Jozef Imrich, name worthy of Kafka, has his finger on the pulse of any irony of interest and shares his findings to keep you in-the-know with the savviest trend setters and infomaniacs.
''I want to stay as close to the edge as I can without going over. Out on the edge you see all kinds of things you can't see from the center.''
-Kurt Vonnegut
A TPB media release resulted in more than 12 months of continuing coverage, two specific senate committee inquiries, an international and domestic investigation by the Australian Federal Police and a further nine cases investigated by the Tax Practitioners Board.
The firm was also disciplined recently for its failure to report the TPB investigation’s commencement and outcome to the strict accounting firm regulator, the US-based Public Company Accounting Oversight Board.
The Tax Office says it fears law firms will repeat the sins of the big four professional services firms as they push into the consulting sector and mix legal and consulting advice.
ATO second commissioner Jeremy Hirschhorn told the Senate inquiry into consulting this week that attitudes to legal professional privilege (LPP) at some law firms were “disappointing” and the committee should turn its mind to firms that have expanded into the non-legal advisory sector.
ATO second commissioner Jeremy Hirschhorn: “I worry that the exact same problem that we had with the big four accounting firms will be replicated in the big law firms.” Alex Ellinghausen
Led by Ashurst and MinterEllison, a growing number of law firms have opened non-legal advisory arms to lock down a greater proportion of client spending and capitalise on the struggles of the big four.
Mr Hirschhorn made the point at the end of a discussion about how the privilege had been abused at multidisciplinary firms, including PwC.
“If I may make one more observation, which is one of the things that I think may be worth this committee thinking about, is the start of a trend ... of law firms getting into consulting businesses and saying those consulting services are offered under the aegis of a law firm.
Blanket claims
Courts and the Senate have criticised consulting firms for using in-house legal divisions to improperly attach legal privilege to non-legal communications and documents to frustrate regulators’ inquiries and investigations.
In March 2022, the Federal Court found that PwC incorrectly claimed legal privilege over a majority of documents it tried to keep from the Tax Office over its work for Brazilian meat giant JBS. The firm also paid a $642,600 settlement to the Tax Office over separate blanket privilege claims relating to five multinational clients.
Mr Hirschhorn implied that some lawyers were dragging out claims of LPP.
“We have been disappointed with the law firms, whether that is the law division of multidisciplinary firm or a law firm itself, in how they have gone about doing the test as to whether something truly is privileged,” he told the committee.
“Instead, in some cases almost viewing it like a negotiating tactic by making a blanket claim and forcing us [the ATO] to go document by document.”
An ATO spokeswoman said the agency had observed that law firms with advisory divisions may be tempted to market non-legal services under the umbrella of a legal services agreement on the implicit or explicit understanding that the work may attract privilege.
She said the agency’s experience was that such arrangements “may occur even when there are internal protocols which are intended to prevent this”.
“This can then cause significant challenges for the regulator, firm and client when a regulator seeks to obtain the work product under its information acquisition powers, and the client seeks to assert the privilege they mistakenly thought they possessed.”
In a statement, NRF chairman Scott Atkins, who made the claim as then-head of the advisory division, said that “clients may avail themselves of legal professional privilege only when it is legitimately available to them – it being their right to do so as a matter of law”.
Labor senator Deborah O’Neill, who is leading the Senate’s inquiry into consulting, echoed Mr Hirschhorn’s remarks.
“The risk of privilege claims being weaponised in order to inhibit reasonable transparency and accountability … appears to be further heightened in the context of firms whose primary function is to provide legal services,” she told The Australian Financial Review.
“Law firms considering entry into the consulting sector must employ caution, and ensure that the integrity of their work is not undermined by the lure of lucrative consulting opportunities.”
Ashurst has appointed seven new advisory partners in the past six weeks, while King & Wood Mallesons established its own compliance and risk offering in February.
KWM partner Tim Bednall, director of consulting spinoff Owl Advisory, said the advisory unit “does not offer legal advice, nor offer or claim privilege on the advice it provides”.
“We’re very clear about drawing the line between privileged legal advice and non-privileged governance and compliance risk advice,” he said.
MinterEllison has the largest advisory outfit. The firm’s consulting managing partner, Victoria Hepburn, a lawyer, said MinterEllison “will always be a law firm at its core”.
