Stephen Charles 26 August 2019

Held at Griffith University.

This is the text of the 2019 Fitzgerald Oration as provided to Accountability Round Table by Stephen Charles. This oration is in honour of Tony Fitzgerald of the Queensland Fitzgerald inquiry which changed the face of QLD politics and led to the establishment of Australia’s first Anti-corruption commission.


It is now 30 years since the end of the Fitzgerald Inquiry and it is an appropriate time to celebrate the extraordinary achievements of Fitzgerald himself and of that inquiry, and the difficulties and dangers that had to be faced and overcome in the course of the investigation.

THE COSTIGAN COMMISSION

But first, it is necessary to establish some context.  Australia has made frequent and vigorous use of Royal Commissions and Inquiries in the almost 120 years since Federation.  I will start, a mere 40 years ago, with the Costigan Commission, established in 1980 by the Fraser government to investigate the activities of the Federated Ship Painters and Dockers Union.  The Union was a perfect target for a Coalition government which was then struggling in the electoral polls.   Its activities had been chronicled in the Bulletin describing “murder and mayhem on a frightening scale” on the Melbourne waterfront.  Membership depended not so much on one’s employment, rather one had to boast at least one serious criminal conviction.  Members of the Union established other identities under different names, each of which claimed wages, holiday pay, and workers compensation.  One Union member had established an efficient office in his house to supervise the operations of his 24 identities.  The Union was an affiliate of the ALP, and investigation of the Union’s activities offered the Coalition and Victorian governments every possibility of embarrassing the Opposition, federally and state.

Most inquiries of this kind are established for purposes which are political in one sense or another.  An inquiry into a disaster (a bridge collapse or aeroplane crash) will be often an attempt to avoid criticism or blame being at once attached to the relevant government.  In this case, the Fraser government would have assumed that the inquiry could only be to its advantage.  The inquiry became derailed however because so much money was flowing into the hands of Union members that it became necessary to launder it; and the vehicles chosen for this purpose were also being used to launder the receipts of many members of what became known as the Bottom of the Harbour Scheme, many of them in the west and north of Australia.  What began as a Federal and Victorian inquiry gained a perspective that was Australia-wide, Kerry Packer (under the pseudonym The Goanna) was drawn into its wake, and the effects became very damaging to the Coalition rather than an ongoing taint to the Opposition.  The inquiry was given repeated extensions to its life, until in 1984 Hawke, then Prime Minister, terminated the Inquiry, allegedly having been told by Neville Wran that the Inquiry’s continuance could bring down the NSW government.

THE 1983 NATIONAL CRIME AUTHORITY CONFERENCE

Frank Costigan QC, and his counsel assisting, Douglas Meagher QC had been greatly impressed by the work of the Hong Kong Corruption Commission and in 1983 were pressing the Hawke government to establish a National Crime Authority.  At the start of July 1983, a conference was convened in Canberra to consider that question.  I had been representing ASIO in the Combe Royal Commission in Canberra, and I was present, opposing the establishment of such a body.  The proposal for such a body was based on the premise, argued by Costigan, Meagher and others that Australian society faced an unprecedented threat from organised crime, such as illegal trafficking in drugs, prostitution, gambling, tax evasion and corporate fraud.  It was argued that the threat was so serious that it justified the establishment of such a body and the creation and use of extraordinary investigative powers.  There was substantial opposition expressed to the proposal for a permanent body with such powers.  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.

These compelling arguments were later encapsulated in a very influential article by Ronald Sackville, Royal Commissions in Australia.  What price truth? (reported in (1984) Current Affairs Bulletin 60 at 3-13).  Sackville, then a professor and Chairman of the NSW Law Reform Commission, later a judge of the Federal Court, maintained that “investigative Royal Commissions constitute a serious and continuing threat to civil liberties in Australia”; he argued that Royal Commissions should be used more sparingly than in recent times, that greater restraint should be shown in making and publishing findings of criminal guilt against individuals, and that Australian courts should be less reticent when asked to review the conduct and findings of Royal Commissions.

