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Economics References Committee
22/04/2016
Foreign bribery

SASSE, Mr Stephen, Private capacity

Committee met at 09:36

CHAIR ( Senator Ketter ): I declare open this hearing of the Senate Economics References Committee's inquiry into foreign bribery by Australian corporations, entities, organisations, individuals, governments and related parties. The Senate referred this inquiry to the committee on 24 June 2015 to report by 1 July 2016. The committee has received 42 submissions so far, which are available on the committee's website. Two submissions have been received as confidential.

These are public proceedings, although the committee may determine or agree to a request that evidence be heard in camera. I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee, and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to a committee. If a witness objects to answering a question, the witness should state the ground upon which the objection is taken and the committee will determine whether it will insist on an answer, having regard to the ground which is claimed. If a committee determines to insist on an answer, a witness may request the answer be given in camera. Such a request may also be made at any other time.

I now welcome Mr Stephen Sasse. Thank you for appearing before the committee today, and I invite you to make a brief opening statement, should you wish to do so, and then we will open it up for questions.

Mr Sasse : I think I am primarily here to answer questions.

CHAIR: Thank you. Mr Sasse, I am going to ask a number of questions then I am going to hand it to Senator Dastyari. You were previously employed by Leighton. What was your role with that company?

Mr Sasse : My role with Leighton Holdings was as the general manager of organisational strategy.

CHAIR: Can you just start by giving a general overview of the corruption and probity concerns that you have regarding Leighton Holdings and during what period you held these concerns.

Mr Sasse : I joined Leighton Holdings after the appointment of David Stewart as chief executive officer. He took control of the position in January of 2011. Prior to that, as CEO-elect and before I formally started with the company because I was on gardening leave from my previous organisation, he gave me a series of emails that went back as far as 2008 and 2009 that dealt with a employer of the Leighton international business writing to all sorts of senior leaders within the company, making allegations of misconduct, kickbacks and corrupt payments mostly relating to the construction of what was known as a roll-on roll-off—a floating pontoon, if you like—that was eventually destined for India. No-one had really responded properly to those concerns and allegations, and in October 2010 I started a process of investigating what had gone on and what was underneath these allegations.

CHAIR: What did you conclude?

Mr Sasse : In 2008-09, the Leighton International business started the process of constructing an offshore pipelay barge, which is a vessel that is designed to fix itself to the seabed using the anchoring system and then weld together and drop pipes on the sea floor for offshore oil installations and facilities.

CHAIR: This is in Indonesia, correct?

Mr Sasse : The barge was fabricated in Batam in Indonesia, that is correct. In around 2009, the same business unit within Leighton International received a tender to build a relatively small steel structure which I described earlier as the RORO—the roll-on roll-off, facility. It was designed to go to the port of Mundra in India, which has a relatively shallow depth. So the role of this RORO was to form, if you like, a little floating bridge between the back of the roll-on roll-off car-carrying ship and the shore—so a relatively small piece of steel fabrication. Shortly after the Leighton International group received that tender, managers involved in responding to that tender put in a bid to build that RORO in their own capacity. So what had happened was the company had received an invitation to tender and then, in parallel, executives of that company involved in managing that tender put in their own private tender to build the RORO. They won the tender in their private capacity, and it was fabricated in the same shipyard in Batan as was the pipelay barge known as the LeightonEclipse.

What the whistleblower within Leighton International had been trying to make known throughout the group for the two or three years preceding my involvement was that the steel that was being used to construct the RORO had been purchased and allocated to the Eclipse. So we had a situation where not only had the entity constructing the RORO stolen the work, if you like, from its employer but the entire construction of the RORO was funded or procured through the cost code and systems that were building the Eclipse. To put it in a very gross way, the profit margin on the RORO was 100 per cent of the expenditure, because no-one spent any money on the components for the RORO.

I had more or less completed that investigation by about April 2011. I had reported it to the board. At around that time I engaged a third-party specialist forensics firm to start looking further into what had happened in the RORO situation, because as part of that investigation we also were starting to get indications that, within the broader Leighton Offshore business, which was a subsidiary of Leighton International that dealt primarily worth marine works for the oil industry, was what appeared to be a very odd relationship with a Singapore based company that seemed to have an involvement in almost every contract that they bid. When I interviewed the principal of that company as part of my barge investigations, I was never quite satisfied that I understood what his role actually was. That was one of the reasons why I wanted competent forensics investigators involved.

CHAIR: Can I ask you about some recent media reports of a $15 million offshore payment signed off by Mr Peter Gregg while he was CFO of Leighton Holdings?

Senator EDWARDS: Chair, you have moved to another thing. Can I have a follow-up on that? In your role at Leighton, you had the authority to appoint third-party investigative accountants to investigate actions within the company that you thought were not right?

Mr Sasse : I did, though I made that appointment with the knowledge and support of my chief executive officer.

Senator EDWARDS: Who was surprised when you brought it to him. He had to sign off on expenditure. You said, 'Something's not right here; I need to put an investigative accountant on this job. I'm authorised to do that,'—that is, you were raising the alarm. Was it your chief executive of that division or of the company?

Mr Sasse : The chief executive of the company.

Senator EDWARDS: Which would suggest no knowledge of this.

Mr Sasse : He had been copied in to the whistleblower's emails, but no-one had taken any action, and it was only when David Stewart was the CEO-elect that he made a decision to have it investigated. It had not been looked at properly for two years. There had been two previous investigations—one internal; one by an external third party—that were both characterised by their lack of rigour and lack of detail.

Senator EDWARDS: What do you believe was the quantum of the ultimate siphoning of funds?

Mr Sasse : On my numbers, the RORO was probably worth US$12 million to US$14 million. That would have been the size of the theft.

Senator EDWARDS: In your time there, do you suspect that there may have been other ROROs?

Mr Sasse : The Leighton International business operated without any of the governance structures and frameworks that I expected, having come from one of the other Leighton subsidiaries where I had worked for the better part of a decade. I cannot say specifically that I came across other RORO examples, but there were certainly some very odd practices in terms of governance, reporting and the way jobs were bid.

Senator EDWARDS: In that division, was there a person nominated within the company at that time to go to for whistleblowing purposes?

Mr Sasse : The division had its own board. It did have a mechanism for whistleblowers and, as I mentioned earlier, one of the investigations that that board initiated in relation to the whistleblower's complaints, which was conducted by an external third party, seems to have been done specifically with the instruction not to get to the bottom of it.

Senator EDWARDS: So it is like a suggestion box that does not have a lid. It just goes into the ether. It goes into the shredder underneath.

