The Bizarre Story Of How $444m Was Given To An Obscure Reef Group

"Taxpayers’ money has been given away without process, probity or policy justification"

Nearly $450 million was gifted by the federal government to a tiny environmental charity focusing on the Great Barrier Reef -- but nobody can really explain why.

It's turning into quite a political saga, with revelations the group is linked to climate change-denying donors to the Liberal Party, and the money didn't go through the normal tender process.

Labor said the "cash splash" was lavished "without process, probity or foundation", and the opposition is already calling it 'Reefgate'.

What is the Great Barrier Reef Foundation?

The group, which had just six full-time employees at the time of the massive funding injection in the May federal budget, is a small and obscure charity that almost nobody had heard of until a few months ago.

Its board of directors include current or former employees of AGL Gas, Origin Energy, Rio Tinto, BHP Billiton, Boeing and Qantas, while the Chairman's Panel has links to Orica, Peabody Energy, and Shell.

The foundation says it "started with a small group of businessmen chatting at the airport while waiting for their flight" in 1999.

However, that story seems to be a bit of a creative flourish.

The foundation said its mission is to find "real solutions to the threats facing Australia’s great natural wonder and coral reefs globally", and to "ensure a Great Barrier Reef for future generations".

But while the group has business heft, the process by which a tiny group which reportedly had just $8 million in turnover in 2017 scored $444 million in the budget is still murky.

What is the $444 million for?

The group was tapped to administer funding for reef projects including action on the crown of thorns starfish outbreak, pollution and work to mitigate effects of climate change. The foundation has been given the massive funding to dole out grants to other organisations like the CSIRO, the Great Barrier Reef Marine Park Authority, and the Australian Institute of Marine Science -- not the usual way of doings things, with the department usually responsible for such funding allocations.

(Getty Images)

"We didn’t have much time before the announcement to be prepared for it," chief executive Anna Marsden told Fairfax in May.

"It’s like we’ve just won lotto - we’re getting calls from a lot of friends."

She told Fairfax the unexpected funding, which the formerly small and obscure foundation did not apply for through the normal tender process, "may make us the largest environmental NGO in Australia".

So why did they get the money?

It's not exactly clear. Even Marsden said the foundation was flabbergasted.

“I’d like to state for the record that the foundation did not suggest or make any application for this funding. We were first informed of this opportunity to form a partnership with reef trust on the 9th of April this year,” she told a Senate inquiry hearing this week.

When asked who contacted the foundation to offer the money, she said it came in a small, private meeting with Prime Minister Malcolm Turnbull and environment minister Josh Frydenberg.

"It’s still not clear to us how it came to be that the prime minister felt that he could meet with this foundation and offer them $443m of money,” Labor senator Kristina Keneally said during the hearing.

It has also emerged that the money has already been distributed into  the foundation's bank accounts, collecting interest in term deposits, Labor MP Tony Burke said.

Minister Frydenberg defended the funding decision on the ABC's 7.30 on Thursday, saying "my department, including my secretary, have had more than 20 meetings since early April with the foundation".

However, Burke countered by saying "none of these meetings took place before the Prime Minister personally met with the Great Barrier Reef Foundation" to offer the money in April.

Turnbull also defended the spending on Friday, saying the foundation "is an outstanding organisation" and the funding process "has been done completely transparently."

Now what?

Labor have said they will pursue the funding further.

"There was no tender process for the donation and the foundation never applied for the money. The Prime Minister was present at the meeting with the foundation and he personally told the chair, Dr John Schubert about the donation. It appears no public servants were present," Burke said this week.

"All the probity checks and balances which ordinarily apply to expenditure by government agencies will not apply to spending decisions made by the foundation."

"Effectively half a billion dollars of taxpayers’ money has been given away without process, probity or policy justification. The future of the reef should not be determined behind closed doors by Mr Turnbull’s mates."

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