THE NATIONAL CRIME AUTHORITY

Notwithstanding the force of these arguments, the National Crime Authority (now the Australian Crime Commission) was duly established by legislation in 1983.  One of the important arguments made by those who opposed the move for the NCA was that that body should not make the decision to prosecute those it had investigated.  That argument has met general acceptance but it has the consequence that most anti-corruption bodies in Australia complete their investigations by making a report to the relevant D.P.P., recommending a prosecution and stating the factual basis for doing so.  Most D.P.Ps are heavily engaged in the prosecution of criminal offences such as murder, rape, assault, larceny and drug prosecutions.  Corruption is entirely different, usually well-hidden and much more difficult to establish, and the reports received by DPPs usually do not include witness statements and briefs upon which the DPP can immediately decide whether to prosecute.  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.

WESTERN AUSTRALIA

In the 1980’s the era known as WA Inc was in full swing.  Brian Burke had been premier of W.A. from 1983 to 1988, and a continuing concern was that his government was too close to entrepreneurs.  The WA Inc Royal Commission Report found that Labor raised millions through donations to the “Leaders Account” including $2 million from Alan Bond, $950,000 from Lang Hancock, $860,000 from Laurie Connell, and $690,000 from John Roberts of Multiplex Constructions.  The report said in 1992, “Personal associations and the manner in which electoral contributions were obtained could only create the public perception that favour could be bought, that favour would be done.”

Burke always maintained that no corruption was involved in any of his party fundraising and stressed that the Royal Commission found no evidence of illegal behaviour on his part.  This underlines the difficulty of proof of alleged corruption and the fact that if an anti-corruption body’s jurisdiction is limited to criminal offences, it would not be able to investigate Brian Burke’s pursuit of electoral donations.  But corruption surely follows money, power and influence.  It is, of course, not illegal to solicit donations to a political party.  But is it acceptable that if that party gains office, the access ensured by such donations results in the donor receiving favoured treatment from the government that has benefited from the donation?  And the problem of proof of impropriety in the government’s decision-making is enormous.  It is no surprise that the WA Inc. Royal Commission found no evidence of illegal behaviour against Mr Burke.

 

NEW SOUTH WALES

At the same time evidence of criminality and corruption was gathering force in Sydney.  In the second reading speech for the establishment of the Independent Commission Against Corruption (ICAC), in May 1988 the Premier (Mr Greiner) said he was appalled by the reputation NSW had acquired around the country and overseas.  He continued –

“In recent years, in NSW we have seen: a Minister of the Crown gaoled for bribery; an inquiry into a second, and indeed a third, former Minister for alleged corruption; the former Chief Stipendiary Magistrate gaoled for perverting the course of justice; a former Commissioner of Police in the courts on a criminal charge; the former Deputy Commissioner of Police charged with bribery; a series of investigations and court cases involving judicial figures including a High Court judge; and a disturbing number of dismissals, retirements and convictions of senior police officers for offences involving corrupt conduct.”

VICTORIA

Until comparatively recent times Victorians may have slept peacefully at night, comforted in the belief that Victoria was a State free from corruption.  That state of affairs may have arisen from there being no anti-corruption body in the State until 2011.  If Victorians had bothered to inquire, however, they would have been told that Victoria was widely regarded as the drug-trafficking capital of Australia, and that a murderous warfare was being waged between various criminal gangs.  Meanwhile during most of the last two decades, police had been searching for any possible weapon to defend the community against the depredations and multiple murders occurring here.  They settled on the innovative device of gaining the assistance of counsel for the defence of a number of those involved, Nicola Gobbo.  In the words of the High Court judgments of 5 November 2018, her actions in covertly informing to police against them “were fundamental and appalling breaches of [her] obligations as counsel to her clients and of [her] duties to the court.”  Likewise the Court said Victoria Police “were guilty of reprehensible conduct in knowingly encouraging [her] to do as she did and were involved in sanctioning atrocious breaches of the sworn duty of every police officer.”

THE FEDERAL GOVERNMENT’S TREATMENT OF TIMOR-LESTE

Many politicians and some public servants have suggested that Canberra is “a pretty clean polity,” that corruption is not a problem requiring the attention of a National Integrity Commission.  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.  And Australia has presently no body in Canberra with the function or wherewithal to guard against and expose corruption in the Federal area.  I shall return to this later.

