Former senior defence adviser now heading French sub builder (Australia)

NEWS CORP AUSTRALIA NETWORK ^ | May 15 2015 | IAN MCPHEDRAN

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EXCLUSIVE: A former senior government adviser who enjoyed privileged access to top-secret information about the navy’s future submarine project has taken a high paid job with one of three foreign contenders for the $20 billion plus contract.

Sean Costello was chief-of-staff to former Defence Minister David Johnston and left his $250,000-a-year government job in January this year. He began work in April — just four months later — as Chief Executive Officer with French Government shipbuilder DCNS Australia.

The firm is engaged in a “competitive evaluation process” for the Navy’s future submarine contract alongside Germany’s Thyssen Krupp Marine Systems (TKMS) and Japan’s Soryu Class boat.

The build contract is the biggest in Australian history and will exceed $20 billion.

During his time with Senator Johnston, who was sacked last December, Mr Costello was intimately involved in the government’s deliberations over the planned project and even went on board one of the highly secretive Japanese boats with his former boss.

He was also caught up in the scandal involving excessive taxpayer funded restaurant bills used to wine and dine defence industry types that led to the minister’s demise.

The ex-navy submariner is also a former senior executive with the Australian submarine firm ASC where he was a vocal advocate for an Australian designed and built future submarine to replace six Collins Class boats.

A well-placed defence source last night questioned Mr Costello’s new job.

“He was closely involved in matters relating to submarines right through and there are legitimate questions to be answered,” the source said.

Mr Costello told News Corp Australia that he had satisfied all the public service guidelines regarding his transition and was “hugely excited” with his new job.

“I can assure you there is no conflict of interest whatsoever and no one has expressed any concerns at all to me,” he said.

“People can use you as a puppet but I left before the competitive evaluation process began.

“I have worked in this area [submarines] for 20 years and no one has ever raised a black mark against me.”

Senior military officers (above Colonel) and top defence officials are explicitly banned from working with defence companies for at least 12 months after they leave the service.

For example the former senior defence purchasing guru Warren King who recently retired is on 12 months “gardening leave” before he can take up any defence related activities.

A spokesman for Special Minister of State Michael Ronaldson said the rules regarding the employment of Members and staff do not regulate post-Government employment of the individual under the MOP(S) Act.

However the Lobbying Code of Conduct introduced by the Howard Government lists strict conditions for former ministerial staff.

“Persons who were, after 1 July 2008, employed in the Offices of Ministers or Parliamentary Secretaries under the Members of Parliament (Staff) Act 1984 at Adviser level and above, members of the Australian Defence Force at Colonel level or above (or equivalent), and Agency Heads or persons employed under the Public Service Act 1999 in the Senior Executive Service (or equivalent), shall not, for a period of 12 months after they cease their employment, engage in lobbying activities relating to any matter that they had official dealings with in their last 12 months of employment,” the code says.

The Defence Department said that Mr Costello was bound by the confidentiality provisions of the Crimes Act.

It also said that former members of the Australian Defence Force taking up jobs with private sector organisations were required to consider “perceived or actual” conflicts of interest and inform both Defence and their prospective employer. There are also legal restrictions on disclosure of official information.

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Source: NewsCorp