Mr Sasse : If you have an absence of managerial will to get to the root of a problem, then there are lots of ways of making sure you never get there.

CHAIR: Unless there are any further questions on that point, I was going to move to the recent media reports of a $15 million offshore payment signed off by Mr Peter Gregg while he was CFO of Leighton Holdings. Have you seen any evidence which shows that Mr Greg authorised this $15 million offshore payment?

Mr Sasse : I have, but not in my time as an employee of the Leighton Group.

Senator DASTYARI: How is that the case? Can you explain it to me?

Mr Sasse : I was instructed by ASIC to attend an interview with them in Melbourne in November 2014, and in March this year I executed an affidavit for them outlining my very limited involvement in the transaction to which that payment relates and putting a number of emails into evidence.

CHAIR: So you have seen a document signed by Mr Gregg?

Mr Sasse : Yes, I have.

CHAIR: Do you believe that payment to be a corrupt payment?

Mr Sasse : It is very difficult to characterise it any other way.

CHAIR: Do you want to elaborate on that for us?

Senator DASTYARI: What was the payment for, Mr Sasse?

Mr Sasse : The document is a two-page agreement between Leighton Administrative Services—which is a subsidiary of the group whose primary role is to employ the corporate office staff and buy the paper for the photocopier; it is not an operating company—and an entity called Asian Global Projects & Trading, based in the UAE. The agreement purported to establish a single-vendor arrangement for the entire Leighton Group steel consumption. There are numerous reasons why that agreement would raise concern and suspicion. Do you want me to run through them?

Senator DASTYARI: Yes, do.

Senator XENOPHON: Can give us the context of steel consumption as well—which projects, where, and where was the steel going to come from?

Mr Sasse : Firstly, of all of the products that you would aggregate in a construction contracting business from a procurement perspective, steel is probably the most unworkable because it is used in such a wide range of applications, from re-enforcement to piles to structural steel. There is an endless array of variation. That is the first thing. The second thing is it is very hard to predict what your steel consumption is going to be. It is even more challenging within the Leighton Group, where there are three local and two offshore operating businesses, operating completely independently of one another. Culturally, to get a single procurement arrangement for something as simple as air travel within the Leighton Group took them a lot of change management, for want of a better term.

The second major point is that—

Senator XENOPHON: Sorry. Where was the steel going to be used? Which project was this?

Mr Sasse : According to the agreement, every Leighton Group project, of which at any one time there might be 300 around the world.

Senator XENOPHON: Including projects in Australia?

Mr Sasse : Correct. The second odd thing about it is that, if you go to a vendor and say, 'I want to aggregate all my purchasing through you,' you do that because you expect the aggregation to produce a lower cost. Normal practice is that you say to the vendor, 'I expect to see a significant reduction'—it might be the market less 15 per cent—'for everything I buy from you.' You certainly do not pay a prospective vendor for the privilege of aggregating your purchases. You might pay a specialist consultant to have a look at what the steel consumption is and how you might aggregate it, but that would be a spend of a couple hundred thousand dollars, not $15 million.

The other aspect of it is that the agreement was signed in August 2011. There had been absolutely no discussion amongst the operating companies or the holding companies as to whether or not there was any appetite or capacity for us to aggregate our steel purchasing, and at exactly that time we had received a draft report from a very detailed organisational review that was conducted by a third-party management consulting firm which concluded categorically that it was just not feasible to do that. So when you see an agreement, given that background, that time and the decisions that were being made at that time, it is quite clear that the agreement and the payment associated with it are designed to do something other than what the document actually says.

CHAIR: And what was that?

Mr Sasse : In retrospect, and in the knowledge of the Fairfax reports, it appears that the signatory for the counterparty to that agreement is associated with the Unaoil interests which have been raised recently in the Fairfax press. But the payment itself appears to have been part of closing out an arrangement that the Leighton international group had entered into in India in divesting, I think, 35 per cent of its subsidiary to a local organisation. That was a very complicated transaction. There had to be, as part of that, a cash injection into the joint venture after the divestment. There were limitations and rules in the Indian jurisdiction about how that could happen, and it would seem to me that this was set up as a vehicle to bypass those rules and limitations.

Senator DASTYARI: It was a bribe?

Mr Sasse : I am not sure that you would conclude it was a bribe, but characterising a payment as something that it is not is not a sign of good corporate practice.

CHAIR: What would you say that this transaction tells us about the culture and governance standards within Leightons at the time—that this $15 million payment could be made in these circumstances?

Mr Sasse : That payment came from the holding company. I think that is of enormous concern, because the holding company is domiciled here, operates here, has a reasonably well regarded board—or had. It surprises me that that payment could be made in such a form from the holding company. As far as the Leighton international businesses are concerned, nothing surprises me about what they got up to.

CHAIR: Could you explain why you formed that view?

Mr Sasse : The RORO investigation turned up numerous other issues that needed to be followed up and tracked down: kickbacks to subcontractors, allegations about payments for the procurement of work—that is, facilitation payments, which fall under the bribery heading. An almost overwhelming collection of issues came out of that core RORO investigation.

CHAIR: Have you been interviewed or have you been spoken to by ASIC investigators about the $15 million payment?

Mr Sasse : Yes. I was interviewed in November 2014. What it was all about was not apparent to me until I saw the full suite of documentation in March this year.

CHAIR: How long do you think ASIC has been investigating this payment?

Mr Sasse : I would say they have been on the case for probably five or six years—certainly five years.

Senator DASTYARI: Having been on this committee for a couple of years and having seen different people come forward—whistleblowers in banking or tax or other matters—it takes a lot to gobsmacked me, but your evidence is truly extraordinary. What you appear to be saying, Mr Sasse, is that, when you were brought on to look at one individual, isolated matter and you went through that process, you uncovered a culture and a type of behaviour that ran through the entire Leighton Holdings. Is that fair to say?

Mr Sasse : Very much so.

Senator DASTYARI: I have some more specific questions. Before we get to those, there is the broad framework. I want to put the counterargument to you which we all hear what we talk about it. Putting aside the specific issue of Leighton Holdings, the broad issue on international corruption is always: 'But you don't understand. This is how business is done. If we want to win contracts, we have to engage this way. That's how they do business in these parts of the world. That's just how it's done. If you think that's not how it's done, you're being naive.' What do you say to those kinds of arguments? I am sure you have heard them before, Mr Sasse.

