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Partner Ships

Richard TonkinRichard Tonkin is an investigative citizen journalist from Adelaide. His last piece on Webdiary was ASIO Appeal on Scott Parkin Verdict.

by Richard Tonkin

Shining brilliantly in Rolls-Royce's online media room is the two-week-old press kit for a great story that didn't even make it to Google News, let alone into Australian print. It's how Cheney's Men and Rolls Royce have signed a A$50 million deal with the Australian Navy to service and maintain the amphibious ships HMAS Success, Tobruk, Manoora and Kanimbla (links courtesy of RR)

In the thoughtful "notes to editors" it explains how the contract is formally titled Amphibious and Afloat Support Integrated Materiel Support (AAS IMS), and that the Rolls Royce / KBR team will be based at DoD premises at Garden Island and Defence Plaza in Sydney.

In the main text of the release we learn.

The Rolls-Royce and KBR team will reduce DoD ship costs through improved logistics management, total ship maintenance, faster response to day-to-day engineering issues and managing equipment obsolescence.

Pat Marolda, Rolls-Royce President – Naval, said: "The Rolls-Royce and KBR team look forward to creating an effective partnership with the Department of Defence. Rolls-Royce is committed to providing long-term support to navies worldwide, helping them manage costs and allowing them to concentrate on operating their ships at sea. The DoD is a forward-looking organisation which is leading the way in forming partnerships between private industry and government."

Rob Hawketts, Director of KBR Government and Infrastructure Asia Pacific, said: "KBR and Rolls-Royce have the breadth of capabilities and teaming experience to deliver the world-leading integrated material support demanded by the RAN.

"We are proud to support the RAN and look forward to working with Rolls-Royce to help the DoD reduce the logistic cost of ownership for these ships."

It turns out, going back through defence media releases, that three years ago KBR and Rolls Royce were two of the three companies short-listed for the job You have to ask why the contract took so long to announce. You could guess that the negotiation process may have become "interesting."

KBR also has a 51% ownership of the Devonport naval dockyards in England. UK pollies were questioning the yard's refitting for Trident submarines when the future of nuclear deterrence was unknown. That was before UK PM Tony Blair's announcement last week of committing Britain to using the Trident nuclear deterrent plan into the middle of the 21st century.

In Adelaide KBR have an unusually close link to naval construction. Their former Global Vice President for Infrastructure is in charge of the Naval Precinct. He runs Techport Australia, which in turn is owned by the Port Adelaide Maritime Corporation, which in turn runs the precinct. Fletcher told the Adelaide Advertiser in January that one of his aims was to "deliver a sustainable long-term defence industry base here at Osborne". State Treasurer Kevin Foley said at the time that the site would be suitable for companies involved in "civil or military shipbuilding, ship repair and maintenance, metal fabrication and module construction, paint and blast, warehousing and component manufacturers and suppliers".

I hope these smaller operators aren't trying the same rort that they used in the US. There the likes of Raytheon, BAE, Northrop Grumman and Carlyle were exposed as disguising themselves as little firms to get the kind of jobs that the former Halliburton VP now presides over.

Similarly the Australian end of the Joint Strike Fighter Project is fraught with nepotism. In this case Lockheed Martin, Northrop Grumman and BAE were allowed to select Australian companies to do the jobs. They chose Halliburton Australia, Raytheon Australia, Tenix Australia, BAE Australia and some other maybe genuinely Australian companies, and subcontracted KBR Australia to gather the parts.

As a template to how small business participation in the Adelaide Naval precinct might be structured, such a scenario suggests that contract work for the Adelaide warships and submarines should be scrutinised closely. In the US, where 23% of defence contracts are legally required to go to small to medium enterprises, the Small Business Administration discovered contracts going to such little companies as Raytheon Co., BAE Systems, Northrop Grumman Corp., Carlyle Group and Electronic Data Systems Corp. I don't know what protection we have here for the avoidance of such scams, but I'll bet a blind eye was turned by the Howard Cabinet "in order to get the jobs."

