Think a federal corruption watchdog would have little to do? Think again, says former judge

By Stephen Easton

Thursday August 29, 2019

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If the Morrison government manages to establish the Commonwealth Integrity Commission it has planned, it will come into the public sector with few friends and lots of critics.

In this case, the proposed CIC might struggle for credibility. It has opponents lining up inside and outside federal parliament, including many senior members of the legal profession, some of which are actively campaigning for a stronger model. Those critics do not appear ready to let it go.

The integrity campaigners, including a group of 34 former judges, disagree with the views of many senior public servants and politicians in one key respect. They believe a federal corruption watchdog would have plenty to investigate right away.

If you don’t think so, you’re missing what is right in front of you, according to Stephen Charles, a former appeals judge of the Supreme Court of Victoria.

From controversial procurement decisions to concerning allegations against ministers and public servants, departments, MPs, political parties and interesting revelations about companies like Paladin, Eastern Australia Agriculture and Crown Entertainment, he sees a constant stream of specific scandals and controversies for a corruption watchdog to investigate, all reported in the media.

He also sees a lot of risk at Commonwealth level with massive spending on procurement and political donations, very loose regulation of lobbyists, and the regular occurrence of questionable career moves by former public servants and politicians.

“If there is force in the argument that corruption follows money, power, and influence, there can be little doubt that Canberra is the repository of the greatest proportion of each in Australia,” said Charles in the recent Tony Fitzgerald Lecture on public sector integrity.

Corruption of public officials is business as usual for serious and organised crime. In 2013, Australian Crime Commission CEO John Lawler warned that efforts by gangs to do this were common, well-hidden and “growing and becoming more focused” all the time.

Two to tango

“It takes two to tango,” Lawler said in a 2013 speech that curiously popped up on the Parliament House website this month, exactly six years to the day after he delivered it.

“In the case of organised crime the two refers to the corrupter and the corrupted,” he explained at a public sector integrity conference, perhaps needlessly. “And the tango isn’t a dance, it’s organised criminality.”

Lawler warned the criminal intelligence agency, which mostly pursues the corrupters, was “seeing organised crime seeking to corrupt, persuade and influence public officials” all the time. Again, that is standard operating procedure for many criminal groups.

“When I refer to public sector corruption I am referring to the misuse of public power or position with an expectation of undue private gain or advantage,” he said.

They seek unfair advantages, access to public funds and sensitive information or “valuable commodities” like fake licenses and other documents.

“Further, those Australian public officials who work in the developing world are likely to be at particular risk for organised criminals seeking to corrupt. Organised crime also seek to exploit officials who are in a position to ‘turn a blind eye’ in order to facilitate their activities. It is not inconceivable to see organised crime target officials in a whole range of different roles. Just think about the delegations that you might hold.

“Organised crime could target those who make decisions over government grants, specific investment decisions, particular areas of public policy or specific commercial negotiations.”

At the time, Lawler could easily point to border protection and quarantine officers involved in smuggling, and had to admit the ACC’s own officers had been corrupted as well.

“Organised crime groups understand that if they can gain a trusted insider in the government sector then the risk to their illicit activities can be significantly reduced,” he said. They often recruit on social media, or by obtaining compromising personal information.

The senior criminal investigator said “strengthening the integrity culture within government agencies” was crucial and the threat was present across the board at all levels.

“This could be an issuing officer for a grant; a Centrelink official with access to systems; an AQIS or Customs official at a port; an individual with access to law enforcement systems as well as a person with access to insider information about future markets or even Reserve Bank decisions.

“The list of potential targets for organised crime is significant and … with organised crime being more powerful, they are likely to seek out more opportunities to corrupt public officials.”

Criminals that corrupt public servants are often “skilled at deception” and able to hide their tracks that lead back to government agencies, he added. With powerful agencies like the crime commission going after the corrupters, there are compelling reasons to have others going after the corrupted.

Attorney-General ‘careless with the truth’

In the Tony Fitzgerald Lecture, Stephen Charles spent plenty of time explaining in great detail why he thinks the government’s proposal is not good enough, and a little commenting on his disappointment with Attorney-General Christian Porter’s performance in a debate prior to the election.

