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Whistleblowers suggest a senate committee’s failure to recommend the establishment of a federal anti-corruption body is another sign of a system unwilling to subject itself to scrutiny. By John Power.

Why we’re not getting a federal ICAC

In late January 2003, Philip Patterson was working in the counterterrorism section of the Attorney-General’s Department. Inside the department’s mailroom, he noticed something strange.

Stacked in two huge cardboard boxes, recalls the former senior legal officer, were thousands of unopened envelopes addressed to the National Security Hotline.

The Howard government had established the hotline just a month earlier to receive tips from the public at a time of heightened anxiety about the threat of global terrorism. Weeks earlier, the Bali bombings had killed 202 people, 88 of them Australian.

Emphasising the vital role of the public in reporting suspicious activity, a government ad campaign during the period, fronted by former Channel Nine host Steve Liebmann, called on all Australians to “be alert, but not alarmed”.

Against this backdrop of fear and appeals to civic duty, Patterson wondered why this correspondence was being stored so haphazardly and asked the attending officer.

The letters were to be destroyed, never to be processed or even opened, the officer told him. The department simply didn’t have the resources to sift through so many leads, regardless of the potential national security implications.

“I was shocked by what I was told and immediately informed my assistant secretary, who indicated to me he was not interested to know about it,” Patterson wrote in a submission earlier this year to a senate committee established to examine the creation of a federal anti-corruption body.

“Particularly given his response and the manner in which it occurred, I formed the view that it would be futile and potentially dangerous to myself for me to raise the matter with anybody at AGD.”

Patterson is among dozens of whistleblowers, academics, non-government organisations and regulatory agencies who gave evidence to the select committee on a national integrity commission, which on September 13 reported its recommendations including that the government give “careful consideration” to an anti-corruption agency for the Commonwealth.

Like many of those who have attempted to sound the alarm within an organisation, Patterson believes the Commonwealth is ill equipped to effectively investigate and prosecute corruption and malpractice in its midst.

“The current ineffective system, as it exists, is designed to look like an integrated system of ethics regulation,” Patterson tells The Saturday Paper. “Its design is flawed because it relies upon decision-makers within its structures to respond to allegations of misconduct objectively and impartially.”

At present, a patchwork of agencies with distinct areas of responsibility and varying powers have roles in maintaining integrity across the Commonwealth. They range from the Australian Public Service Commission, which upholds public sector standards, and the auditor-general  (monitoring public spending), to the Australian Commission for Law Enforcement Integrity, which investigates police impropriety.

A key argument against the status quo is that political and public sector elites are scrutinised by bodies over which they have jurisdiction, if not outright control.

Meeting with the Australian Federal Police after he left his role at the Attorney-General’s Department, following several years of bottling up what he had witnessed, Patterson became convinced no existing agency was capable of investigating his allegations. The visit ended, he says, with the officers informing him that any report he made would be handed to his former boss to assess whether impropriety had occurred.

Stunned by the suggestion, Patterson says he left without ever filing a formal report. Several years later, he filed a freedom of information request with the department for a record of correspondence it received by post. In response, Patterson was told the National Security Hotline had received just six items of mail during the period in question, a claim he says is impossible. To this day, Patterson’s allegations have not been independently investigated.

“Taken as a whole, the system does not account for the possibility of misconduct or corrupt action perpetrated by or with the imprimatur of the most senior members of government, and particularly where such action is pursuant to some unspoken government policy,” Patterson says.

“In such a situation, the only body with nominally appropriate investigative powers is the AFP, and the AFP is nothing more than a government agency.”

The drive for a federal watchdog dates back to at least the 1980s, when New South Wales established the country’s first anti-corruption body, the Independent Commission Against Corruption. Since then, all states have set up integrity bodies with differing degrees of effectiveness and scope. Both of the territories are close to establishing their own agencies.

Yet, in spite of the recommendations of organisations such as Transparency International, and opinion polls showing as many as eight in 10 Australians in favour, federal politicians have resisted calls for a Commonwealth watchdog.

“There are anti-corruption bodies in the states, yet no federal body,” says Kim Sawyer, a whistleblower who exposed accounting irregularities and plagiarism at Melbourne’s RMIT University. “Corruption has no boundaries, yet we prescribe it that way. We need a federal approach to anti-corruption that starts with a new approach and a new agency.”

Prime Minister Malcolm Turnbull has dismissed the need for a federal agency. His Attorney-General’s Department contends that “the government’s approach to dealing with corruption is integrated and multifaceted”.

Other arguments against a national body, put forward by the Australian Public Service Commission and others, include the claim that there is simply less corruption at the federal level, a consequence of the Commonwealth’s focus on less bribe-friendly policy issues.

Opposition Leader Bill Shorten has been noncommittal on the issue, although he facilitated the recent senate committee to look at the question following the expenses scandal earlier this year. That inquiry’s outcome, however, has left many bitterly disappointed.

Comprising two senators each from the Coalition and Labor, plus three crossbenchers, the committee stopped short of recommending the establishment of a federal watchdog, instead calling on the senate to review the possibility. Each of the crossbenchers – Greens senator Lee Rhiannon, Skye Kakoschke-Moore of the Nick Xenophon Team, and independent Derryn Hinch – dissented from the final report to explicitly endorse the creation of a new oversight body.

“I don’t believe that Australian political leaders are serious about effective solutions to corruption,” says Ron Shamir, an Australian Tax Office whistleblower who says his allegations of unorthodox accounting practices at the ATO have yet to be seriously investigated.

“Some of them advocate for it, but in my experience they are more comfortable advocating than confronting corruption head-on.”

Rhiannon tells The Saturday Paper that the two main parties were invested in the status quo and had joined forces to prevent the committee from taking a meaningful stand.

“It suits their interests to not come forward with a well-resourced body that undertakes this work very thoroughly and has investigative powers,” she says.

The committee chairman, Labor’s Jacinta Collins, says criticism of the outcome was unfair, ignoring the significance of the committee reaching a consensus on the failings of the current system.

“I think the significant step that we’ve made in this report is to reach an agreed position that the multifaceted framework we have is not adequate, and that’s the first recommendation,” Collins says, calling it “posturing” to support the creation of a watchdog without specifying its powers or functions.

The Victorian senator says there was an “openness” to a national watchdog within Labor, despite it not being official party policy at present.

“I’d say a significant breakthrough in this space would require a change of government,” she says.

Where the reform cause goes from here isn’t clear. But what seems certain is that calls for a radical rethink of anti-corruption efforts won’t go away.

Haunted for the past 15 years by unanswered questions over what he witnessed, Philip Patterson is adamant about what needs to be done.

“An appropriately funded, truly independent body,” he says, “with own-motion powers of investigation, and the power to compel public servants, staffers, members of parliament and persons of interest to answer questions, is the only possible way of addressing the existing gaps in ethics regulation in the Commonwealth.”

This article was first published in the print edition of The Saturday Paper on Sep 30, 2017 as "No watchdog in the fight". Subscribe here.

John Power
is a Melbourne-based journalist.