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The Australian - ALP network and the $1bn deal
Two Labor-linked firms employed by US-based company PsiQuantum helped the private tech business facilitate nearly $1bn in taxpayer funds to build the world’s first fault-tolerant quantum computer in Brisbane, amid concerns about the government’s selection process.
Brookline Advisory lobbyists Lidija Ivanovski and Gerard Richardson – who worked as chief of staff for Labor deputy leader Richard Marles and communications director to Jim Chalmers respectively – have emerged as key players in securing the government equity and loans package.
On May 12 last year, the veteran Labor operatives listed PsiQuantum as a client on their federal lobbyist register.
PsiQuantum also commissioned Mandala – an economics, strategy and policy consulting firm with links to Labor MPs including Andrew Charlton and Bill Shorten – to prepare a report promoting the benefits of building a quantum computer for Queensland and the nation.
Mandala managing partner Amit Singh worked as a senior economic adviser for Kevin Rudd and Julia Gillard between 2010 and 2013. He also served as deputy chief of staff and director of policy for Mr Shorten when he was opposition leader between 2014 and 2016 and was employed as a senior adviser and managing director of AlphaBeta, which was founded by Mr Charlton in 2015.
Anthony Albanese on Tuesday announced that $470m in equity and loans would be provided by the commonwealth and Queensland governments for PsiQuantum, saying that he wanted more Australian “innovation and our smarts to deliver benefit for us here and then, of course, to transfer that to the world”.
The Prime Minister said the announcement represented a “quantum leap” into the future of technology. But there was no further detail on whether the 400 jobs to be created would be for Australian or American workers, what the jobs would be, over what period the investment would be provided or how much of the $470m was equity and how much would be loans. A fault-tolerant quantum computer is yet to be developed and likely won’t be until at least 2029.
Industry and Science Minister Ed Husic said it was a “strategic investment” separate to any decision taken by the $15bn National Reconstruction Fund. Opposition science spokesman Paul Fletcher said there were “serious questions Labor needs to answer about why there was no open, publicly announced, transparent expression of interest process to choose a company to receive this significant amount of taxpayer money”. “To allocate such a large amount of funding through a secretive process with only a handful of participants is a very curious way to proceed,” Mr Fletcher said.
Ahead of Tuesday’s announcement, PsiQuantum had employed at least three lobbyist firms: Brookline Advisory; the Liberal-aligned CT group from April 4; and Akin Agency from November 13. Akin, which lists the Tech Council of Australia among its clients, provided media training services.
The Tech Council, which has a mission to build a quantum industry in Australia, is chaired by Robyn Denholm, who is also a partner in venture capital giant Blackbird, a major investor in PsiQuantum. The Australian understands Brookline Advisory helped PsiQuantum’s offshore executives engage with federal government offices. The US company hired the lobbyist firm following a visit to its Silicon Valley headquarters by Mr Husic last year.
While PsiQuantum was already in discussions with the government, Ms Ivanovski and Mr Richardson were recruited to represent the company’s interests in Australia. The pair led federal government engagement, set up meetings, liaised with officials and helped develop the project.
In a motion backed by the Coalition and crossbenchers in February, ACT independent senator David Pocock issued a Senate Order for the Production of Documents (OPD) requesting the government table a list of all meetings between PsiQuantum and Mr Marles and Mr Husic since May 2022. In addition, the OPD requested a list of all meetings between the ministers and Brookline Advisory, “including, but not limited to, those involving Lidija Ivanovski and/or Gerard Richardson”. It also requested any correspondence between Mandala and the ministers’ offices.
Mr Husic responded to the order for production of documents on April 15, declaring that it would “not be in the public interest” to disclose all the information requested because it would reveal cabinet deliberations and damage the interests of commercial traders. “I claim public interest immunity,” he said.
Mr Singh on Tuesday told The Australian that Mandala was approached by PsiQuantum because its team of economists had “developed a strong reputation in tech, having been commissioned to produce public reports for a number of global leaders, including Microsoft, LinkedIn and Amazon”.
The Australian is not suggesting any improper conduct by lobbyists or consultants acting for PsiQuantum.
Senator Pocock told The Australian the PsiQuantum funding was a “sizeable investment in Australia’s future technological capability for which we are yet to see the full scope and detail”.
“While I welcome smart strategies to grow our sovereign capability and co-investment designed to safeguard taxpayer funding, I believe it is also important to offer a fair opportunity for Australian companies to compete, especially for an investment of this scale,” Senator Pocock said.
“Multiple Australian-based quantum companies raised concerns about the process leading up to this announcement, as early as December last year.” An industry source told The Australian the government should not invest in a start-up without any visible product, declaring they were a quantum researcher who “never saw any tender … the whole thing smells a bit iffy”.
Mr Husic defended the process on Tuesday, saying the government “set up a very methodical process to do an assessment on who would be closest in scale, maturity and capacity for spillover effects to build the world’s first fault-tolerant computer”.
“We handled that expression of interest and conducted that with over 20 domestic and international firms to see what was able to be done … We applied technical, legal, commercial and probity assessments, as well to inform cabinet processes on what would be required,” he said.
“This has been a determined, deliberately, detailed process.”
Authors: Geoff Chambers and Joe Kelly
This article appeared in The Australian on 1 May 2024