As to Federal matters, I should mention the following.  There is now proceeding in the Canberra Magistrates’ Court a prosecution against an ASIS officer (Witness K) and a solicitor (Bernard Collaery), alleging they have infringed the provisions of s.39 of the Intelligence Services Act 2001, by communicating information that relates to the performance by ASIS of its functions.  This prosecution is proceeding in absolute secrecy, so absolute that the matter is not even listed in the Court’s daily record of proceedings.  The events giving rise to the prosecution are believed to be the following, and all are on the public record.  They are covered in Kim McGrath’s book, Crossing The Line, first published in 2017, and recently translated into Portuguese, and published in Lisbon.  The facts are well-known in Australia, and I have been writing of them since 2014.

Going back at least to the 1970s there has been dispute between Australia, Portugal, Indonesia and Timor as to an appropriate maritime boundary between Timor and Australia, the point of the dispute being the allocation of revenues from various oil and gas fields in the Timor Sea.  As it happens the majority of these fields are closer to the foreshore of Timor-Leste than they are to Australia’s.

On 30 August 1998 the people of East Timor voted 78% in favour of independence.  This was followed by the Indonesian military and militia launching into a devastating campaign of destruction.  On 20 September a United Nations peacekeeping force left for East Timor to quell the devastating violence then occurring.  East Timor was now an independent nation.  Australian aid was therefore given to enable the new nation to set up governmental and other facilities.  Talks continued from time to time between Australia and Timor-Leste on the question of the relevant maritime boundary.  At one point Ausaid sent construction workers to assist with construction of the Palacio Governo in Dili, the building in which the Timorese Prime Minister and Cabinet held their meetings.  ASIS operatives, posing as construction workers, placed surveillance devices in meeting rooms, which allowed ASIS to listen in to Timor-Leste’s Cabinet discussions, which included Cabinet’s deliberations as to Timor’s negotiating position both as to the boundary, and the future division of oil and gas revenues.

The allegation was, then, that the Australian Government obtained an enormous and hugely unfair advantage in the negotiations which followed.  Anyone who has ever been involved in commercial negotiations will need no persuasion as to the advantage that comes from knowing the other side’s negotiating position.  Negotiating parties are expected to act with good faith.  Australia’s use of the information so obtained, obviously in bad faith, was a form of contractual fraud which would have entitled Timor-Leste to withdraw from any treaty with Australia acting in such a way.  It resulted in Australia being able to achieve a favourable position in its negotiations with Timor-Leste which it used to advantage both for itself and the Australian company Woodside.

At some time after 2007, Witness K was prompted to complain to the Inspector-General of Intelligence about the legality of the bugging operation.  The Inspector-General is believed to have agreed that Witness K’s evidence could be disclosed in any related legal proceedings.  In 2013 the Timorese Government briefed Bernard Collaery to represent its interests in relation to the Sunrise dispute.  In that year Timor-Leste took its case to the Permanent Court of Arbitration in The Hague, declaring that it wished to withdraw from existing treaty commitments with Australia, and citing the surveillance activity as evidence of Australia’s bad faith in the conduct of negotiations leading to the treaty.  It intended to call Witness K to support its argument in Court.

Australia’s immediate response was to cancel Witness K’s passport.  ASIO then raided Witness K’s and Collaery’s homes and Collaery’s office.  It seized large quantities of documents from Collaery’s office, including a draft of Witness K’s affidavit and Collaery’s legal advice as to Timor-Leste’s entitlements and its strategy in the Court.

The actions of ASIS in bugging Timor-Leste’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-Leste’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.

Assume these events had happened while court action was proceeding in Australia.  The much larger, wealthier party decides it risks losing in the proceedings.  So it raids the office of its opponent’s solicitor, seizes its documents, including a draft affidavit of the principal witness and the legal advice of the solicitor, and then takes steps to prevent that witness getting to court.  It would be difficult to imagine a more serious contempt of court, and those who conspired to orchestrate those actions would be gaoled for their contempt.  When the matter came before the International Court of Justice, the opinions of the 17 judges and their shock and disgust at Australia’s actions are immediately evident from their judgments.

