Former regional development minister John McVeigh's office asked the Infrastructure Department to reconsider a Queensland abattoir for a regional jobs grant, despite Dr McVeigh recusing himself from the panel due to a conflict of interest and his brother receiving work from the company.
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Nolan Meats in Gympie received nearly $5 million under the $220 million Regional Jobs and Investment Package grants scheme to double the size of its meat processing facility.
However the abattoir was technically ineligible for the scheme because it was also a registered training organisation.
The grant was singled out in a scathing Auditor-General review of the scheme, and in a parliamentary inquiry examining the report this month, because government ministers intervened to get the department to re-assess the ineligible application.
The company was not named in the audit, but in response to a question on notice, the Department of Infrastructure confirmed it was Nolan Meats.
Dr McVeigh reportedly recused himself from the ministerial panel making the final call on grants, citing a conflict of interest scheming from Nolan Meats sitting on a beef advisory council when he was Queensland Agriculture Minister.
However Dr McVeigh's brother Michael's company McVeigh Consultancy was hired to help with the expansion.
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The department also said Nolan Meats had been twice ruled ineligible for a grant because of its status as a registered training organisation.
There were 12 projects disqualified from the scheme because they did not meet the guidelines, including four registered training organisations.
All 12 applicants were given the opportunity to submit a case to support why they should not be considered ineligible. Two took up this opportunity, including Nolan Meats,
The AusIndustry Business Grants Hub reconsidered those two applications and did not change their assessments, the department said.
"Minister McVeigh's office advised that the Ministerial Panel had a strong preference to fund this project as the [registered training organisation] element of Nolan Meats' business was considered incidental to the project for which they were seeking funding under [the Regional Jobs and Investment Packages]," the question on notice reads.
"The department requested the merit assessment from the AusIndustry Business Grants Hub to better understand the project in order to appropriately advise the Minister."
A spokesperson for Dr McVeigh said his office merely sought to clarify that the abattoir's registered training organisation status was "publicly known to be incidental to their business activities and not their primary business activity as a meat abattoir". Instead it was to assist training unskilled employees.
She also said Dr McVeigh was unaware of his brother's work with Nolan Meats when its application came before the ministerial panel.
Separately, Public Accounts committee deputy chair Julian Hill has threatened to haul the secretary of the Department of Infrastructure before the inquiry, after officials failed to answer questions about the jobs scheme earlier this month.
In farcical scenes, department officials were unable to say what the ineligible organisation was or even which ministers ordered the re-assessment. Mr Hill even asked bureaucrats watching over the live video link to text the name of the company to Infrastructure Department deputy secretary Dr Rachel Bacon and "rescue" her..
In a letter to departmental secretary Simon Atkinson, Mr Hill said the department had failed to answer key questions on notice, including providing copies of correspondence about the decision to fund the ineligible application.
Hearing will continue on Friday.