Mr Sasse : There are probably two categories of answer to that. The first is that you can make a choice as to which markets you want to operate in. Certainly at that time, there was a vast amount of construction infrastructure work in jurisdictions such as this one where you could work without having to incur these kinds of governance risks. The second is that, in my experience, you do not generally see this kind of conduct being conducted in isolation. If you see this kind of behaviour, there are usually other unethical or unlawful things going on at the same time.

Senator DASTYARI: The tip of the iceberg, Mr Sasse?

Mr Sasse : That is one way of putting it. The other aspect—

Senator EDWARDS: A pattern of this behaviour. Facilitation leads to: 'Okay, we've come this far. We might as well go to the next stage and the next stage,' and then we are in another jurisdiction and it is a case of: 'We did it there, so what's the difference?'

Mr Sasse : There is a question of degree that needs to be thought about. If you do need to get a truck off a wharf in North Africa, you need to pay the guy who runs the gate US$5 to let you in. Maybe you tolerate that. Once you are in the millions of dollars and it is starting to affect contract values very significantly, that becomes a very different issue. The most important issue at the philosophical level is the rule of law question. Either you have a law or you do not. Once you start diluting that, you start pulling apart the basic fabric of what makes society tick. The second response to that is that there is clear evidence from the RORO investigation that the facilitation payments and other payments to suppliers in a number of cases came back to individual executives. That takes your scenario one step further down the road to perdition. It is all very well to say, 'You don't understand. We have to do this to stay in business.' But, if we have to do this to stay in business and I am lining my own pocket, you have gone into a whole new moral space.

Senator DASTYARI: You answered questions about being interviewed and spoken to by ASIC. I know there have been some media reports to this effect, but I understand the Federal Police are investigating these matters as well. Is that your understanding?

Mr Sasse : I had an interview with the Federal Police, probably in 2012, when this started to come out.

Senator DASTYARI: Have you heard from the Federal Police since 2012?

Mr Sasse : No.

Senator XENOPHON: What month in 2012? Earlier or later in the year?

Mr Sasse : May/June, from memory.

Senator XENOPHON: So almost four years?

Mr Sasse : Yes.

CHAIR: On that, what do you think about the ability of the AFP and ASIC to investigate these transactions?

Mr Sasse : In any investigation, no matter what you are investigating—from a workplace fatality to a case of corruption allegations—you need to get the investigation underway and completed as soon as you possibly can. The longer it takes, the more it is delayed—people lose things, they forget things and they create cover stories. This stuff has to be acted on, more or less, immediately. In both cases, it seems to me that the AFP and, to an extent, the regulator just do not act with the alacrity that one needs for these kinds of issues.

CHAIR: You say there is a lack of a sense of urgency in dealing with the issues?

Mr Sasse : I think that is a fair assessment. I think, in the case of the AFP, they have not the slightest understanding, in my experience, of how corporations work. I think, to be able to investigate and identify—

Senator EDWARDS: That is a big statement. I would like you to flesh that out a little bit more. I have no doubt that you have got examples of what would lead you to that, but that is fairly explosive.

Mr Sasse : I do not mean it to be that. Based solely on my four-hour interview with them in 2012 and the nature of the questions—what was asked and what was not asked—my primary conclusion was that these guys are playing in an area that they do not really know much about, which is hardly surprising. Your average AFP officer does not have experience in corporate Australia.

Senator EDWARDS: Do you think that people with good corporate knowledge is an area which is missing within the AFP?

Mr Sasse : Yes. Not just a corporate knowledge that is learnt from sitting in law school learning a corps act, but knowledge that comes from working and living in those environments.

Senator DASTYARI: We will put that to the AFP when we see them. Can I quickly take you to Indonesia? Not physically—we are here today.

Senator EDWARDS: Teleport me to Indonesia! That will be a good trick!

Mr Sasse : Sounds like the perfect vacation, Senator Dastyari!

Senator DASTYARI: What is your knowledge of corruption or illicit payments involving Indonesian operations outside the RORO structure that we have already talked about?

Mr Sasse : I have no direct knowledge of Leighton group activities in Indonesia other than the RORO and the Eclipse construction.

Senator DASTYARI: If I can take you to Iraq for a moment. You interviewed a Leighton consultant called Srikumar?

Mr Sasse : I did.

Senator DASTYARI: What did Srikumar do for Leighton Holdings and in what countries?

Mr Sasse : Srikumar was based in Singapore around a business called Lye.

Senator DASTYARI: Appropriately.

Mr Sasse : He seemed to be involved in almost every single project that the Leighton offshore business bid on and won. His name was all through the RORO issue and when I concluded my interview with him, which I think was in Kuala Lumpur as part of my RORO investigations, I was never ever satisfied with his explanation of what he was actually doing for us. He would say, 'Well, I have got all of these resources that help you win the project,' and I said: 'Well, what kinds of resources? Are they people? Are they plant and equipment? Technology?' I was never able to get a straight answer on what he actually did. It was at that point, as I mentioned earlier, that I wanted to hand this thing over to proper forensic accountants.

Senator DASTYARI: In hindsight, is it your suspicion that he was—I am going to use the term 'facilitator'—a middle person who would be looking at the kinds of payments that would otherwise be kept off the books of a company like Leighton international?

Mr Sasse : Yes. There is no doubt about that in my mind at all.

Senator DASTYARI: The go-to guy to pay bribes, kickbacks, secret commissions or whatever is necessary?

Mr Sasse : To assist in winning the work, yes.

Senator DASTYARI: And to win this work, that would require—are we talking about bribes, facilitation payments, kickbacks, secret commissions?

Senator EDWARDS: All of the above I suspect.

Senator DASTYARI: Or all of the above?

Mr Sasse : One of the reasons I needed specialist assistance in being able to answer that question myself was that it is not easy to track payments or big costs through projects if someone has a mind to hide them or set them up in some kind of misleading way, which is why I wanted these experts in to have a look at it.

Senator DASTYARI: When did you first hear of these allegations inside Leighton Holdings that bribes had been paid in Iraq or in other places?

Mr Sasse : In terms of Iraq specifically, I had my first involvement—that is, a very loose term because it was just a very brief conversation—in August 2012 when the then CEO, who had brought me in, was very abruptly terminated.

Senator DASTYARI: This was David Stewart?

Mr Sasse : This is Mr Stewart. There was no proper handover and, in the absence of that, he basically left a whole lot of notebooks and papers with me on his last day and said, 'Well, here's all the stuff and, by the way, there's a page here'—dealing with the conversation he had had with the head of Leighton international, which has been reported very extensively. That was really the first I had known about it.

Senator DASTYARI: Was it reported extensively at that time or was it subsequently reported extensively? There have been some stories about this for a while and I am just trying to get the dates right.