I do know that for a while it was difficult to publish in print media the fact that BAE was not only a South Australian company. I got away with it in the letters page with Halliburton, but could not, after several attempts (and a pretty good strike rate at successful publication), manage a mention that BAE were as comfortable on the UK's Salisbury Plains as on SA's plains of Salisbury. While being unable to prove a deliberate plan there was a continual implication in print media that the likes of KBR and BAE were "local boys made good" picking up international contracts. It smelled to me of deliberate deception at the time, and still does.

In the same government (Trades and Industry 2002) press release that I obtained most of the Australian "small business" info, I learned how Rolls Royce were expressing "a desire to develop Technical Assistance Agreements with some 25 Australian businesses". I'm guessing that the partnership in the amphibious ship deal was the product of such an agreement. If such is the case then KBR, by cloaking themselves in an Australian flag have in just this one deal, rorted the Australian defence contract procurement system for work to the value of 50 million dollars.

Is this why the story hasn't been printed in Australia? Are journalists digging through defence contracts having trouble differentiating between the KBRs of Australia and the rest of the world? Obviously the reason for such corporate renationalising is only to meet Australian government requirements … we all know that. However the reality, at the end of several years of defence contract signing, is that we're dealing with international corporations that only envisage Australian defence as a commodity for monetising. In this particular case there is no sense of either company being "Australian" in announcing the deal to the world. Get used to it.

The sad thing is that after falling for the sales pitch, Australia doesn't get to see what's displayed on the London Rolls Royce show room floor.


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PNAC, Lockheed, and down the food chain to Adelaide

Lockheed supply the Aegis systems for the Missile Shield Warships and have set up camp at the not-Halliburton dockyard, where they will give lots of work to "local" contractors.

Cosy enough for you?

 What a surprise to "learn" that the war(s) have been stimulated to generate defence profits. The one thing the Playboy piece doesn't mention is the CIA/Rendon Group connection to the Lockheed/PNAC generation of funds to assist the Iraqi National Congress, to which Mr Rendon gave the name.

A rose is a rose is a rose.......

And now, at the other end, we need to keep wondering who was lining up to launder the US dollars Australia was slipping into Saddam's back pocket. We can rule out the Tongan rugby team...

Aye, but wee vicious bunnies.

G'day Paul, I don't know why you said thanks either. There I go posting a link to an article that depresses you despite all the support you have given me. Thanks again, it is greatly appreciated.

I'm sure you also know of many areas where such resources could be much better directed, and the irony that if that were done there might not be the need for the development of such expensive weapons systems. Or is it that the weapons are meant to protect the US from the consequences of largely ignoring those other areas? The problem with that approach is that the asymmetrical wars the US is currently engaged in aren't exactly going their way. And with negative effects on the US in a number of areas, including on its economy in which the military-industrial complex is very important.

Perhaps there is another attraction, which relates back to  toys for the boys - who needs Playboy when there are military equipment magazines aplenty?

So perhaps instead of developing the systems someone should just knock out scale models of futuristic weapons - batteries included - and the boys in the Pentagon could keep themselves amused for hours. Even gather in conference rooms and add some mutuality.

A note on another aspect of the situation - all that money sure can be tempting and provide Richard with much in the way of shenanigans to uncover. All power to him in his endeavours.

bunnies in charge of the carrot patch

Impressed with the Playboy link,  Chris. The article promises to be good, too ( haw, haw, haw !!).

Seriously, am glad  I read it first- yes can actually read-  and then moved to Bob's link, which functioned as a nuanced corollary to the first.

To you blokes, thanks .

Buggered if I know why I said that, because both, especially  Bob's, were so depressing.

Toys for the boys.

G'day Chris, it doesn't stop at the F-35. Tom Engelhardt presents an article by Frida Berrigan on the plans for future US weapons systems.

I could think of other things that level of resources could be directed towards.

more than one way to skin a cat

G'day all.

Here's a detailed piece from Playboy (believe it or not) on the mis / adventures of Lockheed Martin.  It appears to be quite thorough.

The Joint Strike Fighter gets a mention too.

Firepower in today's Australian

Paul, I think everyone's waking up, especially after the ludicrous press conference .


Sound too good to be true? Mr Finnin called a press conference yesterday to address precisely this: speculation that Firepower might have been gilding the lily somewhat with the grandiosity of its claims. The company "strongly objects to being labelled secretive", said a press release, but journalists left the conference none the wiser.