“We are focused on solving our clients’ most complex problems, which often involves working with other advisers … The importance of appropriate conflict management is emphasised to each and every lawyer, consult and team members at our firm,” she said.
Ashurst’s Australia head, Lea Constantine, said: “We ensure that legal professional privilege is claimed by our clients only where appropriate and where they have grounds to do so.
“Privilege claims are considered on a case-by-case basis and we do not market privilege as a default benefit of our consulting services.”
Law enforcement insiders are worried an anti-corruption probe into a highly sensitive Border Force unit has produced no public outcome.
A secret corruption inquiry has probed claims the Australian Border Force’s most sensitive division was infiltrated by a criminal syndicate and raised concerns about large-scale traffickers exploiting law enforcement weak points.
Among the inquiry’s damning discoveries is evidence that a “burner” mobile phone was passed to a senior official in the ABF’s Human Source Unit by associates of Noureddean Jamal, a convicted drug supplier whose brother is in jail for terrorism offences.
Noureddean Jamal (right) posed with Jean-Claude Van Damme at a charity night headlined by the famous actor. TWITTER
The unit was launched in 2018 to cultivate underworld informers to combat the flow of drugs into Australia and rorting of the visa system.
The inquiry also found that three unit members attempted to launch a private security and intelligence firm at the same time as safeguarding the nation’s borders sourcing seed money from an associate of Jamal.
Despite the allegations already prompting the quiet scrapping of the 40-person ABF division after only a few years, the corruption probe remains incomplete after four years.
The new National Anti-Corruption Commission (NACC) inherited the ABF probe from its predecessor, the Australian Commission for Law Enforcement Integrity (ACLEI). The case now looms as an early test of how the nation’s anti-corruption chief, Paul Brereton, will handle corruption inquiries.
Seven law enforcement sources, who spoke to this masthead anonymously as they were not authorised to speak publicly, raised concerns that ACLEI’s handling of the allegations had led to no public accountability about what went wrong inside the ABF.
“Four years after this was uncovered, it seems like it has all been swept under the rug,” said one federal law enforcement official.
A senior state police officer said: “If this had happened in the NSW or Victorian police force, there would have been public anti-corruption hearings and reports to parliament. There is one rule for state cops, and one rule for federal officials. If the NACC doesn’t change that, it will have failed.”
Jamal likely facilitates drug importations for multiple TSOC [transnational serious organised crime groups].
Police intelligence report
A third source said that other officials who served in the unit were also angry, believing the unresolved probe unfairly cast a cloud over the integrity of all involved rather than the small number accused of wrongdoing.
The NACC confirmed an inquiry had probed allegations that “staff members of the Australian Border Force had engaged in corrupt conduct by assisting criminal entities in the importation of prohibited substances”.
That investigation began in May 2020, the statement said, and was extensive, including “examination of a number of witnesses, the last of them in late 2022”.
That investigation was completed by the ACLEI, but the responsibility for determining the inquiry’s conclusions and whether they would be shared to the public had “devolved” to the NACC.
The inquiry was sparked in May 2020 by a separate investigation into transnational drug trafficking investigation involving the NSW Police Force, federal police and the Australian Criminal Intelligence Commission.
Law enforcement sources with knowledge of the ABF allegations, say that investigation targeted Noureddean Jamal, a fast-talking, ostentatious property developer who lived in a multimillion-dollar apartment overlooking Sydney Harbour.
Mohammed Omar Jamal. SUPPLIED
Jamal, according to police intelligence, is a close associate of another man currently on trial for drug trafficking. One of Jamal’s brothers, Mohammed Omar Jamal, is a terrorist jailed for planning to blow up a Sydney landmark in 2005, while another brother infamously shot up the Lakemba police station.
Police intelligence suggests that, after release from a three-year prison term for drug trafficking he was handed in 2012, Jamal was suspected of seeking to re-establish himself as a key part of an Australian crime syndicate offering a unique service: the brokering of “access to doors in Sydney and Melbourne”.
“Doors” are weaknesses in the law enforcement net such as a corrupt insider or a security gap that criminals could exploit to get traffic drugs and tobacco into Australia.