Late last year the Attorney-General gave his consent to the prosecution of Witness K and Bernard Collaery.  There is no justification whatever for the prosecution to be proceeding in total secrecy.  The facts of ASIS bugging, and ASIO raiding and confiscating are already well-known and matters of wide public discussion.  The only possible reason for this flagrant departure from the principle of open justice is to hide from the Australian public the full tale of mendacity, duplicity, fraud and criminal misbehaviour with which the Australian Government and its intelligence agencies have treated our near neighbour Timor-Leste.  It would also be hard to think of a stronger case for the public interest demanding publication of the events for which Witness K and Bernard Collaery are now being prosecuted.

THE CIRCUMSTANCES GIVING RISE TO THE FITZGERALD INQUIRY

I have dealt at some length with areas of criminality and corruption to be found in Perth, Sydney, Melbourne and Canberra, because I did not want Queenslanders to feel that they were alone.  But now I must turn to Brisbane in May 1987.  The circumstances giving rise to the calling of the Fitzgerald Inquiry were described with compelling force in the Four Corners television program The Moonlight State in 1987.  It showed the conspiracy of silence within the Queensland Government and senior ranks of the Queensland police, which were then riddled with corruption.  These matters had also been investigated at length by Phil Dickie and the Brisbane Courier-Mail which share the credit for provoking the Inquiry.  Corruption, known as The Joke, had been building at least since the early 1960’s.  The television program revealed the connections between corrupt police and those who ran illegal drug, gambling and prostitution rackets across the State, which were then being run with the collusion of many police who had been condoning and protecting this criminal activity.  Police who were rostered into any of these areas rapidly learnt that any attempt to uncover or prosecute the criminals involved was not only impermissible, but also highly dangerous.  Those who worked in any of these areas would rapidly be offered bribes or gifts which, if accepted, led to them becoming a part of the Joke.  To reject the offered inducement had very unpleasant and dangerous consequences, and the least of these might involve being transferred to a unit in the far north or north-west of the State.  They rapidly learnt that the corrupt network in the police force, the Brotherhood, reached to the very highest levels, and that, they would soon discover, included the Police Commissioner, Sir Terence Lewis.

In 1987, Queensland had for nearly three decades been governed by a National Party government (until 1983 with the support of the Liberal party), and for the last two decades Joh Bjelke-Peterson had been the Premier.  He had been a “law and order” politician who repeatedly used the police force against street demonstrators and strong tactics against trade unions.  He was highly popular with conservative voters, but his forceful tactics required a close association with police command, which led to his choice of Lewis as commissioner in November 1976, after the ousting of Ray Whitrod from that position.  Whitrod had attempted to deal with corruption in the police force, leading to strong opposition from the Police Union.

One of the men at the centre of operating The Joke was Jack Herbert, who had been tried and found not guilty of corruption, but resigned from the force.  Herbert, who was known as The Bagman, became responsible for collecting bribes paid by criminals in Queensland running drugs, gambling and prostitution and passing the proceeds on to the corrupt recipients.  The amount involved was substantial.  Later in the Inquiry Herbert admitted to receiving payments in the period 1979 – 1987 of $3 million, and disbursing nearly $2 million of that amount.  His evidence was that over that period he paid Lewis a total of $611,650 in connection with various illegal activities.

At the same time evidence was emerging that members of the Queensland Cabinet were involved in corrupt activities.  All of these led investigative journalists to the production of the Four Corners program The Moonlight State.  As it happened Sir Joh Bjelke-Peterson was then absent from the State, and Mr William Gunn was acting premier.  The showing of the Four Corners program suggested that the Police Force had been flagrantly lying in various respects in denying allegations of criminal activity in Brisbane.  Gunn immediately decided that an Inquiry should take place and asked the then Mr Tony Fitzgerald to conduct it.  The initial terms of reference were narrow, and the general expectation was that, like numerous other inquiries that had preceded it, the Inquiry would be brief and ineffectual and nothing would be achieved, other than easing the pressure on the Government.  Furthermore, at the outset the Justice Department and the Police Department had no intention of losing control, and intended their usual obstructive responses to apply, and reasons were advanced for restricting the Commission’s access to material.  The Departments were strongly opposed to giving access to unvetted Police and other Government documents to the Commission.