Not even the barest of details of a mooted joint venture with Shell, a technical agreement with General Motors, and technology tests with GM, Volvo and TUV were forthcoming. Nor were the identities of Firepower's major Australian customers or investment banks, global revenues, earnings.

Despite his efforts to debunk claims of secrecy, Mr Finnin was unable to furnish any proof of Firepower's technology, any scientific work or even put on show the revolutionary pill itself.

The enigmatic Perth-based founder and major shareholder of Firepower, Tim Johnstone, was not at the press conference to answer questions about his relationship with colourful West Australian entrepreneur Warren Anderson.

"There is a rising demand world-wide for our product," said Mr Finnin, who met the principals of the infamous Jordanian trucking company Alia when he was an Austrade executive in 2003.

According to the Australian, it's not even patented!  Apparently this would reveal its secret ingredients.  Bloody good thing Alexander Bell didn't think this way about the phone.

Perhaps those who think there's nothing in this situation might begin to realise the ramifications.

The  company and its products have been championed by the Australian Trade Commisssion.  One of Austrade's most senior representatives now runs the company.  There are direct links to the handlers of Saddam Hussein's bribe money.

Worse - while Foreign Minister Downer says that he only became aware of Alia "within the context of the Volcker inquiry" it seems that, well before this time, one of his most senior representatives was having a cuppa with its owners. 

We already know from a report in the Australian last year that Ausaid have no protocols for bribery allegations. Now Austrade's protocols need a look at.   I would more expect Peter Foster to be involved in this than Alexander Downer.

We're not doing a good job of showing our trade skills to the world at the moment, are we?

Superficially this might look farcical, but it's actually a very, very serious situation.

Maximising Your Firepower

Paul, some ruminations I scribbled last night:

A convoluted trail is emerging that involves allegations of Russian-based international money laundering, direct government dealings with the administrators of Saddam's Australian wheat bribes, and a government representative taking up a position in a cloudy corner of the corporate world.

The Australian Trade Commission has published claims made by Firepower, a Perth-based company that its technology provides reductions of environmentally harmful emissions of thirty to sixty percent. Firepower claim they've been checked by "several world leading independent testing institutes" but don’t say who they are. Austrade refer to testing carried out in Russia ... though the sources of the testing are not mentioned on the company's website.

The allegations of corruption directed at Firepower's Russian emissary would be, you'd think, enough to raise a "red flag". Here's the SMH background on him:

He was photographed at a White House fund-raising dinner with then-president Bill Clinton in October 1993, but the claims did not stop. The Times repeated allegations that Nordex may have been involved in the smuggling of nuclear material.

The newspaper also accused Luchansky of being linked to one of the world's biggest money-laundering investigations - an alleged plot to launder $US7 billion in Russian organised crime proceeds through the Bank of New York.

If the Australian Trade Commission reckon that Australian technology is a way for Russia to fulfill its Kyoto Protocol obligations why hasn't our government been extolling it's virtues as much cheaper way of becoming environmentally friendly than, say, nuclear reactors?

The sole (virtually anonymous) testimonial on Firepower's site claims that by buying a fifteen dollar pill pack you'll profit by $37 through petrol savings. I assume you spend $15 on another pack, and through this cycle continue to generate twenty dollar surpluses. Anyway, it's the only endorsement they provide, and without even providing the author's name. There's nothing to back up the massive emission reduction claims, not even from Russia.

Firepower's page on corporate information consists of a whole three paragraphs. I would have thought that DFAT's trade arm might prefer a company that they're endorsing so highly to have a little more public information.

Austrade's director for Europe, the Middle East and Africa has become Firepower's CEO. Forget about where he went for a minute - what’s interesting here is that John Finnin was talking to Alia after Saddam was deposed. This means, at the very least, that Downer's Department was in direct contact with the bribe-handlers well before the UN Oil-For-Food Inquiry.