Mr Sasse : It got into the media in 2012.

Senator DASTYARI: That was the first information you had about bribes being paid in Iraq? There was no conversation with you at that time; it was just the notes of the conversations left with you?

Mr Sasse : Correct.

Senator DASTYARI: Do you have any knowledge of investigations carried out by a firm called Concorde? Can you explain to me the role of Concorde?

Mr Sasse : Concorde were the organisation I appointed, after the RORO—

Senator DASTYARI: This is the forensic team that you appointed?

Mr Sasse : Yes.

Senator DASTYARI: You brought in the company Concorde.

Mr Sasse : Yes.

Senator DASTYARI: They did an investigation.

Mr Sasse : Yes.

Senator DASTYARI: What did they find?

Mr Sasse : I left Leighton Holdings in October 2012. But from the point David Stewart left in August, I was effectively frozen out of any kind of activity at all. My knowledge of what happened with these kinds of issues from August is the same as anybody else who reads the Fin.

Senator DASTYARI: You left, but is it fair to say you were pushed out, you were made unwelcome?

Mr Sasse : Yes, that is probably one way of putting it.

Senator DASTYARI: Did you feel you were made unwelcome because of what you were uncovering?

Mr Sasse : I certainly had a very strong impression that investigations into the international business were not supported by the board. Certainly, no-one seemed to have the energy to investigate the ramifications of some of these facilitation and other suspicious payments through Srikumar and others, and my impression is that once I left the work Concorde was doing was pretty quickly shut down as well.

Senator DASTYARI: Did you see any of the Concorde reports or any of the work they concluded?

Mr Sasse : Only the very early aspects of what they were doing. Again, they would have finished, or should have finished, what they were doing around August-September-October 2012 and I had gone by then.

Senator DASTYARI: It sounds like you went on a journey where you began with an investigation of an individual item to look at whether or not there was something—I am using the word 'dodgy' or 'improper' here—as the result of the whistleblower. You go through this process of investigation and at the conclusion of it you feel there is so much here that requires more extensive investigation that you set up a process for a more extensive investigation. Then both the CEO and yourself are terminated, or made unwelcome or asked to go. What does it say to you about the type of conduct and behaviour of Leighton international at that point in time?

Mr Sasse : The conduct and governance of Leighton international was, without question, unacceptable. The issue of why Mr Stewart and my termination from Leighton Holdings occurred with such suddenness is—I can only speculate. They are really questions you need to ask the board at the time.

Senator DASTYARI: I think we will have a chance to do that.

Senator XENOPHON: So we will or we won't?

Senator DASTYARI: I said we may have a chance.

Senator EDWARDS: So we invite the board in?

Senator DASTYARI: Yes, invite the board in. Your view on the corruption does not fill us with confidence. The bit that I am concerned about here, and I want to ask you about is, there are two issues here. One is how was the international Leighton's company behaving and conducting itself? That is one issue, and there seems to be extensive evidence from what has been revealed in papers for people to have concern, and these people are entitled to their days in court and I am sure they will get that at some point. But there is another question: to what extent was the Australian operation turning a blind eye, and not asking the right questions—either it was intentional or a failure? It sounds like, Mr Sasse, your concern is that this was an intentional decision to turn a blind eye?

Mr Sasse : I cannot speak for other people's intentions. The facts are that the Leighton international business, despite the fact that it had its own board, which comprised at least three members of the main board—that being the board of Leighton Holdings Ltd—operated completely outside the standards that we expected from the Australian operating companies, and that there was, in effect, no governance framework whatsoever in terms of this kind of activity. Now, insofar as the duties of boards and directors are to exercise some level of due diligence to make sure that those governance frameworks are in place and are effective, then the board failed dramatically.

Senator XENOPHON: Was it a wilful blindness or a wilful ignorance, in your view?

Mr Sasse : Again, I am not comfortable making these sorts of comments about other people's intentions, but there is no argument about the facts.

Senator EDWARDS: I have googled you to find out that you are gainfully employed now and everything is going all right for you. I am concerned about how it all faired for you because that was obviously a complete blindside activity, in a corporate sense, after extensive experience in this industry. It must have been very disappointing to be at this phase of your life, with what would have been an aspirational company to work for, and to find what you did. Is that fair?

Mr Sasse : Yes, it was. It was a challenging time indeed.

Senator EDWARDS: What has it done for you personally and professionally since that time? Have you been able to move on, head held high without any kind of corporate ramifications?

Mr Sasse : My head is indeed held high. I probably took the view that I was not that interested in getting involved in a corporate role anymore. I think the lack of support for people trying to uncover issues of wrongdoing, particularly when they are systemic, was a bit depressing in some respects, and I took the view that I would rather work in more of a portfolio approach doing my own thing, where I can choose who I work for and what I do.

Senator EDWARDS: You are going exactly where I want you to go, because it is how whistleblowers are treated in this country. When they do blow the whistle, they are in senior positions. Obviously you held a very senior position with the company and, indeed, you were acting appropriately calling the people in. In fact, can you explain to me what Dr Ferguson's role was in your time when you were bringing all of these matters to the company's attention? She was the go-to person that was employed by Leighton with the ethics committee chair, wasn't she?

Mr Sasse : I have not met Dr Ferguson, and I am reasonably certain that she was appointed to the board after I left.

Senator EDWARDS: Had you not raised anything directly with her then, at that time? She was gone?

Mr Sasse : No. She was not on the board when I was there.

Senator EDWARDS: Did you approach the ethics community, or was the ethics committee a new structure after you left as well?

Mr Sasse : No, the board has had an ethics committee for some time. Its primary role was oversight of work health and safety issues, but these issues went to the board pretty much immediately I got to the point that I realised the magnitude of the problem. I think the first written report to the board was probably about Leighton international and the RORO was probably April or May 2011.

Senator EDWARDS: So it goes back a while. The ethics committee in the organisation was looking after heights of ladders and gangways and things like that, not the corporate culture.

Mr Sasse : It was more around if there was a group fatality, the opco would have to come in and essentially present to them on what had happened and what they had done to mitigate the findings of investigations and reports and that kind of thing.

Senator EDWARDS: So there was nowhere really to go for any kind of reporting of commercial inappropriateness or impropriety?

Mr Sasse : If I could put it this way: if the board is not interested, that is kind of the end of the line.