When asked to conduct the Inquiry, Fitzgerald asked for assurances that the Inquiry would be proper, honest and comprehensive and Gunn honoured these commitments to the full.  At his insistence the Commission was given total access to Police and Governmental material.  Even Cabinet minutes and like material were made available.  Other steps to assist the Commission included the provision of staff, premises and equipment.  The Government also agreed to fund the Police Union on condition that they supported the Inquiry in the search for truth.

The Commission over the next two years held public sittings on 238 days.  After these commenced, it became clear that police corruption was widespread, and wider issues needed to be examined.  It became necessary on three occasions to broaden the Commission’s terms of reference, in particular, at the instance of Mike Ahern, to include the activities of Parliamentarians.

At first the Commission’s work was stultified by denials and obstructive behaviour emanating from police quarters.  Matters changed dramatically after Fitzgerald commenced a process of offering indemnity from prosecution to certain corrupt officers on condition of them admitting corruption and being prepared to give evidence.  One of the first to do so was Kerry Burgess, followed by Assistant Commissioner Graeme Parker, and then Jack Herbert, the Bagman himself, also gave evidence under indemnity.  The evidence, particularly from Parker and Herbert, incriminated Lewis.  A large number of senior police officers were incriminated and three Government ministers were found to have engaged in corrupt conduct and were later gaoled.  Minister Russ Hinze was also identified as corrupt, but died before facing court.  The Premier himself, Sir Joh Bjelke-Peterson was charged with perjuring himself before the Commission; the jury disagreed, one of two dissidents being a member of the Queensland Young Nationals.  Joh himself had never wanted an Inquiry of this kind, and if he had not absented himself in pursuit of Federal office, it would never have taken place.

The achievements of Fitzgerald’s Commission are enormous, not least in upending and transforming Queensland’s political landscape.  The Fitzgerald Report is properly referred to as one of the most significant anti-corruption probes in Australia, indeed a landmark report.  The task that faced the Commission at the outset was horrifying and dangerous.  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.  The major recommendations were the establishment of an Electoral and Administrative Review Commission and a Criminal Justice Commission.  Successive Queensland Governments gave effect to them, first under Mike Ahern (who committed to the establishment of the measures recommended by Fitzgerald “lock, stock and barrel”) and followed by Wayne Goss; all designed for the destruction of defective police leadership and the previously self-serving political culture of patronage and unaccountability.

Among his proposals for reform, Fitzgerald rejected the possible creation of an ICAC.  At the time the Report was published, the ICAC legislation had been enacted in N.S.W.  The Costigan Commission was terminated in 1984 and the debate about a National Crime Authority had been concluded with the establishment of the NCA.  The difficulties that led Fitzgerald to reject an ICAC started with the implied necessity to use police; the fact that such powerful bodies cannot be fully supervised; government naturally would seek to control the appointment and staffing of such a body; and the quasi-adjudicative functions sometimes given to such a body.  Opportunities for abuse of power include the ability to issue warrants for arrest or search and the power to override legal professional privilege.  A particular concern lay in the abandonment of judicial controls over extraordinary powers and the risk that an ICAC “may become increasingly insensitive to the delicate balance between conflicting public and private interests, which is traditionally and best struck by judges” and the “concern that an ICAC, no matter how well-intentioned, may in time become part of the corruption problem.”  These powerful considerations may have appeared all the more relevant when Premier Greiner, the author of the ICAC legislation in NSW, became its first victim in 1992.

THE ESTABLISHMENT OF IBAC IN VICTORIA

The Victorian IBAC was established in 2012, and the process exemplified the difficulties of power and balance which Fitzgerald was considering in 1989.  Before the 2010 Victorian election, the Baillieu-led Opposition proposed that if elected, it would establish an Independent Broad-Based Anti-Corruption Commission (IBAC) that would be closely modelled on the NSW ICAC, and that would, together with the Ombudsman and the Auditor-General, provide a seamless coverage of the full range of Victorian integrity issues.  The NSW ICAC had powers to start an investigation that are very broad.  “Corrupt conduct” is defined in the 1988 ICAC Act as including any activity that could adversely affect directly or indirectly the exercise of official functions by a public official together with a broad variety of particular offences.  The ICAC’s jurisdiction is very widely expressed and it is plainly entitled to investigate an allegation amounting to misconduct in public office, including by a Minister, but is also required as far as practicable, to direct its attention to serious and systemic corrupt conduct.

