Corruption: The Abuse of Entrusted Power in Australia by Tim Smith (2010)

This work by Tim Smith for the Australian Collaboration (a consortium of National Community organisations) sets out the parameters of Australia’s problems with corruption.

In Corruption: The Abuse of Entrusted Power in Australia, former Supreme Court judge Tim Smith explores corruption in Australia; why it matters, how it thrives, and what is needed to contain it. He analyses some of our worst corruption scandals. He compares the systems presently in place to control corruption with the comprehensive model advanced in the National Integrity Systems Assessment Report of 2005, and asks why governments in Australia have not done all that can reasonably be done to contain corruption.

Smith argues that developments in the last twenty years, such as the extensive commercialisation of government services, our political parties’ ever-
increasing need for funding, the movement of personal ministerial staff to and from private enterprise (including lobbying), and governments’ increasing
skill in controlling information, have significantly increased corruption opportunities and temptations.

In discussing what measures should be taken to contain corruption, Smith demonstrates that we should proceed on the basis that corruption in government is a serious risk that must be addressed—both now and for the future. We must identify and deal with areas of weakness in our existing systems for the control and prevention of of corruption; this requires adoption of world’s best practice. At the same time, we must also reduce the corruption opportunities and temptations that we have created.

The Introduction is reproduced below. The complete document may be found as a PDF here. Tim Smith Corruption-the-abuse-of-entrusted-power-in-Australia_ebook-June-2010



In 1903, in a lecture to the Episcopal bishops and clergy at Washington, Theodore Roosevelt said:

“There are plenty of questions about which honest men can differ. But there
are certain greater principles concerning which no man has a right to
have but one opinion. Such a question is honesty, the honesty that is
aggressive, the honesty that not merely deplores corruption—it is easy
enough to deplore corruption—but that wars against it and tramples it

This and other similar powerful statements were quoted in a letter to the New York Times of 7 November 1904, signed ‘Jared,’ accusing Theodore
Roosevelt of double standards in accepting political donations from corporations seeking public favours. The letter concluded:

“I merely ask whether Mr. Roosevelt has squared the word with the deed by
his attitude toward Republican campaign funds? Has he warred against
corruption and trampled it under foot? Has he employed his best effort to
put down corruption? Has he set his face like flint against the spirit which
seeks personal advantage by overriding the laws? If not he has written his
own condemnation.”

The potential for political donations to corrupt government is still with us and always will be, but who are the political leaders who are prepared to
‘war against corruption’? Premier Anna Bligh of Queensland recently declared her intention to take action, and launched a major review. The
proposals in the subsequent report, discussed later in this essay, would make significant improvements to the Queensland integrity system, if carried out. But more could have been done. Other political leaders in this country have been conspicuous in their silence.
In a speech made on the twentieth anniversary of his 1989 report on corruption in Queensland, Tony Fitzgerald QC expressed his concern:

“Despite their protestations of high standards of probity, which personally
might well be correct, and irrespective of what they intend, political lead-
ers who gloss over corruption risk being perceived by their colleagues and
the electorate as regarding it of little importance. Even if incorrect, that is
a disastrous perception. Greed, power, and opportunity in combination
provide an almost irresistible temptation for many which can only be
countered by the near certainty of exposure and severe punishment.”

The pattern in Australia has been that those in government have only taken serious, direct action against corruption when there has been a major
corruption scandal. Thus, for many years, only Queensland, New South Wales and Western Australia have had permanent anti-corruption bodies.
If corruption in government matters, why have the federal government and other State and Territory governments not followed suit? In light of recent
incidents of corruption in Queensland and elsewhere does more need to be done?

Time to reconsider the issues
In the last 12 months, federal and state governments have attempted to address different aspects of the problem. The federal government has
attempted, unsuccessfully, to address the problem of political donations. The Queensland and New South Wales Governments have recently made significant improvements to their Freedom of Information (FOI) legislation. The Tasmanian government has passed the Right to Information Act 2009 to make significant improvements to its FOI system. The federal and Victorian Governments have attempted to do so, but so far been unsuccessful. A number of governments have taken steps to regulate lobbyists, but they are inadequate.

As to permanent, independent anti-corruption bodies, the Tasmanian Government has decided to introduce such a body 5 and Queensland has
taken steps to strengthen its system. In South Australia, on 14 October 2009, the Legislative Council passed a Bill to establish an independent com-
mission against corruption. There have been calls for such a body from South Australia’s Director of Public Prosecutions Stephen Pallaras QC, the
former Auditor-General Ken MacPherson, and more than 80 of the state’s criminal lawyers. The Premier Mike Rann has so far rejected the proposal,
saying, amongst other things, that it would cost more than $30 million a year, and would turn into a ‘lawyer’s picnic’. He acknowledged that there
was merit in the idea of a national body, but considered that the cost of setting up a state body would be too high.

In Victoria, Transparency International reported in October 2009 that it had written to the Premier of Victoria expressing concern about recent inci-
dents of corruption at local government level. It welcomed the subsequent decision to establish a Local Government Investigation and Compliance Unit
but expressed its concern at the government’s continued failure to follow the precedent of New South Wales, Queensland, and Western Australia, by setting up an Independent Commission against Corruption. It pressed the government, as a matter of urgency, to set up such a body, to address all aspects of public sector corruption in Victoria.

On 23 November 2009, the Victorian Government announced that it had appointed Elisabeth Proust as a Special Commissioner to work with Peter
Allen, the Public Sector Standards Commissioner, to review Victoria’s integrity and anti-corruption system ‘to determine what reforms are needed to
enhance the efficiency and effectiveness’ of that system, including:

“The powers, functions, co-ordination and capacity of Victoria’s integrity
and anti-corruption system, including the Ombudsman, Auditor-General,
Office of Police Integrity (OPI), Victoria Police and the Local Government
Investigations and Compliance Inspectorate.”

The review is to be completed by 31 May 2010.

In light of these developments, it is timely to revisit some key questions. Why does corruption in government matter? Does a corruption problem
exist in Australia, and if so, to what extent? What changes have occurred that provide greater opportunities to curb or encourage corruption? What is
best practice in combating corruption? What measures do we have in place in Australia to deal with corruption? What more needs to be done?
The purpose of this essay is to explore these and related questions, to identify the issues that need to be considered in deciding what needs to be
done, and to suggest approaches to making those decisions. But first, here follow some definitions.

Defining corruption
The primary focus of this essay is on corruption in government. Corruption in government takes many forms and occurs at all levels. This essay will
touch upon: all branches of government (the parliament, the executive and the judiciary); all levels of government (local, state and territory, and federal); all actors involved in government (politicians, their advisers, public officials, those involved in the provision of government services through
public-private partnerships (PPPs) and outsourcing, and statutory corporations). For the purposes of this essay, corruption in business, as such, will
not be examined.8 But it should be noted that the most effective anti-corruption government agencies do deal and should deal with many other forms of
misconduct and corruption, as will be made clear later in this essay.

As to the definition of government corruption, the following is adopted:

‘the abuse of entrusted power for personal or party political gain, or both.’

Much of such corruption is inextricably connected with the pursuit and retention of power, including the effect of factions within parties, and politically-motivated promises and deals. It may be said that an examination of government corruption reveals both corruption in, and of, our political system. The issues will be examined, however, within the context of the abuse of entrusted government power within Australia; for private and party gain
(political, financial or both), be it securing funding for political purposes, or the abuse of financial entitlements (such as advertising, travel and electoral
allowances) by those entrusted with power.