US private prisons operator to be paid $790m to hold 100 people on Nauru in quiet expansion of contract
A US private prisons operator will receive $157 million a year to run Australia’s offshore processing regime in Nauru, which is currently holding just over 100 people. This follows a quiet expansion of the government’s contract by more than $350 million, bringing its total value to three-quarters of a billion dollars.
The two-year extension was granted without prior public notification or scrutiny, raising allegations of gross mismanagement and claims that the process is running out of control. These concerns have been voiced by parliamentarians and government integrity experts alike.
MTC Australia, a subsidiary of the US-based Management and Training Corporation (MTC), manages the contract. MTC operates hundreds of for-profit prisons across the US and the UK. Previous investigations, including one by The Guardian, have reported historical allegations tied to civil suits involving gross negligence and severe security failures at two US facilities operated by MTC.
In 2019, MTC settled a bribery case for US$5.2 million. The state of Mississippi alleged that MTC engaged in a conspiracy involving kickbacks, fraud, and money laundering, paying bribes to state officials in exchange for contracts. During the bidding process for the lucrative Nauru contract, MTC disclosed the bribery case in response to an official question on notice in March.
More recently, in 2023, MTC was forced to repay Mississippi over US$5 million (approximately A$7.6 million) after falsely billing for thousands of prison guard shifts that were never worked.
Allegations of corruption within Australia’s offshore processing regime on Nauru pre-date MTC’s contract. A 2016 report by the Australian National Audit Office identified “serious and persistent deficiencies” in procurement activity, which reduced competitive pressure and significantly increased service costs without government authorization.
Former Nauruan President Sprent Dabwido commented on the impact of the offshore processing deal, saying: “It has turned our country upside down. Lives have been lost, corruption and greed have overtaken my island.”
In 2023, Senate estimates revealed that the Morrison government continued to pay millions of dollars to a businessman for offshore processing services on Nauru, even after the individual pleaded guilty to bribing Nauruan government officials.
The Richardson Review identified Nauru as a high-risk integrity environment, with widespread cronyism, bribery, and other corrupt behaviors reported.
In 2024, then Assistant Minister for Defence Matt Thistlethwaite accused the Morrison government in parliament of overseeing an offshore processing regime that was effectively being used as a slush fund by suspected criminals.
Additionally, last year, Derek Elias, a former Assistant Secretary of the Home Affairs Department, alleged in a workers’ compensation case that the department had entered into broken, unfit-for-purpose contracts at extraordinary expense within Australia’s offshore detention system. He claimed the department was engaged in illegal contract negotiations involving large sums of money, wasting taxpayer funds, and had lied to Senators in parliament.
The Department of Home Affairs has denied Elias’s allegations.
https://www.theguardian.com/world/2025/sep/29/us-private-prisons-operator-paid-790m-to-hold-100-people-on-nauru-in-quiet-expansion-of-contract
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