There is one important line of inquiry that needs to be eliminated ... the one hypothesising that a government representative was using a government agency to "fund raise" for his own commercial interests while promising to line Saddam's pockets with profit from money that was known to be ill-gotten. Also, borrowing from Michael Pascoe's question on Crikey yesterday, how much, if any, due diligence did Austrade do before getting into bed with the Firepower mob? Also, how much did Austrade know about Firepower's Russian liaison's exposure to allegations of massive amounts of money laundering? You could be excused for thinking that the whole thing was a very dodgy situation. Why didn't any relevant official raise suspicion?

For any government department to not have appropriate checks and balances in place to avoid such scenarios would be disconcerting. To give any organisation $400,000 in export grants while such questions were unclarified would be scandalous.

Mr Finnen will answer questions regarding his interaction with Alia at a media conference today.


The SMH does have a follow up on Firepower today. Gerard Ryle authors it and is apparently a current affairs/features editor there, so serious journalism is involved, by the look.

Googling, I stumbled straightaway onto an old (505) Margo Kingston SMH Webdiary thread piloted by Craig Rowley, on a feature by Ryle and Lisa Pryor detailing the government's refusal to respond concerning a large number of House and Senate enquiries involving issues like DIMIA, SEIVE X, Collins and other whistle blowers, legal changes denying journalistic privilege as to sources, bullying within the public service and regional rorts.

Fascinating and great to see the luminaries present and not so recent participating, including Margo Kingston herself, and read what they were including.

On reading Ryle's latest report though, am wondering if there is not some sort of giant leg-pull going on.

They have to be collective joking and the facts need to come out sooner not later.

 One thing, it has the stench of AWB about it, for sure!

the "disappeared"

Richard, probably should pop in for visit since you are local, but wouldn't trouble you at a busy time.

Basically, a newspaper report since "disappeared", I think in a Fairfax paper today, about some mysterious huge corporation ("Firepower"?) that nobody can find existing anywhere, except possibly in some West Indies haven. All sorts of celebrities have shares in it, but no one knows where to buy shares. The report focussed on the government handing grants to it hand over fist, despite the fact that it doesn't seem to "exist".

Something rings a bell and sure the article was also on about ordinance procurement.

Reminded me of another odd story that turned up in the Age a couple of weeks ago. It disappeared really quickly also, but was asking what had happened to the minor sum of $3.8 BILLION that the Defence Dept can't account for in its spending, as to its paperwork. A friend thought it would be to do with all the money they've wasted in Afghanistan, Iraq, "Pacific Solution" etc, but I wondered if it was to do with so many bodgy procurements deals.

These titbits come and go quick and there seems always very little explicatory follow-up commentary or questioning from oppositions as to what the significance of it all is.

Wouldn't have thought twice, but your articles (sometimes with Craig Rowley) in the past have informative and concerning and am tempted to try you for a "bite".

Are we being "bled" in an alternative way because we don't have so many troops offshore?

Biting something fishy

Paul, actually it's more of a spring cleaning time as you'll see.

I bit, and had a look, and resultantly was up reading and searching most of last night. The proverbial can of worms looks watertight by comparison to this one. I'll return with something later. This might be the iceberg of which the Cole Commission stuff was the tip.

Good to hear from you. You've got my number... give me a ring and we'll arrange to catch up asap.

much thanks.

Thanks for responses. You astonish me, 'nuff said?

You know, my mother is gravely ill and I had to help her out today. Once again the public transport system couldn't function even at a basic level, yet $billions is "disappeared" - unaccounted for- and apart for one or two people who the system seems to want to muzzle, the whole country seems to remain in this narcoleptic stupor.


Most of the same companies involved in the Adelaide project are now circling KBR in the UK for the submarine work.   BAE, whose Australian headquarters is already in Adelaide, has emerged as a likely contender.  Other possibilities tipped include General Dynamics, Boeing,Thales, Lockheed Martin, and of course Carlyle.   Any of these would be able to co-ordinate small-to-medium shipbuilding subcontracts at the drop of a hat.

So far there's been no comment from Brendan Nelson as to KBR's ability to fulfill Australian defence contracts, especially regarding such an internationally important constructs as the AWDs.   You'd hope DoD are closely monitoring the actions of its UK counterpart, and ensuring that those given Australian work will definitely be able to carry it out.

