In the Australian Senate last week, David Adeang — president of Nauru — was formally accused of corruption and money laundering over alleged misuse of funds provided by Australia for offshore-processing operations.

A previously unreleased report from Australia’s financial intelligence agency AUSTRAC was cited, pointing to “rapid movement of large volume and value of funds” in 2020. The report reportedly links Adeang, former Nauru president Lionel Aingimea, Aingimea’s wife, and other associates — describing transactions between personal and business accounts, multiple ATM withdrawals, and payments via a company tied to a subcontractor of Australia’s offshore-processing contractor.

According to the allegations, one subcontractor company — associated with Aingimea’s wife — received government-backed payments and then transferred substantial sums to Adeang. AUSTRAC reportedly flagged more than 15 Osko payments, hundreds of building-contract payments, numerous ATM withdrawals and other fund movements suggestive of money laundering.

The timing of the accusations is particularly controversial: despite knowledge of the suspicions, the government of Anthony Albanese signed a multibillion-dollar deal worth about US$2.5 billion with Nauru this year, under which Australia agreed to resettle dozens of non-citizens (the so-called NZYQ cohort) on the island.

Critics argue the deal — built on a foundation of secrecy and opaque payments — risks supporting a “kleptocracy” and calls are growing for a thorough public inquiry (such as a royal commission) to examine the financial and human-rights implications of Australia’s offshore-detention–and-resettlement arrangements.