Albanese defends $2.5bn Nauru deal as transparency advocates warn taxpayer dollars could fuel ‘kleptocracy’

Anthony Albanese has defended the government’s new $2.5bn resettlement deal with Nauru as “entirely appropriate” after allegations against the country’s president of “money laundering and corruption” aired in parliament this week. Transparency advocates have warned Australian taxpayers could be fuelling a “kleptocracy” on Nauru amid the allegations against some of its senior politicians, calling for a royal commission into Australia’s offshore processing regime. Australia’s secret $2.5bn deal – signed with the Nauruan government in September to forcibly resettle noncitizens without a valid visa on the island for 30 years – is under renewed scrutiny after David Adeang, the president of Nauru with whom the deal was signed, was suspected of “corruption and money laundering” in a classified report by Australia’s financial intelligence agency, Austrac. Sign up: AU Breaking News email Greens senator David Shoebridge read into Hansard in the Senate on Tuesday night sections of the Austrac report based on a series of disclosures made by banks operating on Nauru. The documents read in the Senate allege Adeang, Lionel Aingimea – the country’s foreign affairs minister and former president – and other politically connected figures were involved in transactions “indicative of money laundering and corruption” in the past decade. Related: Nauru president accused in parliament of corruptly siphoning off millions of Australian funding “These suspicious transactions occurred over a nine-month period from January to September 2020 in Nauru totalling over $2m in combined credits and over $1m in combined debits,” the document states. Albanese dismissed a question on Thursday over whether he was concerned by the agency’s findings, which put into question the integrity of the current NZYQ deal. Albanese said the report referenced issues that happened under the former Coalition government. “I’m happy to answer questions and be accountable for what we’ve done in office, and what we’ve done in office is entirely appropriate,” he said. A further “suspicious matter report”, read into the Senate Hansard, relates to “rapid movement of large volume and value of funds by David Adeang, forming a suspicion of corruption and money laundering”. The report details the movement of hundreds of thousands of dollars by Osko transfers, ATM and bank withdrawals. The Austrac report also said: “[Adeang] was investigated in 2015 by Australian Federal Police for alleged bribery in relation to phosphate mining in Nauru.” Shoebridge told the Senate “corruption follows cruelty, and it breeds in secrecy, and that’s the Nauru deal and offshore detention all over”. “We must stop the rorts, stop the cruelty, stop the corruption, and end this toxic deal.” Chief executive of Transparency International Australia, Clancy Moore, said corruption and money laundering allegations had long cast a shadow over Australia’s detention centres on the Pacific island. “Nauru is a classic case of kleptocracy.” Moore said the opacity of Australia’s arrangements with Nauru – successive governments have refused to release details of the agreements it has signed with its former colony – had created conditions for corruption and mismanagement. “The Australian government has continued to prioritise secrecy over transparency in Nauru.” Ogy Simic, the head of advocacy at the Asylum Seeker Resource Centre, said it was clear from the disclosures in parliament – running back as far as 2015 – that the Australian government has known for years about corruption allegations surrounding key Nauruan political figures. “Yet Australia continued funnelling hundreds of millions of taxpayer dollars into a system built on cruelty and secrecy. We have to ask: what else are they hiding?” Simic said Australia’s offshore processing regime could not be reformed, but should be ended. Australia’s offshore detention centre on PNG’s Manus Island was ruled illegal by the PNG supreme court in 2016 and Australia was ordered to pay more than $70m in compensation to those it illegally detained there. Simic said Australia’s “enduring” offshore processing site on Nauru must be opened to parliamentary and public scrutiny. “We need a royal commission to fully expose what successive governments knew, what they allowed, and the human damage they caused,” he said. Related: A translation of the Nauruan president’s remarks will stay suppressed for a decade – but secrecy in Australia’s offshore policy is nothing new Sarah Dale, principal solicitor at the Refugee Advice and Casework Service, said the disclosures aired in parliament further emphasised that forcibly exiling people from Australia to Nauru must end. “What continues to baffle the mind is how we would continue to compromise ourselves as a nation, and, most importantly, put at any further risk a group of individuals that for all their complexity, also share considerable vulnerability,” she said. Subsequent to the Austrac reports, the Albanese government commissioned the former defence chief Dennis Richardson to conduct a review into allegations of corruption in Nauru in 2023. He found that some contractors suspected of drug smuggling and weapons trafficking had been handed multimillion-dollar offshore contracts but concluded that the Australian government “may have had no option but to enter into contracts with these companies” due to the high-risk environments of offshore processing. Adeang, Aingimea, the Nauruan government and the Nauruan embassy in Canberra have not responded to repeated requests for comment. Guardian Australia has also sought replies from Austrac. A spokesperson for the Department of Foreign Affairs and Trade said “the department does not comment on classified Austrac reporting”. The Department of Home Affairs did not respond to a series of questions put to it by Guardian Australia, nor rebut the substance of the disclosures made in parliament. A spokesperson for the home affairs minister, Tony Burke, said “the government takes advice from our security, intelligence and law enforcement agencies, not from the Greens political party”. In September, the Australian government signed a 30-year agreement with Nauru, forecast to cost $2.5bn, for the Pacific island to resettle members of the so-called NZYQ cohort. The NZYQ cohort is a group of 354 noncitizens, currently living in the Australian community, but who have had their visas cancelled on character grounds, most because of criminal convictions. These noncitizens cannot be returned to their home countries, the majority because they face persecution and the risk of harm there.