A former defence official who is alleged to have handed confidential information to a weapons maker is still working for the French-owned business despite being at the centre of a formal referral to the corruption watchdog.

Following the referral, the National Anti-Corruption Commission instructed defence to conduct its own preliminary investigation, which the ABC can reveal has been “unable to substantiate the allegation”.

The auditor-general in June alleged how in 2016 a defence employee solicited a bottle of champagne from Thales and allegedly gave the company confidential information ahead of a billion-dollar munitions deal.

He then joined the business just before it won the lucrative contract.

The Australian National Audit Office (ANAO) report detailed “unethical conduct” involving the 10-year contract for Thales to run two Commonwealth munitions facilities.

Two days after the publication of the scathing ANAO report, Defence Secretary Greg Moriarty confirmed his department had referred the findings to the National Anti-Corruption Commission (NACC).

Defence sources, along with other industry figures including Thales employees, have confirmed to the ABC that the former bureaucrat identified by the ANAO remains working for the French-owned company as an “industrial strategy advisor”.

NACC told defence to investigate using its own records

Prior to joining Thales in 2019, the official had worked inside the defence department’s Capability Acquisition and Sustainment Group (CASG) providing governance, direction and oversight for the explosive material branch.

In 2020 the Morrison government announced that the Department of Defence had signed a new 10-year agreement valued at $1.2 billion with Thales for the continued management and operation of the Mulwala and Benalla munitions facilities.

According to the ANAO’s report published four months ago, “probity risks arose and were realised during 2016 and 2017, including when a defence official solicited a bottle of champagne from a Thales representative”.

“Defence did not maintain records relating to probity management and could not demonstrate that required briefings on probity and other legal requirements were delivered,” the report dated June 25 added.

The NACC instructed defence to use records already held by the department to conduct its preliminary investigation and to then pass on any findings of improper behaviour.

“Defence completed its own internal investigation into this allegation in August 2024 and was unable to substantiate the allegation,” a defence spokesperson told the ABC this week.

The NACC said it did not comment on matters referred to it or ongoing investigations.

Thales vying for new multi-million-dollar contract

Thales Australia and its global parent company based in France have both declined to respond to requests for comment from the ABC.

However, the revelations come as the business is poised to possibly secure another lucrative local munitions deal.

At the end of October, Defence Industry Minister Pat Conroy is expected to announce a new multi-million-dollar contract to produce 155mm artillery rounds in Australia under the Guided Weapons and Explosive Ordnance (GWEO) enterprise.

Privately owned local defence company NIOA and its German partner Rheinmetall — who have recently unveiled plans to double production of 155mm shells at their facility in the Queensland town of Maryborough — are also vying for the GWEO contract.

In 2018, the ABC revealed that Thales had launched legal action against the auditor-general over a report that criticised the handling of its $1.3 billion Hawkei project for new armoured vehicles for the army.