Inquiry puts integrity framework’s shortcomings on the record

By Stephen Easton

Friday June 3, 2016

Man looking at the screen of a digital tablet with a magnifier

A Senate inquiry into the need for an overarching federal integrity commission was cut short by the election campaign and all but ignored by the major parties, but it put a valuable and interesting discussion on the parliamentary record.

This unfinished inquiry went beyond a simple choice between a “federal ICAC” and the status quo. The dialogue that took place made it clear that while the term is popular and easily understood, the New South Wales model it implies is not actually the most popular option for the Commonwealth.

“Reputations can be damaged, sometimes unfairly.”

Other state modes where the use of public exposure against those facing allegations is more restrained are more widely favoured. But the sum of the testimony also makes it clear there is a strong case for a more comprehensive, better resourced federal integrity framework.

Highly respected and experienced journalists assured the Senators there were plenty of signs of corruption at the federal level and contributed to a raft of good examples from several witnesses, while survey data convinced them public trust is weak and perceptions of corruption are climbing.

Bureaucrats who presented the government’s position and the current decentralised framework focused on integrity mechanisms for the Australian Public Service. But, public policy professor AJ Brown pointed out, the APS only makes up about half of the Commonwealth public sector at best and there is nobody truly co-ordinating any overall system.

He sees “serious gaps and weaknesses” and said that another vital role for a national integrity commission was dealing with “non-criminal misconduct and corruption” to prevent “a slide into more serious corruption risks”.

“It is quite clear, in my mind, that we need to look at some serious institutional strengthening in order to deliver a Commonwealth integrity system that would be even as good as those that operate at a state level,” said Brown, one of Australia’s leading researchers in the field.

A genteel council overseeing expert inspectors-general

The most genteel option to beef up the system is the “anti-corruption council” promoted by Brown’s fellow public policy professor and collaborator Adam Graycar, another of the the nation’s foremost experts on public sector integrity.

He feels it’s a better fit for a rich country like Australia than a new standing body with powers like a Royal Commission. “In rich countries it is often preferable to have an agency that barks and leaves the biting to somebody else,” Graycar told the committee.

The non-executive body would co-ordinate, monitor and report on integrity issues and play an educative role, he explained, but leave the investigations “to existing agencies, who are already equipped to do that sort of thing”. Graycar also thinks more inspectors-general with expertise in wonky fields like procurement of information technology would be useful.

“There is a danger, however, that [inspectors-general] can sometimes be captured by their own department, their own agency, because they are too much part of that culture,” he warned. “Again, the council would be able to identify the way in which inspectors-general deal with their own internal issues and the way in which the various players perform, all of whom have a role in increasing integrity.”

On the other hand, the professor conceded the United States — which does have a network of inspectors-general but not a national integrity agency — “does not do terribly well” at stopping corruption.

Pressed for time

The select committee only had time to publish an interim report that focused on the public sector but its chair, Senator Dio Wang, later expressed hope the inquiry would be a small step toward a much more powerful agency:

“… with the power to scrutinise politicians and political donations, the institutional behaviour of banks and financial institutions, the conduct of sporting organisations, and so on.”

The inquiry’s sole recommendation is that the federal government take a serious look at its integrity system, and support current and future independent research into the adequacy of the decentralised patchwork framework. The committee wisely commented:

“The decision between the establishment of a [national anti-corruption commission] and the multi-agency model is not a binary choice. Both should be components of Australia’s integrity system. Agencies still need to have in place appropriate safeguards to minimise corruption, leaders will still have to model the behaviours they expect in their subordinates, and the legislature will be called upon — from time to time — to establish independent inquiries on specific matters.”

The committee also called on the federal government to fund a specific research project, led by AJ Brown and involving three universities with Transparency International Australia, the NSW Ombudsman and the Queensland Integrity Commissioner. Coincidentally, it won a $248,000 Australian Research Council grant a few days after the report came out.

Safeguarding natural justice

Even the strongest supporters of a powerful national corruption watchdog accept the great risk of undermining natural justice by vesting extraordinary coercive and investigative powers in such a body, and having too much of its work done in public.

“Reputations can be damaged, sometimes unfairly,” acknowledged journalist Quentin Dempster, going on to argue the overwhelming public benefits have made such commissions an unfortunate necessity at state level, despite “great contention” over their powers.

“I think that there is a happy balance to be found on the basis of other jurisdictions’ experience of this.”

Dempster made a persuasive case that federal institutions are vulnerable to corruption, referring to Senator Sam Dastyari’s candid comments about “10 huge companies with so much power and influence in this country that they have killed proper democratic process at the federal level”.

“We all would realise that it is a big step to go from lobbying, even aggressive lobbying, to corruption,” the former ABC doyen and New Daily political editor admitted, but said that was where a dedicated agency came in.

“Any reasonable person or observer would need evidence. A reasonable person would need a professional body with the capacity, fearlessness, procedural fairness and resourcefulness to get that evidence. Corruption is a secret transaction and very hard to discover. Without a capacity to expose it, the public is left with cynicism, distrust and conspiracy theories.”

