Politically connected company won $15m government contract despite 'red flags'

Queensland's former state government awarded a $15 million contract to a cybersecurity company with political ties, despite numerous warning signs, according to a government-funded review. The company, Cryptoloc Holdings, was selected for a cybersecurity program on the eve of an election.

The review, obtained by ABC News through Right to Information laws, highlighted several critical issues. Auditors could not verify financial records submitted by Cryptoloc Holdings, which were supposedly from an accountant but lacked independent verification. A credit-check agency also alerted bureaucrats to adverse events linked to the company's founder, Jamie Wilson.

Cryptoloc Holdings was restructured shortly before submitting its bid for the tender, which aimed to help small and medium-sized businesses adopt cybersecurity measures. Despite 33 other companies bidding, Cryptoloc was chosen as the preferred supplier. The deal was finalized in September 2024, just before the governing Labor party lost the state election.

Political donations from both the founder and his businesses totaled over $320,000 to both major political parties in the four years preceding the tender, with a significant portion going to the Labor party. The audit, conducted by Grant Thornton, flagged serious missteps in the tender process, particularly concerning the integrity of the financial information provided by Cryptoloc Holdings.

Within months of the contract being awarded, problems emerged, leading to reports by ABC News. The state government eventually placed Cryptoloc Holdings into liquidation, seeking to recover almost $1.5 million that had been initially paid for the program. The audit detailed flaws in assessing the financial information's integrity, noting that the provided documents were unaudited, lacked verification, and contained multiple red flags.

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Financial documents provided by the preferred supplier were unaudited, lacked independent verification and contained multiple red flags, raising concerns about their reliability.