The case for a federal ICAC is compelling. With highly skilled forensic accountants, metadata analysts and IT specialists; phone tap, covert surveillance and search warrant powers to gather evidence; and the power to compel attendance at preliminary in-camera interrogation, a federal commission against corruption could start to correct the myth that there is little or no corruption at the Commonwealth level.
David Ipp, QC, and Tony Fitzgerald, QC – two former judicial officers commissioned by New South Wales and Queensland respectively, who have exposed deep-seated political and administrative corruption within those jurisdictions – both say the malaise does not stop at the state border.
“The possibility of corruption exists wherever a dishonest public official has power or authority to grant benefits, such as licences, approvals, subsidies, contracts, et cetera,” Fitzgerald told The Saturday Paper. “And dishonesty is a common human flaw.”
While Fitzgerald has concerns about what form a federal corruption commission should take, he agrees with Ipp’s public remarks on the issue: “The establishment of a federal anti-graft commission, I think, is very important. There is no reason to believe that the persons who occupy seats in the federal parliament are inherently better than those who occupy seats in the NSW state parliament … and there is a huge amount of lobbying. It is far more substantial … than anything in the states.”
John Mant, who for 40 years was a public administrator, town planner and ministerial adviser, as well as an acting ICAC commissioner, told The Saturday Paper a federal Independent Commission Against Corruption was needed.
Mant said the Commonwealth public service culture, which stemmed from federation in 1901, was always different from the colonial and clannish state administrations. But both had fundamentally changed through increasingly politicised hierarchies. The Commonwealth now has wider and more diverse engagement, too, with approvals, monopolies, supply, service and procurement contracts, grants and tenders.
“Things have changed so much,” Mant told me, “that I now would strongly support the need for a federal ICAC.”
Although fraud and malfeasance have been picked up through internal audits and the work of the state auditors-general and the independent Australian National Audit Office, invariably this was done reactively.
In modern corruption-busting, the resources and powers of traditional Westminster auditors-general are limited. “Greater discretionary power requires greater transparency … particularly with a significant increase in political intervention in the processes of government,” Mant said.
Auditors-general can help, though. David Ipp’s ICAC seconded expert staff from then NSW auditor-general, Peter Achterstraat, in its 2014 investigation into the mines department, which exposed cronyism and coalmine exploration licence corruption at a ministerial level.
“Together with our own investigators they worked enormously hard and with great skill and dedication to unearth corruption that had been very carefully concealed,” Ipp said.
A standing corruption commission can act on tipoffs from audit and law enforcement agencies, concerned informants and from the general public. Public hearings often produce additional information when the public can see where an investigation is headed.
Under an ICAC Act, all senior public officials are statutorily obliged to report their reasonable suspicions about individual or systemic corruption. Protocols are in place to give anonymity to informants, to eliminate any physical or employment risks that may be initiated by those under suspicion.
An ICAC hotline and one-click online tipoffs can trigger immediate covert operations to investigate corruption in real time if the information received is reliable, enabling phone taps and hidden cameras to catch suspects “chockers and starkers” – a pejorative term for evidence of the highest probative value.
The indicia that serious or systemic corruption may already infect the Commonwealth’s operations come from the following non-exhaustive list, compiled with the help of anti-corruption informants and investigative journalists.
First is the malfeasance and fraud now apparent within the nationally subsidised vocational education VET FEE-HELP system, where allegedly shonky training organisations induce students with free laptops to take on courses that a reported majority do not finish. FEE-HELP’s cost to taxpayers has reached $1.6 billion a year.
Then there is corruption within the department of immigration, where cash-for-visas bribery has been rife. In 2013 an ABC investigation exposed internal audits showing a 50 per cent fraud rate covering passports, visas and IDs. In 2015 a Brisbane court case exposed a $500,000 visa scam where bribes were paid through intermediaries to a corrupt immigration official.
In tax, the system of private binding rulings and other discretionary powers of senior tax officials creates a significant corruption risk. The 2008 conviction of then assistant taxation commissioner Nick Petroulias exposed the Australian Taxation Office’s vulnerability.
Worthy of a federal ICAC would have been the billions spent in the Gillard government’s school-building projects and the Rudd government’s roof insulation stimulus spending with poor implementation controls.
So, too, the fabrication of job-placement data in nationally subsidised private-sector employment agencies.
There are also the recent allegations of private schools subsidised by the Commonwealth Department of Education granting personal loans to school board directors for non-school-related activities.