The “mere existence” of a powerful federal integrity commission would do a lot to discourage corruption and encourage public trust right away, he argued:

“It would show the public of Australia that it is their parliament, through the honourable discharge of their duties by elected members of the House of Representatives and the Senate, which runs the country, not any external influence-peddling power operating through devices conducive to corruption.”

On the need for procedural fairness, Dempster brought with him the influential opinion of Tony Fitzgerald, who famously exposed blatant corruption in Queensland. He explained why Fitzgerald chose not to declare anyone corrupt himself, even when he of collected evidence of “bags of cash to the commissioner of police through a bagman and alleged donations in an envelope to the premier”.

“Admissible evidence went onto a special prosecutor, and that is what I have raised here in my submission: if there is danger that somebody is suffering a corrupt conduct finding in the NSW model, you have got to carry that with you for the rest of your life and beyond — it is Googleable now,” Dempster said.

“You have got this black mark against your name unfairly, and Fitzgerald says in his submission — and I tend to agree with him — that that is anathema to a system of justice.”

Two of Australia’s top investigative journalists, Nick McKenzie and Kate McClymont, jointly offered “rare insight into significant corruption in the federal sphere” and backed the NSW ICAC model. They agree there are risks to be managed as well, but gave more evidence of serious gaps at federal level.

“It is without question that the current framework is flawed,” said McKenzie. “The existing Commonwealth oversight bodies, such as the Ombudsman and [Australian Commission for Law Enforcement Integrity], are not working as well as they should.”

He claimed the ACLEI is under-resourced and understaffed even to cover its limited remit. He and Richard Baker reported “top security and anti-corruption officials and those who have worked closely with ACLEI and have an intimate understanding of its operations, compare the agency to a mouse chasing dragons” in a recent expose on corruption of border control officials.

McKenzie contended the federal police force was also stretched and “does not want to look [at public sector integrity] because it is complex, expensive, time consuming and politically sensitive” and said he had personally seen evidence of “major corruption” in big government building projects.

“A federal ICAC would look at such things as collusive tendering, bribes and favours for mates,” said McClymont, pointing out it would spend more time concerned with the 20,000-odd APS staff around the country than politicians.

She said one of her past stories that implicated a NSW MP, a Centrelink employee and the then-Chancellor of the University of NSW — who was publicly found to have acted corruptly — showed the contrast between guaranteed exposure afforded by the ICAC and the opacity of federal public sector integrity investigations:

“There was going to be an internal inquiry into this Centrelink potential corruption. I never heard another word.”

Despite McKenzie’s explicit support for the NSW ICAC model, he agreed under questioning that the level of public exposure could be excessive. “You could have very tough requirements around a public hearing,” he said. “We need not have public hearings.”

In his testimony, Professor Brown made it clear, as he has in various other forums and publications, that the NSW ICAC would not be the most agreeable choice.

“I think we really have to learn from the fact that the NSW ICAC experience has been at an extreme end of the spectrum — using public hearings as a primary investigative tool where it is probably not warranted, and it is legitimate to question that,” Brown said.

“I think that there is a happy balance to be found on the basis of other jurisdictions’ experience of this.”

Old arguments die hard

The government representatives — Senators Eric Abetz, who contributed a few probing questions to the hearings, and David Johnston, who attended neither of them — used the committee’s interim report to quote the government’s position provided by the APSC and AGD witnesses. Abetz and Johnston also disagreed with a reference to the “shortcomings of the existing arrangements” that are detailed throughout the document.

However, the evidence of various academics, investigative journalists and eminent members of the legal fraternity made a compelling case for the government to seriously consider the question, as the standing parliamentary committee that oversees the ACLEI has recommended more than once.

In 2011, that committee suggested “a review of the Commonwealth integrity system with particular examination of the merits of establishing a Commonwealth integrity commission with anti-corruption oversight of all Commonwealth public sector agencies” after hearing evidence of gaps in the patchwork system.

The Labor government at the time — which later commissioned a discussion paper, leading to a new national anti-corruption plan that also fell victim to a change of government, only to be leaked to the ABC — simply repeated the multi-agency dogma in its response:

“The [Commonwealth’s] approach to preventing corruption is based on the premise that no single body should be responsible. Instead, a strong constitutional foundation (the separation of powers and the rule of law) is enhanced by a range of bodies and government initiatives that promote accountability and transparency. This distribution of responsibility creates a strong system of checks and balances.”

But according to Transparency International Australia — represented at the inquiry by silk Anthony Whealy — the current system has in fact been cobbled together more by accident than design. TIA argued in its submission to the Attorney-General’s 2012 discussion paper:

“The recent adoption of the term ‘model’ suggests that current Commonwealth arrangements reflect a degree of pre-existing planning or coherence which, in TIA’s assessment, is factually and historically inaccurate. The Commonwealth’s present arrangements would be better understood as the result of decades of largely uncoordinated developments in administrative law, criminal law and public sector management, together with political accident.”

The regular calls to strengthen the federal integrity framework — the Municipal Association of Victoria state council recently voted to officially add its voice to the chorus — began several decades ago and have now reached the point where those who oppose reform of any kind are becoming isolated.

Against this growing clamour, the defunct select committee’s simple request seems eminently reasonable. “Perhaps Mr Shorten and Mr Turnbull are both hoping this will all be swept away in the 24-hour news cycle,” Quention Dempster suggested.

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