Rolls Royce to build naval shiplift in Adelaide

You'd think after writing this piece I would've kept an eye on this site wouldn't you?  In my defence who could have known that RR were about to announce a "small beer" contract in Adelaide.  They're building a $50 million shiplift for the ex-KBR boss at the Port Adelaide Warship Dockayard.  It will be capable of being enlarged to handle ships the size of US Armoured Division Carriers.

RR say they will be teaming with "a variety of South Australian businesses" do the job.   Let me guess... Raytheon South Australia, BAE South Australia, KBR South Australia?

Mr Pat Moralda, in charge of RR's naval work, compared the signifigance of the event to the recent "key milestone" of the KBR partnership. 

The dredging of the Port River was announced around November of 2005, the action feted as a trade booster, though nothing about naval work was mentioned. 

The Environmental Impact Statement for the Osborne Maritime Precinct was prepared for the SA Government by KBR.  It's not online anymore, but I don't seem to remember it containing any statistics for environmental damage caused by attacks on US warships in our waters.  Then again, how could KBR know about the requirements RR might have for expansion?

Oh, that's right... they're  partners.

Partner Ships in stormy waters

Paul Walter, by the looks of the news from the UK over the weekend, we're not alone in sharing your sentiment.

 From the BBC

There is speculation that two major defence companies could bid to take over Plymouth's Devonport Dockyard.

The news comes amid an unresolved row between the Ministry of Defence (MoD) and the US owners of the yard, KBR

The MoD is considering taking away KBR's contract to operate the yard after fears it may not have adequate funds after a share flotation ...

Bill Currey, before we get to an interesting conundrum, back to this:


Media Release
The Hon Ian Macfarlane, MP

23 October 2002

There’s good news in the mail for at least nineteen Australian companies who can expect to receive Letters of Intent from the proponents of the global Joint Strike Fighter (JSF) program this week.

Now scroll down the companies to Halliburton KBR ACT

Am I correct in assuming from this that the Federal Department of Industry, Tourism and Resources believed the company to be local?

 And, worryingly, from Ausaid:

Media Release

Parliamentary Secretary to the Minister for Foreign Affairs
The Hon Chris Gallus MP
24 September 2002

South Australian Companies Win Major Aid Contracts

South Australian based companies continue to win a big share of contracts under the Australian Government's overseas aid program....

URS Asia Pacific, also based in South Australia, holds more than $50 million worth of contracts with AusAID and Halliburton KBR Pty Ltd just over $19 million.

So a minister representing DFAT believes they're local too.  At the very least, the sentiment belies the way the story was written up by the bloke who handled most of the local warship deal print media. 

From Eurocopter.com

Based in Canberra, KBR have been running the ARH Tiger Training program on behalf of Australian Aerospace..

I doubt Eurocopter thought KBR were Aussies, but again it looks that way on paper.  Australian Aerospace, however, convey the impression in their media release for that project that they believed KBR as local as Four'n'Twenty pies and, er, Raytheon.

Mr Saporito said Australian Aerospace and its local partners including ADI, KBR, Raytheon Australia and Thales Training Simulators will provide major components, mission systems, electronics, flight training facilities, training and maintenance for the helicopters.

In  another set of "notes for editors" in 1999 the company was portrayed this way:

Kinhill Engineers, owned by the Halliburton/Brown and Root Group, is the largest engineering company in South Australia and has over 20 years of experience in the Cooper Basin. In addition to engineering, Kinhill can call on Halliburton’s vast experience in drilling, well testing, completions and post-production stimulation.

A couple of years later  Kinhill's "boss" Malcolm Kinnaird was, at the behest of the Australian government, reorgansing defence procurement in a way that seems to have suited his business interests very well.

Bill, KBR haven't needed to market themselves as locals.. there's been plenty of others, it seems, whose interests have been suited by doing so.

Back on the headline story, it appears that KBR have pushed the UK's Ministry of Defence too far:

The speculation comes a month after the MoD tried to block a share flotation by KBR.

The firm was asked to delay the launch - or risk losing its contract to operate Devonport, western Europe's largest naval port.

There were concerns that Devonport might be compromised by the listing.

The dockyard - the only place capable of refitting and refuelling the country's nuclear submarine fleet - is owned by Devonport Management Limited, in which KBR has a controlling 51% share.