Senator EDWARDS: Yes, it is the end of the line. That establishes that. I will come back to you on that final thing for some advice for this committee on how you think whistleblowers should be treated. But your comments on the AFP interest me. They are our next witness. They are by their very nature looking to enforce the laws that we give them. As policymakers, we debate legislation and give them laws. But they have to understand what they are looking for. Your suggestion is that there are not enough AFP officers who can go through a series of years on a balance sheet or look at the operations of a company and its expenditure and be able to identify what you would with your course of knowledge over the many years of running contracts as beacons or alarms bells for them to further investigate.

Mr Sasse : I think that is absolutely right. I do not make my comments about the AFP with any intention of derogating—

Senator EDWARDS: We love the AFP. We just want them to be the best they can be.

Mr Sasse : If you compare the types of regulatory authorities that look after this area in the UK and the US, we are not playing in the league in terms of the capacities of the AFP in particular, and the track record is pretty poor. At the end of the day, that is what speaks volumes.

Senator EDWARDS: You would assert that the United States Department of Justice is all over us when it comes to these types of things?

Mr Sasse : I do not think I would be alone in making that conclusion.

Senator EDWARDS: We have a shortfall in resources there and perhaps a lack of focus that we should be looking to fill rather than criticising the operations of the AFP. We are saying that perhaps they are not focused on these areas as much as they should be.

Mr Sasse : It may be an issue of focus, but I do think it is an issue of skill and experience.

Senator EDWARDS: You had four hours with them and your take from that four hours was the assessment which you gave earlier. Is there anything you want to add?

Mr Sasse : No, I think I covered that.

Senator EDWARDS: All right. If you could provide us with some gratuitous advice—I do not mean any disrespect there—and tell us what you believe is lacking with whistleblower laws in this country, from your own personal perspective.

Mr Sasse : I do not characterise myself as a whistleblower. I raised a series of what I regarded as unacceptable behaviours and reasonable suspicions as to broader issues. That investigation was effectively shutdown. The then CEO—

Senator EDWARDS: By the board?

Mr Sasse : It is the board that does the termination of the CEO, so one has to conclude that. There are a couple of issues that arise in corporate wrongdoing generally. The first is that, in my experience, the decision to pursue and investigate wrongdoing within companies tends to be one of the discretion of the senior leadership at the time. I think that there needs to be some kind of mechanism that takes discretion away and says that if there is reasonable evidence of wrongdoing, it must be investigated and brought to conclusion. That is the first piece of gratuitous advice, if you like, that I would make. How you do that as a lawmaker, I will leave to you.

Senator EDWARDS: It seems like you were summarily dealt with, you and Mr Stewart, for raising these issues. It seems hardly equitable.

Mr Sasse : It is not but then corporate life rarely is.

Senator DASTYARI: Not like our business!

Senator EDWARDS: Yes.

Senator XENOPHON: Just to recap, effectively we are talking about a $15 million payment that was, in effect, a bribe, a corrupt payment? How would you best characterise that payment?

Mr Sasse : I do not think it is correct to characterise it as a bribe. If we are talking about the payment between Leighton Admin Services and Asian Global Projects—

Senator XENOPHON: Yes.

Mr Sasse : that $15 million—it seems to have been constructed to bypass the Indian regulatory framework as a minimum—so, to make a payment for one thing that is really for something else, which is a breach in itself. Whether or not it was properly authorised by the various authorities within Leighton Holdings at the time, I cannot answer but I would be amazed to find out that it was.

Senator XENOPHON: Would you characterise it as an improper or unlawful payment?

Mr Sasse : Without question.

Senator XENOPHON: Okay. You do not want to characterise yourself as a whistleblower, but it seems to me you raised these issues at the highest levels of the company and you were summarily told to leave, or you were forced out of, the company—is that a fair characterisation?

Mr Sasse : It is pretty correct, yes.

Senator XENOPHON: So, in a sense, you were punished for coming forward with your concerns?

Mr Sasse : I think so, yes.

Senator XENOPHON: In terms of the culture of Leightons, back then when you were there, would you describe it as a toxic culture? Would you regard it as a culture where there was a cavalier disregard for following the rules? How would you, in the best and fairest way, describe the culture within Leightons at the time?

Mr Sasse : I would not want to make this comment about the operating companies, because my experience at the operating company level is that they were generally very well managed. The holding company seemed to lack the necessary appetite to, almost, be suspicious. When something looks odd, someone should put their hand up, have a look and ask questions. It seemed that those sorts of questioning, challenging, investigative approaches at board level simply were not there. It is as if people like the fees and flying around at the front of the plane, but when it comes to interrogating the businesses, the subsidiary boards and management as to what is actually going on I did not detect any great level of appetite for doing that effectively.

Senator XENOPHON: You made a reference to the rule of law and the question of what happens when society does not follow the rule of law. Do you think they were abiding by the principles of the rule of law in Leightons, within your knowledge?

Mr Sasse : Not to the standard that I would regard as acceptable in this country.

Senator XENOPHON: Which leads to what you described as the road to perdition?

Mr Sasse : Yes.

Senator XENOPHON: I want to ask you questions about the AFP. This is not a criticism of the AFP. I want to reflect on Senator Edwards' remarks that we value the role that the AFP play. Is it fair to say, in terms of their resources or their structure, that when you were interviewed by them almost four years ago it was the case that you were educating them rather than them obtaining information from you?

Mr Sasse : I think it is quite a good way of characterising my concerns.

Senator XENOPHON: Did it worry you that you were telling them the basics of dealing with what appear to have been widespread unlawful payments and advances?

Mr Sasse : Yes, it did.

Senator XENOPHON: So, the people who interviewed you did not have the expertise to deal with these matters, in your view?

Mr Sasse : No.

Senator XENOPHON: And that is not a criticism of them.

Mr Sasse : No, they did not.

Senator XENOPHON: Okay. Again, I want to emphasise that I think Australians can rightly be proud of the AFP. But in your view they were out of their depth?

Mr Sasse : That is right, and I do not think that is a criticism, in the same way that if you take another regulator out of their comfort space and ask them to look at something else they are probably not going to do it effectively.

Senator XENOPHON: I just want to move on quickly to the issue of ASIC. When were you interviewed by ASIC; on how many occasions?

Mr Sasse : I had one formal interview with them in Melbourne in November 2014 and then a further discussion with them in March this year to finalise the affidavit I referred to earlier.

Senator XENOPHON: Hang on. You see them in November 2014 and then there is a period of some 16 months before you have to finalise an affidavit?

Mr Sasse : Yes.

Senator XENOPHON: That is quite a gap, you know, between an interview and doing an affidavit, which seems to be the logical next step of an interview. Did you contact ASIC beforehand; were you in touch with them beforehand?