“The C.I.C. model will not permit any investigation of electoral donations or their consequences, nor of the revolving door movement of ministers and public servants into private industry,” he concludes at the end of a long and comprehensive address, filled with insights and observations on many classic tales of Australian public sector corruption and the activities of the agencies that try to prevent, investigate and expose it.

“In short, the Coalition only wants serious and systemic criminal activity — brown paper bags with cash — to be investigated.”

When he had the chance, Charles said, Porter “did not attempt to engage” with the proposals from the 34 judges to give the watchdog sharper teeth, or their many examples of recent scandals they felt it should be able to investigate.

“He described my views as “kooky”, “absurd”, “bizarre”, “odd” and “extraordinary” and criticised me for not including any activities on the opposition side among those that justified examination. It has obviously missed Mr Porter’s attention that Labor has not been in government for the last five years.”

While Porter preferred to accuse the former judge of bias towards Labor instead of taking on his argument, Charles said the A-G was “careless with the truth” in saying the Law Council of Australia had endorsed the Coalition’s CIC model – so careless he did it three times.

“Not only has the LCA not done so, its submissions made significant criticisms of the Coalition model.”

Witness K reveals ‘mendacity, duplicity, fraud’

Sometimes there are inquires into allegations against public officials splashed across the media but often they lead to little more than lingering suspicion and unconvincing denials.

“Risks of corruption have also increased in recent years for a variety of reasons,” Charles said.

“These include the increase in governmental control of information; increased need for funding of political campaigns; methods employed by government and the use of public-private partnerships; commercialisation of government services; and the failure to stop the flow of ministers and their staffs to the private sector.”

After noting there is “no body in Canberra with the function or wherewithal to guard against and expose corruption” in the federal sphere, he abruptly turned to Australia’s spying on Timor-L’este to gain leverage in crucial negotiations over access to oil and gas fields.

This was a “tale of mendacity, duplicity, fraud and criminal misbehaviour” on the part of the government, in Charles’ view.

He thinks the government committed “a form of contractual fraud” and acted with extreme contempt for The Hague’s Court of Arbitration. Shortly after the Timorese government applied to the international court, Australian officers raided its Australian lawyer Benard Collaery and seized the passport of the anonymous Witness K, who led the spying operation, so the officer could not testify on the small nation’s behalf.

Charles sees no valid reason to be prosecuting them in a secret courtroom, as so many key details of the spying operation are well known already, and suggests several crimes were committed.

“The actions of ASIS in bugging Timor-L’este’s Cabinet rooms was an act of criminal trespass, its use of the eavesdropped information a fraud on the Timorese. To raid the offices and home of the Timor-L’este’s solicitor was a breach of the U.N. Convention on Jurisdictional Immunities of States and their Property.

“In customary international law, states and their property are immune from the domestic jurisdiction of another country. The raid and confiscation also involved a flagrant invasion of legal professional privilege.”

What about individual rights?

In his impressively constructed lecture, Charles weaves a definitive story of how Australia’s public integrity system has evolved, the debates along the way, and the ongoing mistrust of specialist agencies that can override some common-law rights in the fight against organised crime and corruption.

The concerns about such agencies abusing their powers underpin Porter’s main line of argument in favour of his CIC and go back to the establishment of the National Crime Authority (forerunner of the Crime Commission) in 1983.

“The civil libertarian arguments covered such matters as the right to silence, forcing individuals to give evidence under oath even to the extent of incriminating themselves, the removal of basic common law protections, the unfairness of facing findings of criminal guilt on the basis of evidence ordinarily inadmissible and by reference to a standard of proof less than beyond reasonable doubt, damage to reputations, risk of prejudice to fair trial, and the absence of mechanisms to ensure that Royal Commissions remain accountable to democratic institutions and the courts.”

It became accepted that such an agency “should not make the decision to prosecute those it had investigated” and as a result most anti-corruption bodies still follow this general principle – meaning they brief prosecutors if they think there’s a chance of a conviction.

