A former nurse at the Australian Embassy in Iraq told the ambassador about careless weapons handling and alcohol abuse by security contractors before a bodyguard's death, an inquest has heard.
The only witness to the death was a security contractor, Sun McKay, who allegedly regularly drank a cocktail of vodka, Redbull, cough mixture and Valium while playing with weapons.
The man who died, Christopher Betts, 34, was also a private security contractor with the United Resources Group at the Baghdad embassy when he shot himself in the head on May 12, 2016, the Brisbane Coroners Court was told.
Australian Federal Police found his gunshot wound was self-inflicted but could not determine if it was misadventure or suicide.
He died about 2.30am after a night of drinking in the embassy living quarters with Mr McKay.
Former URG nurse and ex-NSW police officer Tanya Ferrai told the inquest she became so concerned about URG's poor management and culture she raised it with the company's chief executive and eventually the ambassador.
She alleged medical and security records were altered or deleted, mental health screening was inadequate, and contractors were using drugs and alcohol, which was forbidden.
"Fraudulent qualifications of medics and security personnel were also being ignored ... (there were) insufficient background checks," she said on Thursday.
Ms Ferrai was also worried about URG's refusal to show medical staff proof that the company had medical indemnity and liability insurance.
She said the clinic was not up to Australian standards.
"The health and safety of URG staff were basically compromised, which nearly resulted in the death of numerous staff members," she said.
She said security contractors complained about the quality of some of the weapons URG supplied them to protect Department of Foreign Affairs and Trade staff.
Ms Ferrai also alleged there were weapons handling and storage breaches, one of which resulted in a live round being fired inside the embassy.
The court heard Ms Ferrai warned URG management that a serious injury or death would occur if they did not address the issues.
She said senior management ignored her concerns, instructed her not to put anything in email form and threatened to sack her.
She then took her concerns to DFAT staff and eventually an acting ambassador, who she did not name, in early 2016.
"She listened to what I had to say and she said she was going to escalate the matter," Ms Ferrai said.
Ms Ferrai said she became aware the ambassador, who was only there for a few weeks, had raised the issues because URG management began intimidating her and her work emails were deleted.
"It was horrendous, which is why I got out - I resigned," she said.
Mr Ferrai said Mr McKay, who was in the room next to her, was intoxicated on his "signature cocktail" about five nights a week.
She described him as a "disturbed" man, who was obsessed by murder and made worrying remarks that caused her to lock her bedroom door at night.
The court also heard from numerous former URG security contractors, who allege Mr McKay regularly pointed guns at colleagues and did not comply with protocol to keep weapons unloaded while off-duty.
DFAT lawyer Andrew Berger suggested Mr Ferrai may have been mistaken about the details of her conversation with senior staff and the ambassador.
URG has not co-operated with the inquest, which will hear evidence from Mr McKay on Friday.