The Queensland government has questioned how the former Labor administration increased an ultimately disastrous cybersecurity contract by $10 million in the months before the deal was awarded to a politically connected technology company.
Cryptoloc Holdings won a contract in September last year to provide cybersecurity assistance to Queensland small businesses, with the successful tender announced the day before the state government entered caretaker mode for the election.
The contract turned haywire after the ABC in November revealed serious financial problems surrounded another company linked to Cryptoloc. The state started asking questions and cancelled the contract in January this year.
In an estimates hearing in parliament on Friday, Open Data Minister Steve Minnikin of the LNP blamed the previous Labor administration for the contract.
Steve Minnikin has blamed the Cryptoloc saga on the former Labor government. (AAP image: Darren England)
Mr Minnikin also raised the issue of Cryptoloc entities having donated money to Labor events, but did not mention the LNP had also been a donor recipient.
“The [previous] government announced the awarding of the cybersecurity tender just hours before the election caretaker period began,” he told the estimates hearing.
“It took one briefing … from my department, within a week or two of me taking office, for me to realise that something just wasn’t right.”
Cyber entrepreneur files for bankruptcy after government contract collapse
He said there was an “amber flag” alongside the company’s ability to make ongoing payments.
Mr Minnikin, who submitted an article from the ABC and The Courier-Mail, also questioned how the Labor had in 2023 initially allocated about $5 million to the proposed cybersecurity project.
But Mr Minnikin argued then-Treasurer Cameron Dick had upped the amount by $10 million in the next Budget in 2024 to total $15 million.
This was flagged in budget papers as being part of creating “a thriving, resilient small business sector”.
Mr Minnikin argued there were “questions that need serious answers from opposition members”.
“The release of Labor’s last budget brought the total commitment to $15 million, and that’s less than four months before announcing the contract.
“It just doesn’t add up.”Do you know more?Contact Liam Walsh at walsh.liam@abc.net.au
An opposition spokesman on Friday said the budget increase was to support cyber security for small business with procurement delegated to the department. It has previously also maintained the department independently awarded the contract and donations did not influence the tender.
The state had advanced $1.9 million in an initial tranche to Cryptoloc Holdings under the contract.
But the state cancelled the project after complaining that Cryptoloc Holdings had not adequately answered questions. The government then tipped the company into liquidation, seeking the reimbursement of almost $1.5 million in advanced funds.
Jamie WIlson has declared bankruptcy and denies any wrongdoing. (Supplied)
As the ABC revealed last month, Cryptoloc’s founder Jamie Wilson has now declared himself bankrupt.
He declined last week to speak on camera when the ABC tracked him to an address in southern rural Queensland, but he denied any wrongdoing and said the company had been performing to the contract’s requirements.
The liquidator of Cryptoloc Holdings has flagged a probe into how state government money was transferred from the contract-winning cybersecurity company to Mr Wilson’s bank account within 24 hours of the funds arriving.
In a report to creditors, liquidator Nick Combis of Vincents said this was under investigation as a potential fraudulent transaction. Mr Wilson denied any wrongdoing in relation to the transfer, saying an offset existed.