Papua New Guinea Prime Minister Peter O'Neill allegedly engaged in "misappropriation, conspiracy to defraud and official corruption", according to explosive new evidence detailed in a top secret letter sent by PNG's corruption taskforce to the country's police chief.
The letter, shown to Fairfax Media by police sources, reveals that the expert testimony of Australian forensic experts - who told PNG investigators that Mr O'Neill signed a letter he had claimed was forged - helped to build a case that “PM O'Neill acted dishonestly and corruptly".
The allegations relate to Mr O'Neill's suspected role using his influence to help allegedly corrupt PNG lawyer Paul Paraka steal tens of millions of dollars in PNG government funds using a letter of authority allegedly authored by Mr O’Neill.
Much of the allegedly stolen money has been laundered through Australian banks in wire transfers which the Australian Federal Police are understood to have examined.
The Paraka scandal has been brewing for months in PNG and climaxed on Monday with the issuing of arrest warrants for Mr O’Neill.
The leaked letter to PNG police commissioner Toami Kulunga states that “fresh evidence” reveals that Mr O’Neill’s “denial of authoring and/or signing the directive letter [used by Mr Paraka to steal funds] … can no longer hold water”.
“We have found that PM O’Neill had knowledge of the Paraka Lawyers’ operations … [and] evidence reveals that under his [Mr O’Neill’s watch] as the Minister for Finance and Treasurer between July 2010 and June 2011 in the then Somare government, a staggering amount of K39.06 million [Kina] was paid to Paul Paraka lawyers through structured and layered payments.”
The leaked letter reveals that experts from a private Sydney firm, Forensic Document Services Ltd, analysed a document that appears to have been signed by Mr O'Neill but which the Prime Minister said had been forged.
The expert advice has confirmed suspicions of PNG fraud and corruption investigators that Mr O'Neill did sign the document, which directed PNG public servants to release funds to Mr Paraka’s firm.
Efforts to arrest Mr O'Neill may complicate the relationship between PNG and Australia, which relies on his government's support to run its Manus Island detention centre.
On Monday, Mr O'Neill enlisted lawyers to challenge any move to charge him.
In February, a district court rejected an earlier effort to arrest Mr O'Neill in connection to the alleged fraud, saying arrest warrants were invalid because they were based on laws that had been repealed.
Last year, Fairfax Media revealed that Mr Paraka had wired some of the allegedly corruptly gained funds to Australia.
Documents show Mr Paraka had been regularly transferring large sums of money to several contacts on the Gold Coast and in NSW. On one day in October 2012, a bank account linked to Mr Paraka wired about $80,000 in three transactions to his Australian-based wives and girlfriends, including one who lives in Sydney's Star City casino complex.
Between February 2012 and February this year, almost $3 million was transferred to Australia from bank accounts linked to Mr Paraka. PNG investigators believe most of these funds were corruptly obtained.
The ability of Mr Paraka - who denies any wrongdoing - to transfer suspicious amounts of money raises questions about what Australian banks, the federal police and the anti-money-laundering agency, Austrac, are doing to block or investigate dirty money.
The ease with which allegedly corrupt PNG officials and businessmen can transfer money to Australia is becoming an increasing concern for law enforcement officials in both countries.
Follow Nick McKenzie on Twitter @ageinvestigates
The story PNG corruption: Secret letter reveals new evidence against Prime Minister Peter O'Neill first appeared on The Sydney Morning Herald.