The syndicate was offering doors to “middle eastern drug importers/distributors, as well as members of the Rebels, Comanchero and Lone Wolf OMCGs [outlaw motorcycle gangs] … the East Coast Crew [in Sydney] and SOC [serious organised crime] entities in Melbourne”, says one policing file seen by this masthead.
“Jamal likely facilitates drug importations for multiple TSOC [transnational serious organised crime groups].”
From early 2020, state and federal authorities subjected Jamal to intensive surveillance, fuelling suspicions he was involved in large drug importations. That ultimately led to a large seizure of drugs in Asia, with Australian police still awaiting evidence from Malaysian authorities they hope will enable them to charge Jamal.
The operation uncovered something else: Jamal was suspected of grooming an unknown law enforcement official he hoped would provide tip-offs if authorities were monitoring containers containing the syndicate’s contraband.
“They were claiming they were cultivating someone on the inside of Border Force,” said a source with direct knowledge of the Jamal probe. The source said the syndicate members were claiming the insider could assist tobacco importers bypass border controls.
The NSW police notified the body that then oversaw Commonwealth agencies, the Australian Commission for Law Enforcement Integrity.
But ACLEI would not do the inquiry alone and called on the expertise and resources of the Australian Federal Police. The AFP in turn assigned the joint probe, codenamed Operation Young, to an inspector in Melbourne who specialises in complex investigations.
Sources with direct knowledge of Operation Young’s work said one of its key investigative avenues involved tracking a burner phone, which detectives suspected Jamal controlled.
Burner phones are mobiles subscribed in a false name to avoid phone interception.
The burner phone, the sources said, was passed by a member of Jamal’s network to a man in Sydney and tracked to an apartment which checks revealed was occupied by a senior ABF official, known as Officer X for legal reasons.
Office X was part of the ABF’s Human Source Unit. The relatively new division was devoted to the recruitment of human sources – often known as informers – to help penetrate crime groups.
Proposed in 2017, ABF executives thought it would be involved in the most sensitive investigations and use carefully recruited officers able to access classified intelligence, including from Australia’s Five Eyes partners. They would also guard the identity of the informers risking their lives to help investigators.
Officer X was recruited in about 2018 from another agency to a senior role in the unit. One of his responsibilities was building a stable of informers in NSW. Colleagues have told this masthead he struggled to perform, but efforts to remove him from the sensitive division were never acted on. Within two years, he was Operation Young’s key target.
As well as the burner phone, further intelligence pointed to Officer X offering to release sensitive information to organised criminals. Phones were tapped and listening devices planted by Operation Young investigators, revealing discussions among Jamal’s associates that suggested that while Officer X was able to assist with tobacco importations, he would refuse to deal with drug trafficking.
While deeply concerning to investigators, the intelligence was not without precedent.
Since 2012, when this masthead and a joint agency investigation first exposed how drug traffickers had cultivated a corrupt cell of Sydney Airport customs officers (customs become the Border Force in 2015), state and federal drug investigators had uncovered at least three other cases involving corrupt ABF officers working with drug or tobacco traffickers.
These cases had all landed with ACLEI, which in turn asked the federal police to provide it investigators and resources to help charge several officials and force reforms within the ABF.
By 2020, when Operation Young was launched, resourcing and results at ACLEI had improved, but the agency still leant on the federal police’s investigators and technology to try to gather enough evidence to satisfy the high legal burden required to charge corrupt officials.
ACLEI spurned the use of public hearings or major public reports, which anti-corruption experts insist can more quickly expose wrongdoing and drive accountability and change.
As with the Border Force probes before it, Operation Young’s focus was not public accountability. Its aim was to gather enough evidence to lay charges.
Operation Young started “placing dye in the pipes”, a reference to a plumbing technique used to find leaks. A false intelligence report was placed on a classified law enforcement system able to be accessed by the ABF and which contained information linked to Officer X’s suspected criminal associates.
Within hours of the report being uploaded, a source with knowledge of the investigation said it was accessed by Officer X. But rather than produce activity that could sustain a criminal brief of evidence, Officer X was, according to one insider, “spooked”.
The burner phone was ditched and Operation Young’s team left without enough evidence to justify a criminal charge.
