru into both her personal and business accounts,” the report says.

“These government payments are subsequently on-transferred to third parties with beneficiaries including her husband, L Aingimea.”

Ingrid Aingimea’s business account, in the name of LRC Car Centals and Construction, received $580,277 from the Nauru government. It transferred $425,200 of this to her husband.

Across both her personal and business accounts, Ingrid Aingimea received more than $830,000 from the Nauru government. She transferred $462,500 to her husband and withdrew more than $144,000 in cash.

The AUSTRAC report was shared with the Australian Criminal Intelligence Commission, the Australian Federal Police, Department of Foreign Affairs and Trade, Department of Home Affairs, Office of National Intelligence, Australian Security Intelligence Organisation and Australian Secret Intelligence Service.

Shoebridge accused the government of secrecy and fuelling corruption.

“Australia knew about all these corrupt payments, including to now President Adeang, when the Albanese Labor government entered into a fresh $2.5 billion secret deal with this government this year,” he said.

“They are still hiding the [memorandum of understanding] that underpins that agreement, hiding the payments that they are making, and refusing to say where the Australian taxpayer’s money is going.”