In 2011 the IBAC legislation was enacted.  The Act contained a very narrow definition of “corrupt conduct” which did not even include misconduct in public office.  The definition of “corrupt conduct” was tied to the definition of “relevant offence” which was defined as including only three specific offences, and “an indictable offence against an act”; and was further limited by the words “being conduct that would, if the facts were found proved beyond reasonable doubt at trial, constitute a relevant offence.”  IBAC was required not to “conduct an investigation ….. unless it is reasonably satisfied that the conduct is serious corrupt conduct”.

The IBAC Act was plainly not “closely modelled on the NSW ICAC”.  It was inexplicable that the IBAC’s jurisdiction did not include misconduct in public office, and that IBAC could not investigate a complaint unless it could articulate facts which would constitute serious corrupt conduct in the narrow range of relevant offences.  The reality was that IBAC needed a well-informed insider’s complaint before it could investigate.  These deficits aroused immediate suspicion that the IBAC was a paper tiger, a sham anti-corruption commission.  And this dissatisfaction was a factor in the 2014 election result.

The IBAC legislation has been amended by the Andrews Labor government since its victory in the 2014 election.  But the only significant benefit to IBAC has been the inclusion in the definition of “relevant offence” of misconduct in public office.  The Andrews government is not a supporter of transparency and accountability in government.  The IBAC legislation still has a narrow definition of corrupt conduct and its jurisdictional limit is such that if the Obeid saga had occurred in Victoria, IBAC would not have been able to investigate it.  IBAC’s ability to hold a public hearing is seriously restricted by s.117 of the IBAC Act, and IBAC has conducted few such hearings (only 7) since it was established.  Notwithstanding this, the Andrews government recently passed an amendment which further restricts IBAC’s ability to conduct a public hearing.  Furthermore, the government strongly opposed an investigation carried out by the Ombudsman in relation to alleged malpractice by Victorian Labor personnel at elections, appealing unsuccessfully even as far as the High Court; and is proposing to amend the Audit Act to make it more difficult for the Auditor-General to conduct performance audits.

FEDERAL MATTERS FOR INVESTIGATION

Every State now has an anti-corruption commission.  The Federal Government does not, even though the vast bulk of money, power and influence in Australia is to be found in Canberra.  Matters that might attract the attention of such a body federally might include the decision to contract with the French Naval Group to build 12 submarines at an uncapped figure of $50 billion, when there were German and Japanese offers to do so for $20 billion, the Naval Group (and its antecedents) being mired in corruption in relation to dealings in Pakistan, Taiwan, Malaysia and Brazil; the Watergate scandal; allegations of systemic fraud in the Defence Department; misuse of MP’s stipends; the closed tender process for Paladin’s lucrative Manus Island security contracts, the contracts being worth several hundred million dollars, the company being registered to a shack on Kangaroo Island; Helloworld; the revolving door of Ministerial resignations and public service movements into private work; uncontrolled electoral donations; and Crown Casino and the alleged involvement of Chinese triad criminal gangs and organised money laundering, to mention just a few.

 

AREAS OF RISK IN THE FEDERAL AREA

Every year the Federal Government purchases tens of billions of dollars of goods and services.  One of the largest is the Defence Department.  ACLEI is the body which is usually cited as the principal protection against corruption in the Federal area.  But ACLEI’s role is detecting and preventing corruption in law enforcement bodies.  It does not have jurisdiction over most public servants, Members of Parliament, their staff, and most Federal bodies or persons making decisions or providing services involving the expenditure of Federal funds.  It has fewer than two dozen investigators, and an annual budget of less than $14 million.  In particular it has no jurisdiction over procurement, the moneys spent by, say, Defence or Health Departments.  Serious concerns have been regularly raised about ACLEI’s capacity over the last decade.

