Prime minister’s attack on NSW ICAC is wholly unjustified

Centre for Public Integrity

By Stephen Charles QC AO Director at the Centre for Public Integrity. Originally published in Pearls and Irritations on Nov 29 2021

The Coalition’s proposal for a national integrity commission shows an arrogant and contemptuous disdain for community demands such a body.

Last week the prime minister made an extraordinary attack on the New South Wales Independent Commission against Corruption (ICAC), which he described as a “kangaroo court” making “shameful attacks” on the former premier Gladys Berejiklian. He said that what was done to the premier was an “absolute disgrace” and that she had been done over by “a bad process and an abuse of process”.

My colleague Anthony Whealy QC and I in a letter to The Australian Financial Review (November 10) pointed out that in 2014 the NSW Parliament, in conjunction with the executive, strengthened ministerial decision making. At the heart of the code of conduct is the need for ministers to avoid not only the actuality of a conflict of interest but the perception of such a conflict. The new laws established that a substantial breach of the code of conduct may constitute “corrupt conduct” under the ICAC legislation. We pointed out that ICAC was investigating whether Berejiklian breached her obligations by not revealing her relationship to Daryl Maguire and by continuing to take an active role in grant programs being pushed by the then MP.

These allegations are not trivial; they raise serious integrity issues. We pointed out that:

“On one possible view of the outcome, it may be found that, to a serious extent, the financial affairs of the state were being manipulated by Ms Berejiklian’s secret lover, unknown to the then premier, Mike Baird and his colleagues. In the face of a finding of this kind, Ms Berejiklian’s failure to disclose and her insistence upon remaining involved, may reach the level of a serious breach of public trust. It plainly justifies the public hearing that ICAC is now conducting.”

The prime minister’s attack on ICAC is, in these circumstances, wholly unjustified. The NSW public were totally unaware of these events. ICAC’s function is not only to discover misconduct, but also to reveal it to the public. ICAC is properly carrying out the functions for which it was designed by the conservative premier, Nick Greiner in 1988. Conservative premiers have, in the three decades since its establishment, repeatedly congratulated and thanked it for its difficult work in guarding the state against corruption. To call it a kangaroo court was disgraceful.

Why, then, did the prime minister launch this blistering, but unjustified, attack on ICAC? It is not difficult to suggest an explanation. Nearly three years ago, the prime minister undertook to set up a commonwealth integrity commission (CIC). His attorney-general before the 2019 election already had a tentative draft of the legislation in his hands. But long delay followed while consultation and amendments were considered, and an exposure draft for a bill was not made public until a year ago, this being forced upon the government by publication of draft legislation for a national integrity commission prepared by Helen Haines, an independent member of parliament.

When the Coalition draft bill was exposed to public comment, the result was almost universal contempt. The only enthusiastic supporter was The Australian’s Chris Merritt, who has described the group of judges pressing for an effective national integrity commission (including myself) as a “gaggle of disgraceful extremists”.

The Coalition bill divides the CIC into halves, the stronger half dealing with the law enforcement bodies such as the Australian Federal Police (AFP), and the Border Force. This half has a broad jurisdiction, not requiring a criminal offence, and extending to “corruption of any other kind”. Anyone may complain to the CIC, even anonymously. The only threshold for an investigation to start is that the matter must be significant. Virtually all hearings must be in public. Reports of hearings will be made public, and may include findings of corrupt conduct.

The second half of the CIC Bill deals with all other public servants, including parliamentarians, and is a very different animal. The fact that the second half is much weaker is predicated on the assumption that there is a greatly heightened risk of corruption in law enforcement bodies, an assumption for which I know of no justification whatsoever. The jurisdiction of this half is seriously limited by the requirement that it will only investigate conduct which is reasonably suspected of involving certain criminal offences. There is a range of serious corrupt conduct that does not constitute a criminal offence. Whistleblowers may not complain directly to the CIC in this half. They must take their complaint to an entity such as the AFP, the Border Force, or the ombudsmen, and a complaint may come from such a body, but only if there is a reasonable suspicion of criminal activity. In this half, there will be no public hearings at all.

Then, at the conclusion of an investigation in this weaker half, it will not issue any report. The CIC will be able to refer a criminal brief of evidence to the Commonwealth Director of Public Prosecutions (DPP). It will not make findings of corruption or other criminal offending.

