Palaszczuk blindsided by latest integrity crisis

A COMPANY part-owned by Annastacia Palaszczuk's right-hand man received $267,500 in taxpayer funds to develop a smartphone app, sparking a fresh integrity crisis for the Government.

The Premier yesterday agreed to an audit of how Fortress Capstone, of which her chief of staff David Barbagallo is a director and shareholder, came to successfully obtain the money through a lucrative government-run investment fund to develop an app for cruising tourists.

The commitment came after Ms Palaszczuk was initially blindsided by Opposition questions on the funding during yesterday's Budget Estimates hearing at state parliament.

Premier Annastacia Palaszczuk’s chief of staff, David Barbagallo. Picture: AAP Image/Jono Searle
Premier Annastacia Palaszczuk’s chief of staff, David Barbagallo. Picture: AAP Image/Jono Searle


The Premier has said no government representatives were on the panel which decided on the investment, while a government spokesman said Mr Barbagallo had withdrawn himself from the application process before becoming chief of staff.

LNP Leader Deb Frecklington called for an investigation, declaring the awarding of money to a company linked to one of the government's most powerful men did not pass the pub test.

"Queenslanders have a right to know why the Palaszczuk Labor Government wrote a six-figure cheque for David Barbagallo's business," she said. "What integrity tests were applied - if any - and what happened to the money?"

Fortress Capstone received $267,500 from the $80 million Business Development Fund last year to develop the CruiseTraka app.

Queensland Premier Annastacia Palaszczuk speaks during estimate hearings at Queensland parliament in Brisbane, Tuesday, July 23, 2019. (AAP Image/Jono Searle)
Queensland Premier Annastacia Palaszczuk speaks during estimate hearings at Queensland parliament in Brisbane, Tuesday, July 23, 2019. (AAP Image/Jono Searle)

"CruiseTraka (Fortress Capstone Pty Ltd) is a smartphone-based solution used by passengers to share their cruise experience with family and friends back home in almost real time via social media and email," the Business Development Fund's website states.

The fund - established under the Government's Advance Queensland scheme - awards businesses between $125,000 and $2.5 million to develop their ideas, with the Government becoming a co-investor in the business in exchange for the cash.

Company records show the fund became a shareholder in Fortress Capstone in February 2018. Mr Barbagallo has been a director since 2007.

Ms Palaszczuk was initially unable to say if she had been made aware of the investment when questioned by LNP Leader Deb Frecklington.

Queensland opposition leader Deb Frecklington. Picture: AAP Image/Jono Searle
Queensland opposition leader Deb Frecklington. Picture: AAP Image/Jono Searle

But she later clarified Mr Barbagallo - a longtime Labor figure who rose to prominence in party circles while working for the late Wayne Goss - had informed her the company had been successful. The audit of the awarding of the funds will be undertaken by Ms Palaszczuk's director-general.

A spokesman for the Government said initial talks regarding the application began in 2017, before Mr Barbagallo took the chief of staff role. He said the full application was made after his appointment to the role. But he insisted Mr Barbagallo had withdrawn himself from the process at that point "as soon as he was employed by the Premier".

"The investment is in the company, of which the chief of staff is one of approximately 20 shareholders," he said. "As outlined on the fund's website, any amount invested in a company is a consequence of a decision made by the independent panel with no government or ministerial input. Just like when a private entity invests in another private company, it is not a grant or a loan - it is an investment which results in a share of the company and (its) profits."

Queensland Premier Annastacia Palaszczuk. Picture: AAP Image/Dan Peled
Queensland Premier Annastacia Palaszczuk. Picture: AAP Image/Dan Peled

Ms Palaszczuk said a panel of private investors were responsible for deciding which businesses should benefit, with no government representatives on the panel.

"The chief of staff filled out his pecuniary interest register in accordance with guidelines," she told the hearing.

"The chief of staff sought Integrity Commission advice. The chief of staff advised me last year that a company had been successful and all measures were in place. For completion, the DG will conduct an audit. No decision was taken by a minister in relation to it. It has been at arm's length. I am happy, for clarity, to do an audit to ensure that all processes were followed. I know the chief of staff is absolutely rigorous in making sure that processes are followed."

The Premier's office could not say last night if Mr Barbagallo's pecuniary interest register would be released.

Mr Barbagallo is known in Labor circles as a Mr Fix-it as well as a political headkicker. He was one of many Labor figures embroiled in the 2001 Shepherdson inquiry into electoral fraud. He was fined $1000 over the enrolment scheme.