Mr Sasse : No. I think that really is a question for them, because I do not know when and how they got their hands on various documents. I notice in this morning's paper Fairfax has been visited by them, so maybe there is a link to what they have been doing. I cannot really answer that question.

Senator XENOPHON: Are you surprised that it took so long—some 16 months—from the time of being first interviewed by ASIC to the time you were asked to do an affidavit?

Mr Sasse : I go to my earlier answer in respect of what a good investigation looks like: a good investigation starts quickly and finishes quickly.

Senator XENOPHON: It started not so quickly and has not even finished yet.

Mr Sasse : There is your point.

Senator XENOPHON: Finally, in relation Mr Wal King—did you have any dealings with Mr Wal King while you were there at Leightons?

Mr Sasse : Not directly. I had met Wal off and on through my time in John Holland, but he was out of the chair when David officially took the reins in January 2011.

Senator XENOPHON: I think Senator Dastyari might want to follow this up, but do you have any views on the requirement benefits that were paid to Mr King?

Mr Sasse : There was some debate internally at the time that I was in Leighton Holdings as to the structure of some of those benefits.

Senator XENOPHON: What sort of debate?

Mr Sasse : There were two post-employment placements: one, which was a consulting arrangement; the other, which was a success fee for the transition to a new executive. The chairman wanted to terminate both of those. In looking at the documentation that gave legal effect to those entitlements, there were some widespread concerns as to whether or not this should have got shareholder approval before it went into the system.

In parallel with some of the work we looked at earlier with the Leighton international business—it was at that point that I was removed from the involvement in remuneration, which had previously been my responsibility and then we are in August, which was when I was kind of quarantined out of pretty much everything.

Senator XENOPHON: You asked questions about the remuneration of Mr King and then you were removed from that committee?

Mr Sasse : The then chairman asked me a series of questions, and I gave him the best answers that I could backed up with third-party legal advice. As you probably realised, the chairman left on the came day that Mr Stewart did.

Senator DASTYARI: Who was the then chairman we are talking about?

Mr Sasse : It was Mr David Mortimer.

Senator XENOPHON: Thank you.

CHAIR: Senator McAllister, you have a couple of questions, then Senator Smith.

Senator McALLISTER: Thanks for your evidence, Mr Sasse. I would like to ask you more about the relative roles of the board of Leighton Holdings, the board of the subsidiary companies and the executives, because the interplay between executives and boards is obviously critical. I do not ask you to reflect on people's motivations—you have made it clear you do not want to do that—but I am interested in factual information about what people knew. So you were providing information during the course of your employment to Dave Stewart, who was the CEO of Leighton Holdings at that time?

Mr Sasse : Yes.

Senator McALLISTER: Is it your understanding that that information was being passed on to the board of Leighton Holdings?

Mr Sasse : Without question. Some of the memoranda that I penned were to the board as a whole.

Senator McALLISTER: Right. So certainly, the holding company understood the nature of your investigations.

Mr Sasse : Yes, it did.

Senator McALLISTER: It is it your understanding that that information was communicated to the boards of the subsidiary companies?

Mr Sasse : You would not normally have the main board send that kind of information back to the subsidiary companies, because there would be no real purpose in doing so. However, I think I am going to answer your question a different way by saying: every operating company board had members on it who are on the main board. So that is, I think, where you are going, yes.

Senator McALLISTER: Nonetheless, directors' duties require the main board to properly oversee the activities of the subsidiary companies that they own. To your knowledge, what efforts were made by the main board to pursue these issues with the subsidiary companies with the board members of the subsidiary companies?

Mr Sasse : On the matters that I was involved with, there seemed to be a distinct lack of interest.

Senator McALLISTER: Are you aware of any action taken by the board to pursue these issues with any of the subsidiary companies, including Leighton international?

Mr Sasse : No.

Senator McALLISTER: You have, I think, made one recommendation from a legal perspective, or a policy reform perspective, about the obligations that you think ought to be placed on company directors to conclude investigations of matters of wrongdoing. Can I clarify whether you see that as an obligation under the criminal law or the Corporations Act.

Mr Sasse : It is an interesting question. I do a lot of work in the work health and safety space. One of the reasons why that regulatory framework is quite effective in this country is that it sits in a criminal jurisdiction. If you as a director fail to discharge your due diligence duties and there is a serious incident you can be imprisoned. That tends to focus people's minds. Working in the safety space, I find that quite helpful.

Senator SMITH: As part of the project planning et cetera there would have been risk radars and risks assessment. As part of the project management how would you categorise the understanding of risks generally and were risks around facilitation payments, briberies et cetera identified in those risk radars?

Mr Sasse : No. The group had a very comprehensive risk and opportunity analysis platform for looking at projects and bids. Obviously—

Senator SMITH: Do you mean an electronic platform?

Mr Sasse : No, a management approach, a system. Indeed, one of the group's great strengths was its ability to identify contract risk and manage it, generally. Obviously that does not have application to onshore subsidiaries. There was no policy, no procedure, no risk system for facilitation payments and the like offshore. We started drafting that in probably May, June or July 2011. So I assume it is in place now.

Senator SMITH: I notice that in 2014 the board made a decision to merge the external review committee and risk committee with the audit committee. That struck me as unusual. It was, if you like, a bit of a lead that perhaps some of the governance structures generally at the board level were inaccurate—so there was a problem not just with the board but with the structure of the board. To not have a comprehensive and dedicated audit and risk function until 2014 strikes me as unusual.

Mr Sasse : I have been out of the organisation for a long time. It is now majority owned by a Spanish company. They have put in place a very wide range of changes—divestments, mergers. What you know from the paper is all I know about what—

Senator SMITH: I am interested in pre-2014 and what your observations were. Having gone to the CEO, having written memos to the board trying to raise this issue, did you have confidence at that point in the audit and risk arrangements at the board level, or were you concerned that they were inappropriate or not substantial enough?

Mr Sasse : I was surprised at the lack of interest, the lack of support and, eventually, the fact that the whole investigative processes were shut down.

Senator SMITH: So you had confidence in the risk and audit functions at the board level up until the point that you tried to utilise, or have your concerns raised with, the board?

Mr Sasse : Yes. I was probably naive.

Senator SMITH: Who was on the risk committee at the board level when you were the executive general manager?

Mr Sasse : I would have to check that. I would not limit my comments just to the risk committee. The board as a whole was made aware of these issues in some depth.

Senator SMITH: Going back to Concorde, how did you identify them?

