The National, Thursday June 25th, 2015
IN a shocking expose, two prominent lawyers are alleged to have advised an undercover investigator on ways to transfer suspect funds overseas to bribe politicians in PNG.
One lawyer suggested the money could be sent over in small amounts to avoid suspicion, while the other said legal fees could easily be inflated.
When asked to respond to the secretly-filmed footage broadcast on Tuesday night, Greg Sheppard and Harvey Maladina, who are partners of Young and Williams Lawyers, denied any wrongdoing.
Sheppard, who also practises in Australia and a former queen’s counsel (QC), told The National yesterday that his comments to an undercover operative from a non-governmental organisation and aired over the Australian television network SBS, were “general, hypothetical and merely descriptive”.
Sheppard had told the operative, posing as a businessman, that the “only way” to bribe foreign politicians and avoid getting caught was to pay “small dribs and drabs” disguised as commercial transactions.
The undercover sting by Global Witness also showed Maladina explaining how a “prestigious” law firm and a well-known QC (named) issued inflated invoices to conceal the movements of corrupt money.
Both lawyers are said to be close to political leaders.
According to Sheppard’s website, he acts for prominent clients in PNG, “including prime ministers, ministers of state and businessmen”.
In the footage, Sheppard told the operative that any transfer of funds to Australia must not raise suspicion.
“It would have to be something that didn’t raise suspicion, something that was ostensibly commercial,” he said.
“The days of banging a million bucks into this secret numbered (bank) account in Singapore is over.”
In a separate footage, Maladina claimed that his brother, convicted fraudster Jimmy Maladina, was “very close” and “chief adviser” to Prime Minister Peter O’Neill.
“He advises Peter, he talks to the prime minister every five minutes,” he said.
“You want a licence, … he gets it.”
Maladina boasted about how his brother Jimmy acted as a middleman to hide corrupt payments relating to the National Provident Fund (NPF).
He said his brother fled to Australia for several years, saving others.
Asked why they were not prosecuted or convicted, he said: “The problem was there was a missing link in this chain and that was my brother.”
In late May, after a 17-year legal odyssey, Jimmy Maladina was convicted of corruptly stealing funds in 1998 from the NPF, which he chaired.
Harvey Maladina also said he used a leading Australian QC to issue inflated legal invoices to launder corrupt funds.
“He’s billed us more previously,” he said of the QC whom he also named during his meeting with the operative.
He said the QC would have no problem inflating a bill to disguise money transfers to Australia.
“Normally if it’s through the law firms, they don’t usually question that because it’s – especially if it’s a firm that I’m based with, it’s a prestigious firm …,” he said.
He added that this method was better than wiring large lump sums into Australia, which could attract official attention.
Sheppard also cautioned against using Australian banks directly to make “mobilisation payments” and that they should originate from offshore.
“There is no possible way of transferring funds here (Australia) because … the banks are required to divest information (about politicians) so there’s no confidential banking,” he said.
He said any suspicious transactions need to be structured in ways that avoided scrutiny from foreign investigators.
He warned that American regulators were becoming more aggressive in tracking possible payments to financial hubs, like Hong Kong and Singapore.
Nevertheless, Maladina described how a senior (PNG) official “flew over to Singapore recently … to collect some payments” and “came back quite a happy man”.
When contacted for comment by The National (see separate story) and the Sydney Morning Herald, Sheppard said he had never engaged in any wrongdoing.
“I am often approached informally by a variety of people who are not clients to share aspects of my knowledge and practical experience in PNG, and in these areas of the law,” he said.
“My comments on these occasions are by the very nature of the exchange, general, hypothetical and merely descriptive.
“I always assume that those who ask me for this kind of information are doing so to broaden their understanding of the issues and practices here under the relevant laws.”
Maladina said separately the allegations were not true.
“I met an American businessman at the Airways Hotel in Port Moresby last year but at no time did I make or insinuate that illegal payments can be made through my firm or through my partner, Mr Greg Sheppard.”
It is believed that a copy of the video has been provided to the Australian police.
A spokesperson for Global Witness said Australia was at the epicentre of regional corruption and money laundering that was harming ordinary Australians and the citizens of impoverished neighbours like Papua New Guinea.
“Lax laws allow unscrupulous lawyers, property developers and accountants to turn financial centres like Australia and Singapore into havens for stashing dirty money,” Rick Jacobsen told the SMH.
“Governments have a responsibility to act, starting with full investigations and appropriate sanctions, and leading to regulatory reforms that increase oversight of high risk professions.”