However, public prosecutors mostly deal with cases that are “entirely different” to corruption, said Charles. Corruption is usually well hidden and hard to prove, and cases often come to prosecutors without the strong compelling evidence that allows them to immediately decide whether to proceed with the matter.

There is still a lot of value in exposing the wrongdoing, even if nobody is convicted, as this can embolden more witnesses to come forward and often leads to worthwhile institutional responses. But a lack of successful prosecutions can give sceptics ammunition.

“The result is that corruption allegations are left to the last while the more straightforward crimes are prosecuted, and the rate of success in prosecutions is poor; which leads politicians (such as Tony Abbott) to argue that anti-corruption commissions are useless, they never achieve anything, which in turn misses the crucial point that such commissions are not principally intended to achieve convictions, their overriding purpose being to discover and expose corruption.”

Charles accepts public corruption hearings could lead to unjustified reputational harm to witnesses and undermine later prosecution of suspects, but says the risks can be managed and on balance, they have often produced good results.

He does not think every hearing should be public, however, he thinks “in every case, there should be thorough and complete investigation first” before serious allegations are thrown around in public.

Play it again

Charles covered the wild tales of the corrupt state governments of the 1980s and paid tribute to those who stood up to them, particularly the lecture’s namesake.

He says the Fitzgerald inquiry’s achievements were “enormous” and it produced a true landmark report. This is all the more amazing, he noted, as it was only given the ability to expose the extremely serious systemic corruption that flowed from the very top of government due to the fact Premier Joh Bielke-Peterson was absent from office to run for federal parliament.

Joh would never have let it happen, he said, and most people expected “the inquiry would be brief and ineffectual and nothing would be achieved, other than easing the pressure on the government” but they were very wrong.

The Justice Department and the police assumed they would be able to obstruct and control the process as usual, but acting Premier William Gunn backed Fitzgerald and gave him unfettered access, widening his remit when necessary. The dominoes began to fall.

Powerful royal commissions exposed serious government and police corruption in Western Australia and New South Wales in the 1980s as well, and as a result the three states led the way in trying to find new ways of detecting, preventing, exposing and occasionally prosecuting it.

Charles joked that on the other hand, “Victorians may have slept peacefully at night, comforted in the belief that Victoria was a state free from corruption” as it had no agency working to uncover it until 2011.

On the other hand, the state was a notorious hotbed of drug-trafficking and saw “murderous warfare” between criminal gangs, he added. In their desperation to tackle organised crime, he observed that police “settled on the innovative device” of using Nicola Gobbo, a defence lawyer to people involved in the mayhem, as a secret snout.

The High Court said this was “reprehensible conduct” on the part of Victoria Police and described Gobbo’s actions as “fundamental and appalling breaches” of her ethical obligations, Charles added.

From dark days to a brighter future

Charles imagines the Fitzgerald inquiry was a “horrifying and dangerous” experience.

“The Premier and much of his cabinet and the hierarchy of the police force were plainly very hostile. The work of the commission required great courage, determination, tactical innovation and perseverance.

“When one reads the report, one can only be astonished both by the extent of the corruption exposed, but also by the breadth and completeness of the reforms which Fitzgerald designed and insisted upon to ensure, as far as possible, that the pre-existing corruption could not be revived.”

Still, Fitzgerald worried the wrong kind of powerful corruption-fighting body could become corrupt itself. He rejected the model of the NSW Independent Commission Against Corruption.

“The approach for which I and others contend, contrary to the Coalition model, would be completely independent of government and the executive,” Charles explained.

“It would have officers appointed by a bipartisan parliamentary committee for five-year terms. It would have independent investigators and would not employ police officers. The NIC’s operations would be supervised by reporting to a bipartisan parliamentary committee and by a similarly appointed Inspector.

“It would be required to observe procedural fairness, it could not make findings of corruption, only findings of fact, and its actions would be subject to the supervision of the Federal Court, including as to any findings of fact.

“The foregoing considerations, and the retention rather than the abandonment of judicial control, would, I would argue, ensure that the NIC could not become part of the corruption problem, as Fitzgerald legitimately feared.”

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