Mr Sasse : I had worked with them previously when I worked for a Leighton subsidiary—John Holland Group. We used them extensively to check our systems. Every year, we would give them one or two projects at random and send them in to see what they could find. They were a uniquely qualified and skilled operation.

Senator SMITH: And other Leighton groups had been satisfied with their work?

Mr Sasse : I do not know whether their client base includes other then Leighton subsidiaries but, in my view, they were perfectly qualified. They were probably one of the only organisations that could go and look at some of this Leighton international stuff and find it quickly.

Senator SMITH: And why was that?

Mr Sasse : Because the principals are two very, very experienced people who come out of construction. They know what to look for.

Senator SMITH: Industry experts.

Mr Sasse : Yes.

Senator DASTYARI: There are a few things that I specifically want to cover, and then one bigger thing generally. Mr Sasse, you spoke earlier about the retirement package that was put forward for Mr Wal King, who was the long-term CEO before Mr Stewart took over. You outlined that there were some concerns relating to that package that were expressed by the incoming CEO. Do you know if that matter was ever raised with ASIC or referred to ASIC for investigation?

Mr Sasse : Yes. ASIC did interview me about that matter. They advised me, as part of that process, that they did not intend to pursue it.

Senator DASTYARI: Then why interview you if they are telling you it was part of that process? Was it at your insistence or other's insistence? Did you initiate it?

Mr Sasse : No, they contacted me. That was one of the things that we discussed at my interview with them. In my discussion with them in March this year, when I executed the affidavit on the $15 million payment issue, they mentioned that they were not pursuing that matter further.

Senator DASTYARI: Do you know if they are pursuing the other matter: the $15 million payment? Do you know if they intend to charge Mr Greg?

Mr Sasse : They made that very clear, yes.

Senator DASTYARI: So they made it very clear that they intend to charge Mr Greg?

Mr Sasse : Yes. I was told that.

Senator DASTYARI: You were told they are going to charge Mr Peter Greg?

Mr Sasse : Yes. The reason why they wished for me to sign the affidavit was to bring the emails into evidence.

Senator DASTYARI: Are you aware of whether the handwritten note you referred to that was left for you by Mr Stewart was handed in to the authorities or ASIC or not? Are you aware of what happened to that or whether it had been previously raised? This is the note about the Iraq bribes.

Mr Sasse : Only from what has been in the press, because I had gone from the organisation. My understanding is that it was handed across to the AFP and that is what triggered that first wave of media around all of this stuff.

Senator DASTYARI: I have one very broad question in two parts: I want to ask you specifically about what was happening at Leighton at the time, and then one final, broader question. I say this as someone who has been on this committee for a few years now: what you are saying is sensational in that it outlines a culture of behaviour and conduct that goes beyond isolated incidences. But, Mr Sass, it also looks like what you are saying is that at every point of time where you or others tried to raise concerns and address these issues you were removed from being able to do so. How could that fill us with confidence in the processes that were in place, which included bringing people like you on board? When you actually start to uncover things, everything starts getting covered up.

Mr Sasse : I agree. That is ground for concern from a public policy perspective.

Senator DASTYARI: You have done in this area and internationally. One of the big issues that we are going to look at as a committee is whether or not we need to go down the path of the Americans and the United Kingdom with a Foreign Corrupt Practices Act. As you know, that the Americans have the Foreign Corrupt Practices Act, and the UK have the Bribery Act. That relates to two parts. One part of that is how documents are retained and what documents need to be retained, and the other part is about the chain of command responsibility. I do not know how much interaction you have had in jurisdictions and with companies that have had to work within those kinds of regulations, but should we have a Foreign Corrupt Practices Act in Australia, or some variation of it?

Mr Sasse : I think it is an area that needs greater regulation. What that regulation and enforcement looks like is not a question I would like to answer off the cuff. There are a lot of issues that come into this. In the light of your considerations about where you are going with recommendations and changes to policy and changes to legislation, the issue of corruption is broader than just bribes and facilitation payments, as you heard when we talked about the RORO incident. There also needs to be some mechanism and framework that ensures that that wrongdoing is uncovered and it gets some kind of consequence. That, to me, is equally as important.

Senator EDWARDS: You appeared before a royal commission late last year. That was well reported and, from all accounts—and from where I saw it—you were very credible and the evidence that you provided was relevant and true to your experience. I think they described you as 'an assiduous record keeper' in the media after that. Did those books and those notes and those contemporaneous notes ever turn up, from John Holland?

Mr Sasse : No, they did not.

Senator EDWARDS: You hear the ASIC Commissioner, Greg Medcraft, talk about culture, culture culture all the time, and it is about corporate culture. We are seeing a delinquency here which is anecdotally evident in evidence that we are getting. Given the context of what I am talking to you about, were there times at this company where you felt that there were other domestic facilitation payments or what you would consider, in the context of what we have been talking about this morning, bribes going on?

Mr Sasse : I am not aware of bribes with the Australian operations. Every now and then the operating companies have had issues with people misusing resources and assets and, in almost every case, I think the group has a very good track record in responding to and having those people prosecuted. It was the international business area where the problem lay.

Senator EDWARDS: So you never had any unusual requests from contractors or trade unions or anything for resourcing any of their businesses?

Mr Sasse : That is kind of traversing the ground of the royal commission—

Senator EDWARDS: Well, let's traverse it.

Mr Sasse : to an extent.

Senator EDWARDS: If we are talking about bribery and facilitation and everything like that, then in the context of what we have been talking about, this company has what appears to be a bad culture. Was there any kind of what you would call a facilitation payment or an enabling payment made to contractors, trade unions or that in your time at John Holland?

Mr Sasse : There were at John Holland, but I only became aware of those payments as a result of the royal commission process. The royal commission has disclosed quite a few occasions where contractors or property developers have made payments to unions. That is in the public domain.

Senator EDWARDS: For anybody who missed the royal commission, what was the use of those payments for? What would they typically be for operational issues?

Mr Sasse : In the industrial area it is essentially a permit to operate or a way of making an industrial relations problem go away.

Senator EDWARDS: Is that not a facilitation payment?

Mr Sasse : In that respect, yes, it probably is.

Senator EDWARDS: So this culture is alive and well within Australia, within John Holland—where you facilitate a payment to a union to make things go. You are a credible witness; you are now aware that that took place in your time at John Holland.

Mr Sasse : I think the answer to your question is actually the Cole royal commission, which made it abundantly clear that there are systemic failings within the industrial relations framework of the construction industry. Part of the recommendations of that royal commission were a three-pronged intervention to fix the problem, and that worked very, very effectively. If you take that three-pronged intervention away then the systemic issue will return.

