By Tess Ikonomou and Dominic Giannini in Canberra

Dodgy companies suspected of bribery and money laundering won huge government contracts under the nation’s offshore processing system.

Home Affairs Minister Clare O’Neil on Monday released a report by former ASIO boss Dennis Richardson into the history of offshore processing contracts.

The review looked at allegations the Department of Home Affairs used contractors to deliver regional processing services that were suspected of misusing taxpayer money in Nauru and Papua New Guinea.

Mr Richardson excoriated the department’s processes for entering contracts.

“Proper due diligence was lacking when it came to contracts with relatively small companies with limited or no public profile, and where operations were to be in high risk environments,” he said.

This resulted in Home Affairs having contracts with a company whose owners were suspected of seeking to circumvent US sanctions against Iran and with suspicious money movement suggesting laundering and bribery.

Companies under investigation by the AFP also had contracts with the department, as did a company whose CEO was being investigated for possible drugs and arms smuggling into Australia.

Greens senator Nick McKim described the findings as “egregious failures” and flayed the department for incompetence as he renewed called for a royal commission into offshore detention.

The report found “even with access to the information available within government agencies, Home Affairs may have had no option but to enter into contracts with these companies”.

“Certainly, the department was operating within an environment of high pressure where time was often of the essence,” it said.

“However, with proper due diligence, Home Affairs could have considered alternative suppliers, and, if this was not possible, the implementation of mitigating measures.”

Regarding the regional processing contract with Management and Training Corporation, it found the government “could have confidence in the existing contract”.

The company had been paid more than $420 million as at August 30, 2023.

The report found no evidence of ministerial involvement in the regional processing contract or procurement decisions.

No individuals were referred to the Australian Federal Police or the National Anti-Corruption Commission.

The contact details of three people were passed on, with their consent.

But Ms O’Neil said the review left the door open to potential criminal investigations by the AFP.

She blamed Opposition Leader Peter Dutton, who was the former home affairs minister, questioning what he knew about criminal activity and when.

“The Australian Federal Police and where appropriate, the National Anti-Corruption Commission, will investigate those claims,” the minister said.

The opposition questioned why Ms O’Neil received the report on October 10, 2023, but only released it on Monday.

Coalition frontbencher James Paterson also noted the review found the government could have confidence in the existing contract and didn’t identify any deliberate wrongdoing.

The department dealt with historic problems in contracts and learnt from past mistakes, Home Affairs secretary Stephanie Foster told a Senate committee hearing.

“At the risk of sounding glib, this is an area where we should always be vigilant and should always be seeking to make improvements,” she said.

The review made four recommendations, one of which was redacted.

One recommendation called for the department to beef up its integrity risk process and culture to better inform procurement and contract decision-making for regional processing arrangements.

This should be done by more carefully considering the environment in which a procurement is conducted or a contract is delivered, and the ethical conduct of tenderers, suppliers and supply chains.