Jim Dickins – Police failed to investigate allegations an Australian public servant passed massive bribes to East Timor's Prime Minister.

Documents lodged with a United States court claim an Australian acted as the bagman in a conspiracy involving US energy giant ConocoPhillips. Bribery of foreign officials is a criminal offence punishable by as much as 10 years in jail.

But Australian Federal Police admitted to a delegation from the Paris-based Organisation for Economic Co-operation and Development they never investigated the case.

A statement of claim lodged with US District Court last year alleges East Timorese Prime Minister Mari Alkatiri accepted more than $3 million from ConocoPhillips in 2002, paid by the Australian public servant acting as an intermediary.

The deal allegedly allowed ConocoPhillips, one of the world's biggest fuel refiners, and Australia to retain favourable concessions over Timor Sea gas reserves negotiated during Indonesia's violent occupation.

Mr Alkatiri has strenuously denied accepting the money and threatened to sue for defamation.

The statement of claim was lodged on behalf of another US energy company, Oceanic Exploration, which lost a lucrative claim on the reserves after Indonesia's 1975 invasion. It included details of Darwin bank accounts allegedly held by Mr Alkatiri and bribe amounts supposedly deposited there.

Oceanic was pursuing ConocoPhillips for billions in compensation until its case was struck out of court earlier this year.

The AFP said it would normally pursue reports of alleged bribery, if combined with supporting information, but it did not do so in this case because it would have been "inefficient".

In a report released last week, the OECD said the omission was concerning. As well as contravening the Commonwealth Criminal Code, bribery of foreign officials breaches Department of Foreign Affairs guidelines for diplomats.