Senator EDWARDS: In your time at John Holland, did you lead any discussions with any trade unions that did make a direct request for you to subsidise their operations?

Mr Sasse : Yes. I have been involved in meetings of that nature.

Senator EDWARDS: Who were they with?

Mr Sasse : With Bill Shorten, with Cesar Melhem.

Senator EDWARDS: His successor at the Australian, the AWU—

Mr Sasse : He was the his assistant when he was state secretary of the Victorian branch.

Senator DASTYARI: Just a point of clarification—

Senator EDWARDS: Excuse me. And so—

Senator DASTYARI: No, I am not going to get shooshed. A point of clarification—

Senator EDWARDS: I did not interrupt you.

Senator DASTYARI: I am asking for a point of clarification. Chair?

CHAIR: Let's have the point of clarification.

Senator DASTYARI: This is referring to evidence that you have already given to the trade union royal commission—is that right, Mr Sasse? You gave this evidence to the trade union royal commission?

Mr Sasse : Yes, I did.

Senator DASTYARI: That is all. I just wanted to check.

Senator EDWARDS: I was not at the trade union royal commission, so that is why I am interested in it here. So you, in your time, had a personal experience of being strongarmed by the trade unions to provide facilitation payments for their operations—what, for the running of cars, or 'training programs' and training programs that never got delivered? Was that your experience at John Holland?

Mr Sasse : There was one case where that occurred, which was the case that was traversed in some depth in the royal commission.

Senator EDWARDS: So this culture of facilitation at John Holland is alive and well domestically as well, as you assert, as offshore. What is the difference between a trade union strongarming John Holland and some shady character out of the Middle East doing it?

Mr Sasse : Can I just make one clarification? Of all of the major contractors, John Holland probably has the strongest track record of resisting these kinds of behaviours and issues. I do not want them coming out of this looking like—

Senator EDWARDS: No, no. That is a very fair statement, given all of your testimony against them. That is fair enough. So you reckon that they are the least involved and that that is the tip of the iceberg compared to the other activity in the area.

Mr Sasse : What I think they are trying to do is pull together what I regard as a systemic regulatory failure in the construction industry which requires a particular intervention, and I do not think that it is helpful to combine the Leighton international experience with that, because they are two quite different environments and two—

Senator EDWARDS: Okay. What if I put it to you this way: we are here trying to traverse this space of trying to get protection for whistleblowers and stronger protections in place for facilitation and bribery, yet the trade union movement is involved in it alive and well, and is actively pursuing it in this country.

Mr Sasse : Predominantly, in the construction industry.

Senator EDWARDS: Well, there you go. We have this little thing going on in Canberra at the moment called the Australian Building and Construction Commission.

Senator DASTYARI: But we do not have it going on!

Senator EDWARDS: Well, we do not have it going on.

Senator McALLISTER: On a point of order, Chair.

Senator EDWARDS: I would have expected you all to have interrupted well before now, because this is amazing in evidence.

CHAIR: Well, it is not really, because it has already been traversed on the record.

Senator EDWARDS: Well, it is. But it is called—

Senator SMITH: It is gobsmacking, shocking, horrific news.

Senator EDWARDS: Yes, gobsmacking. This is outrageous. How can this possibly be going on in this country—a first-world country?

Senator McALLISTER: I am seeking to make a point of order, Chair.

CHAIR: Senator Edwards, Senator McAllister would like to make a point of order.

Senator EDWARDS: I am sure she does, as well as all of you.

Senator McALLISTER: Chair, the terms of reference of the committee go to the legislative framework around combating foreign bribery. We have limited time—and, in fact, we are over the time allocated for this witness. Can I ask you to ask Senator Edwards to return to the terms of reference.

CHAIR: I think he has finished now.

Senator EDWARDS: I am done. I do not need to return to the terms of reference at all. Corruption is corruption, no matter what jurisdiction you are talking about.

CHAIR: I just have a follow-up question. Mr Sasse, in terms of the corruption that your experienced within Leighton Holdings and on a scale of union corruption versus corporate corruption, where would you see the balance there?

Senator EDWARDS: It is like being a little bit pregnant—corruption is corruption.

Mr Sasse : I do not disagree with the point that Senator Edwards makes. I am strongly in support of an effective corporate watchdog where there are meaningful sanctions for people who either misbehave or allow misbehaviour to occur, and do not follow it up. I am also on the record for almost 15 years supporting the regulatory framework of the ABCC, the Building and Construction Industry Improvement Act and the 2014 code, which is not in force yet.

Senator DASTYARI: On that, I just want to bring back to this. Mr Sasse, I do want to thank you for being so forthcoming with the evidence that you gave today. I know that these are not easy matters to deal with. On the cultural challenges that were seen at Leighton Holdings' international arm during your time there, again, I am asking you perhaps for an opinion; if you cannot comment, I understand. The question that we will have to be asking ourselves as part of the policy response is: through the work that you did in the investigations that you conducted and the interactions that you started having with people like Mr Kumar and others within the firm, and in looking at the specific example of the one barge, or RORO project, that led you to start suspecting more broadly, in your opinion are we looking at a couple of isolated incidences in one firm's international arm or do you think this is, perhaps, a more widespread practice and a more widespread problem than just the isolated example of Leighton Holdings international? Is this systemic?

Mr Sasse : I can only talk about my own experiences. I have only worked in the international arena with the Leighton group. I have not had any experience, or any relevant experience, with other companies offshore. So my answer to that question is really the same as anybody else's, I guess, who reads the paper. There seems to be an issue—that is the way I would answer it.

Senator DASTYARI: And the broader policy evidence you have given us today is that we need a stronger framework. We need to help the regulator in this space, the AFP. You have made some suggestions about how that can be done, but obviously that is a policy decision for us.

Mr Sasse : Yes, it is. I cannot sit here on the other end of a question-and-answer session like this and give you a coherent, structured response as to what the regulatory framework ought to look like.

Senator DASTYARI: But your personal experience is that there is a problem.

Mr Sasse : Yes, without question.

Senator DASTYARI: Deep seated?

Mr Sasse : In my personal experience, yes.

CHAIR: I have one final question. How many other executives were forced out of Leighton Holdings for exposing corruption or probity concerns? You have detailed a number. Is there a figure?

Mr Sasse : I cannot answer that specifically, but there were a number of highly regarded individuals who left Leighton Holdings in rapid succession after I did. How and why they left are questions that really need to be answered by them.

CHAIR: Thank you very much, Mr Sasse, for appearing before the committee.

Senator EDWARDS: Thank you very much. That was very interesting.