Before the listing, the British Government said it feared that once KBR was separated from parent oil services firm Halliburton, it might not have adequate funds to run Devonport effectively.


As you say, Bill,  $50 million deals are fairly small beer.  However, that amount of money can have a dramatic effect on a company's profit and loss situation.  For example, KBR's:
First quarter of 2006 results were impacted by a $30 million impairment charge and loss recorded on an equity investment in an Australian railroad operation due to delays in the expansion of the Port of Darwin and and a delay in mining operations that reduced freight

Now, if the Australian DoD has similar fears to the UK MoD and effectively cancel KBR jobs (not that there's anything  here yet quite as profit-denting as losing the Tridents, but Adelaide might seem less of a "uranium mine")  it might put a bit of nappy rash on the newly-listed company's bottom line.

If KBR loses Devonport then their Global Naval Division, based in England,  may take a financial blow.  The loss of the contract in the UK, if the MoD is correct, might create a flow-on effect in which the company, now independent of Halliburton resources, might not be able to deliver the goods in Australian military deals.

Then there's the fact that Defence are dealing with a company that's already known to have attempted using bankruptcy laws to escape litigation. Knowing this can't be helping quite a few people's sleeping patterns.

You'd think that certain members of the Australian cabinet may be making a few phone calls at the moment.  In fact, you'd be surprised if Downer didn't have a chat to Cheney about it last week.

Any Significance in This?

Really can't see why you think this ought to be of much interest to the media. A $50m maintenance contract is fairly small beer anyway - government departments tender and award contracts of this sort of size all the time. None of your facts, or allegations, about sundry Halliburton businesses overseas seem to have any particular relevance to this contract.

You seem to be suggesting that KBR/RR won the contract by misrepresenting themselves as small local businesses - but the extract from their press release makes no claims along those lines at all. In any case I am sure the DoD are well aware who KBR and Rolls Royce are!

Craig R: Welcome to Webdiary Bill.


But you can see how far the skim from a bunch of $50m would go with the defence attaches or governments of second string countries, Bill.

Twenty contracts and you’ve got a billion, sport. Tons of lovely "consultant" moolah there.

There’s a whole bunch of retirees from the Wheat Board/BHP Billeton who can sort it, through Liechtenstein, no sweat.

And you can see why it was necessary for Cabinet to send Pooh Bear to Washington and Colorado with Nelson, to make sure the Dr kept singing from the same hymn sheet and didn’t start talking bulkbilling.

Alex can’t do much, apart from shit and sleep, but as an Adelaide Club Old Boy, he knows how to twist arms. Or arms deals.

And I mean, you wouldn’t want a chronic dumb f*ck like Kevin Andrews limping along when the issue of the Joint Strike fighter came up, would you? He’d probably get a shiver up his spine, invoke WorkChumps™, and have all the Yanks arrested when they claimed to be Republicans AND in the Union. Keep The Boss happy.

Thank God Kevin could be going on 7’s Dancing with the Wolves, twostepping-goosetepping with Mark Latham and Glenn Milne. My bet is that Latham, despite suffering a life-threatening illness, will snot the pair of ’em. The show promises to deliver a cross between the Walkleys, Strictly Ballroom and the Golden Gloves. Seven will clean up bigtime. I imagine the other stations, especially the Shopping Channels, will just run the Test Pattern (rpt), or footage of Naomi’s mock funeral at sea for her over the shoulder fashion statement-cum-goanna, Steve II.

Brig Gen (Ret’d) Frère Jihad Jacques OAM née Woodforde™,
by Appt to Colt, Lockheed and DuPont;

Gen Jacques certainly had absolutely NOTHING to do with the death of HRH Princess Diana, by the way. He’s saving those rocket launchers, along with a pile of .50 cal Barrett rifle ammo, to whack Kirribilli from a high speed runabout on New Year’s Eve, at the peak of the fireworks.

You read it here first.

The viewpoint from the Opera House sea wall should offer something to tell the grandchildren.


I wonder at the Devon dockyards. This facility would be an Aladdin's Cave for KBR dickering around aboard hi tech British ordinace.

The symbolism is ugly and says, "we  micro manage you and your life, but now from the inside...we can suck your guts out."

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