The slush funding of political parties and individual candidates by powerful vested interests – a practice once described in the United States as virtually “forcing every member of Congress to become a crook” – is certainly worth investigation by such a body. The poorly regulated political lobbying industry, and the poorly policed party political donations regime, are continuously contentious. Stuart Robert’s forced resignation from the Turnbull cabinet last week exposed an example of contemporary contempt for the Westminster convention that a minister must so order his/her affairs that no conflict arises, or appears to arise, between a minister’s public duties and private interests.
In defence, materiel procurement bribery in contract and tender evaluation worth billions, exposed in the US as a continual corruption risk, would benefit from oversight.
In forestry, there are the recent revelations exposing contractors who agree to exit the industry in return for taxpayer-funded compensation payments but nevertheless continue under questionable dispensations.
One of the problems with the current system is that fraud is too rarely referred on for prosecution. In a 2011 series for The Sydney Morning Herald, investigative journalist Linton Besser found that internal audits often failed to expose deliberately concealed corruption, writing off cases as “failures of compliance” that had now been attended to rather than referring the fraud to the Australian Federal Police. In the six years to 2011, Besser found, almost a thousand investigations into bureaucrats were terminated because the bureaucrat being investigated had resigned during the course of the inquiry.
Whistleblowers Australia’s national president, Cynthia Kardell, said that systemic corruption was rarely exposed through the case histories of Commonwealth employees who made public interest disclosures. “We’ve found that it is standard procedure from human resources departments to effectively bury any insistent complainant by staging their workplace exits through their rapidly declining mental health.”
The current campaign by strident elements of the Sydney-based Murdoch press to discredit the NSW ICAC over its investigation into the alleged perversion of justice by deputy senior Crown prosecutor Margaret Cunneen, SC, has transfixed the city’s legal, media and political milieu. But this highly diverting bunfight will not affect the survival of ICAC. After a High Court ruling on Cunneen v ICAC provoked a review by Murray Gleeson, QC, and Bruce McClintock, SC, ICAC’s continued existence was legislatively assured by the Baird government, with support from Labor. An amendment was also made to constrain ICAC’s corrupt conduct declarations to uncodified “serious” corruption only.
In now supporting the need for a federal corruption commission, Tony Fitzgerald said the NSW ICAC’s practice of making declarative “corrupt conduct” findings against individuals was problematic. ICAC is an administrative tribunal and not a court, and its capacity to make findings that a court cannot later uphold is a central criticism.
“Such a declaration, which for investigative and prosecutorial purposes adds nothing, is likely to destroy the reputation of the person affected, even if that person is later not charged or is acquitted,” Fitzgerald said. “Moreover, I regard it as fundamentally incompatible with the notion of fair trial, which underpins our criminal justice system.”
In his groundbreaking Queensland corruption inquiry in the 1980s, Fitzgerald made no “corrupt conduct” findings as such against any person, including former premier Sir Joh Bjelke-Petersen and former police commissioner Sir Terence Lewis.
But the factual details of their conduct, including the delivery and receipt of cash in bags, was published in his final report. A special prosecutor was then established by the Queensland government to formulate criminal charges and launch prosecutions.
So a special prosecutor in concert with a standing federal corruption commission to expose Commonwealth corruption may evolve as a more procedurally fair methodology through the current national debate.
Resistance to a federal corruption commission is expected to be intense from within the political parties and the Murdoch press because, as in NSW, its very existence would confront Australia’s corruptible and influence-peddling political and commercial cultures.
Examples of corruption will be fobbed off as “just a few bad apples”. As in NSW, such an investigative body will be likened to a “star chamber” or a Russian show trial.
But the need and the benefits are manifest.
The Palmer United Party’s senator for Western Australia, Dio Wang, has flagged his intention to amend the title and scope of the Turnbull government’s Australian Building and Construction Commission to cover all public sector, agency and political corruption, as well as trade union standover and kickback practices. The ABCC Bill is currently in committee stages before the federal parliament.
The NSW ICAC, with a budget of $25 million, assesses an annual state public-sector budget of $70 billion. With the Commonwealth’s annual expenditure now running at $434 billion, the case for an adequately funded countermeasure for a culture vulnerable to corruption would seem to be self-evident.
This article was first published in the print edition of The Saturday Paper on February 19, 2016 as "Going to the watchdogs".
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