Insofar as parliamentarians are concerned, section 239 (7) of the proposed draft says:

“A report under this section must not include any opinion or finding that is critical (either expressly or impliedly) of, or a recommendation about:

a parliamentarian;

the office of a parliamentarian; or

a staff member of the office of a parliamentarian.”

The result is that the CIC is a body that will have, in the public sector, the most limited ability to commence an investigation, and no publicity will be given to an investigation until a prosecution is actually commenced. It will be a body with little or no ability to discover public sector corruption, and absolutely no corruption involving parliamentarians will be exposed by it.

The arrogant hypocrisy of the CIC’s design is exposed by the fact that the half dealing with law enforcement personnel is so much stronger. The Coalition’s concern about damage to people’s reputations and lives being ruined has no application there. Nor did it when the banking industry, or those involved in other royal commissions such as sex abuse, were all dealt with in public. There is also Commonwealth legislation, the Judicial Misbehaviour and Incapacity (Parliamentary Commissions) Act 2012, which deals with allegations of judicial misbehaviour and provides by section 23 that hearings shall be in public. Even a High Court judge could be dealt with in public for misbehaviour under this provision.

Scott Morrison’s discomfort at the notion of an effective anti-corruption body may have been increased by recalling the public’s outrage after the auditor-general exposed what are now known as the sports rorts and the car park rorts. In the sports program, the Australian National Audit Office (ANAO) found that the minister ignored and effectively tore up the guidelines established by Sports Australia, disregarding proper process and Sports Australia’s recommendations in favour of preferring marginal and targeted electorates, to bolster the Coalition’s prospect of success in the coming election. It was an egregious misuse of power in which the prime minister’s office was an enthusiastic contributor. It disbursed $100 million of taxpayers’ money. Both Senator Bridget McKenzie and the prime minister, far from admitting any fault, vigorously defended the program as a proper exercise of ministerial discretion.

This was followed by the Urban Congestion Fund, in which a much larger amount ($660 million) was misused in much the same way. The ANAO report showed that the 47 commuter car parks chosen were all in vulnerable seats, there were no merit or eligibility criteria, no guidelines, and no significant consultations before the sites were chosen, other than with Coalition members and some unelected candidates. The comments made by Finance Minister Simon Birmingham afterwards showed that the Coalition felt no embarrassment or remorse about this scandalous behaviour and were likely to repeat the exercise.

The prime minister’s fury in parliament last week must be seen against the background that most of the Australian community are now demanding the establishment of an effective national integrity commission with the power to hold public hearings. The Coalition’s CIC would not have the jurisdiction to investigate either the sports rorts or the car park rorts. Until the ANAO’s report in each case, no basis for any reasonable suspicion of any crime existed. Even if an investigation had started, there would have been no public hearing. Only if, many months later, the Commonwealth DPP decided there was a case to prosecute, would the public have learnt there was even an investigation that had taken place.

By contrast an effective national integrity commission would have had the ability to investigate, to expose the appalling conduct that was involved in each case, and to hold public hearings.

It is not much of a surprise, therefore, that the prime minister put on such an emotional show in parliament last week. The only defence that the Coalition has put forward to the sports rorts allegations is the report made by Phil Gaetjens, the head of the prime minister’s department. Gaetjens concluded that McKenzie did not act in breach of the ministerial standards with respect to fairness. But only part of the report was made public by Morrison, and it satisfied no one. There are very good reasons for preferring the ANAO’s conclusions, not least its investigation took 10 months and 3,800 hours of work, and was detailed and comprehensive, whereas Gaetjens’ report took three weeks, was neither detailed nor comprehensive, and was carried out for a very limited purpose. Furthermore several leading constitutional lawyers have since given evidence to the Senate’s committee inquiry that the sports program involved unlawful government spending of public money, was unconstitutional and was an infringement of the rule of law.

Similar strong complaints have been made about the car park rorts.

Community demands for the establishment of an effective national integrity commission are not directed at any one party. They are the result of a strengthening concern at a perceived lack of transparency and integrity in government, that our politicians believe they are entitled to spend our taxpayers’ money in any way they choose and what Professor Anne Twomey has called, “the disrespect for the rule of law shown by persistent breaches of the Constitution of the Commonwealth of Australia, statutes, guidelines and ministerial standards when it comes to the allocation of grants to community groups”. That concern is magnified when the Coalition puts forward as a proposal for a CIC, a body which cannot investigate politicians’ actions in any meaningful way. What the Coalition has proposed for such a body shows an arrogant and contemptuous disdain for the community demands for an integrity body, and is an indication of serious decay in democracy in Australia.

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