“They got very close to getting a brief [criminal brief of evidence] up, but just didn’t get enough evidence,” one senior law enforcement official told this masthead.
A second former official aware of the case said: “Was [Officer X] corrupt? Absolutely. Could it be proved to a criminal standard? That’s another question.”
But there were problems elsewhere in ABF’s Human Source Unit.
Despite public service rules that prevent Border Force officials from operating in the private security industry without express permission from senior officials, corporate records reveal that three Human Source Unit officials had by early 2020 become involved in two private security businesses: Spectral Security Group and a security technology company called Tigo.
According to sources, speaking anonymously to detail confidential information, the probe revealed the three ABF officers had sought advice and obtained $150,000 seed funding from a businessman closely associated with Jamal.
This businessman, who can’t be named for legal reasons, had helped set up Jamal’s property development businesses when he had left jail. In May 2020, just weeks after this businessman helped set up Tigo’s corporate structure for the ABF officers, he gave character evidence backing Jamal’s successful appeal over blocking of his real estate licence application due to his previous criminal convictions.
George Andreopoulos. SUPPLIED
Evidence gathered by ACLEI and obtained separately by this masthead suggests that Officer X was also the intermediary between Jamal’s business associate and the Human Source Unit trio, ABF officers George Andreopoulos, Shamim Kalam and Ben Collins.
This masthead is not suggesting Andreopoulos, Kalam or Collins are implicated in the alleged serious corruption allegations involving Officer X and tobacco smuggling.
But evidence suggests the establishment of their private security businesses was not only a potential breach of the public service rules, but they had – unwittingly or otherwise – done so with the help of a businessman with links to a known criminal.
Internal company documents marked “private and confidential” and dated May 2019 list Andreopoulos and Kalam as “Operations Managers” of the Spectral Security Group, and Collins as the firm’s managing director. At the time, the trio were full-time Border Force officials within the Human Source Unit. By April 2020, the trio were listed as shareholders of Tigo via private companies they controlled.
The documents state that Spectral provided “consultation and security services” to the APEC Summit and various NSW government agencies.
The two firms sought government and private contracts by highlighting Kalam and Collins’ law enforcement credentials, along with the firms use of “the latest technology, security intelligence and specialised manpower to deliver exceptional tailor-made security solutions”.
Colleagues of the trio said they never disclosed their involvement in the two companies to ABF Commissioner Michael Outram or any other senior officers.
“There is no way anyone at Border Force would have approved this if they knew about it,” said one official.
Collins could not be reached for comment, while Kalam hung up the phone when contacted. Andreopoulos denied all wrongdoing and engaged the services of a defamation lawyer.
By around the end of 2020, the three officers departed the ABF. Officer X was forced from his post.
Weeks later, in February 2021, Outram “paused” the operations of the Human Source Unit. On August 27, 2021, he quietly scrapped the unit for good.
Four years after the corruption inquiry into the ABF Human Source Unit began, the outcome of Operation Young remains a tightly held secret.
In a statement, the National Anti-Corruption Commission said it had “inherited responsibility” for completing the investigation from the ACLEI, but that it would be premature to comment on specifics before its report was completed.
It is a situation that rankles insiders. Seven senior law enforcement officials within state and federal agencies who previously worked with ACLEI said it was hamstrung in its set-up and too reliant on the federal police.
Speaking on the condition of anonymity to discuss confidential material, they said they would reserve judgment of whether the NACC would be successful.
The NACC is not yet one year old and is yet to land a major case. Its early activities suggest it will be more transparent and aggressive than ACLEI.
NACC commissioner Brereton has indicated he does not share ACLEI’s disdain for public hearings – it held none in its 16-year history— or its preference for criminal prosecutions, which in ACLEI’s case produced a series of sometimes delayed and underwhelming court results buttressed by occasional successes.
The “commission’s work can be most important… [when] exposing corrupt conduct, even where it cannot be prosecuted in a criminal court”, Brereton said in a recent speech.
“We will conduct public hearings where the circumstances and the public interest justify an exception to the general rule that they be held in private.”
Nick McKenzie is an Age investigative journalist who has twice been named the Graham Perkin Australian Journalist of the Year. A winner of 14 Walkley Awards, he investigates politics, business, foreign affairs, human rights and criminal justice.