There is little or no control of lobbying in the Federal area.  Ethical lobbying is a perfectly normal part of any democracy but there are few rules, and such as exist appear never to be enforced.  Hundreds of lobbyists walk the halls of Parliament without scrutiny.

Risks of corruption have also increased in recent years for a variety of reasons.  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 for the private sector.

Over the last few years there has been an increasing lack of trust in government and public servants, shown by consistent polling by Transparency and other bodies, accompanied by a strengthening demand for the creation of a National Integrity Commission.  This has been pursued by a variety of groups, Transparency, Griffith University and A. J. Brown, the Accountability Round Table, and the Australia Institute’s Judges Group, together with various individual Parliamentarians such as Andrew Wilkie, and certain journalists.  34 senior judges signed a letter to the Prime Minister calling for the establishment of a National Integrity Commission with the power to hold public hearings.

DEFICIENCIES IN THE FEDERAL SYSTEM

The deficiencies in the present system have been identified as being first that there is no single body, in the Federal sphere, with overall control and full jurisdiction to investigate, discover and expose corruption.  The Federal Government’s approach has, for decades, been that there should be a range of bodies and government initiatives to promote accountability and transparency.  It follows from such shared responsibility that each body is likely to assume all is well because someone else is making sure nothing corrupt is occurring.  Corruption then can fall through the gaps.  Those dissatisfied argue that relying on cooperation between a range of bodies covering only part of the activities of the Commonwealth was never a satisfactory approach and has been shown to be completely ineffective.

There is no adequate control of political donations, lobbying or Ministers, members of parliament or public servants leaving a position and moving to private industry.  There is totally inadequate Freedom of Information in the Federal sphere, and seriously flawed rules for protecting whistle blowers.

By December 2018 even the Coalition had proposed the establishment of a Commonwealth Integrity Commission, thus acknowledging that the present system is inadequate.

PROPOSALS FOR THE ESTABLISHMENT OF A N.I.C.

The various parties calling for the establishment of a N.I.C., other than the Coalition, had arrived at agreement in fairly general terms as to how such a body should be constituted, fine details, of course, remaining to be worked out.

It is generally agreed that the N.I.C. must be an independent statutory body, independent of the Federal executive, permanent and protected from political intervention, governed by a Chief Commissioner appointed on the recommendation of a bipartisan parliamentary committee.  Two Deputy Commissioners should be appointed on the same basis.  The N.I.C. must be adequately funded, sufficient to enable it to be effective.  The amounts suggested by the Coalition or Labor up to now have been in the order of $30 to $50 million annually, whereas after taking into account the funding of bodies such as ICAC and IBAC, the better view is at least $100 million annually.

CONTENTIOUS AREAS

There are at least three contentious areas.  The first is the breadth of jurisdiction, taken with the definition of “corrupt conduct.”  The N.I.C. must have a broad jurisdiction to investigate any conduct of any person that could affect the impartial or honest exercise of public administration.  The High Court in the Cunneen decision adopted a very narrow interpretation of the ICAC legislation in circumstances where a decision had been made to investigate a family member who was asked to undertake a breath alcohol test after a motor vehicle accident.  It was suggested that advice had been given to refuse to take the test on the ground that the driver had chest pains.  It was plainly an error in the exercise of ICAC’s discretion to investigate the event, since what occurred could never have been regarded as either systemic or serious corruption.  The effect of the High  Court’s decision was, however, to invalidate nearly a third of ICAC’s then body of work and required immediate legislative intervention.  Most legal analysts prefer the minority opinions of Justice Gageler in the High Court and Chief Justice Bathurst in the N.S.W. Court of Appeal.

At the heart of this controversy is the question what is corruption.  The narrow view begins with an insistence that unless a crime of some kind is involved there is no corruption.  The broader view was encapsulated in Andrew Wilkie’s comment in relation to the recent Crown Casino allegations that “by my standards and I think the standards of many in the community, it is patently a corruption of governance and proper process when a politician takes a large donation from someone and does something for them in return”.  Wilkie continued “the exchange of favours that occurs routinely in federal politics may not be criminally corrupt but … to any ordinary member of the public it was completely corrupt morally: and that stuff goes on in this place every day.”

In like measure it has been argued that there should be a permanent ban for at least a period of years on former Federal ministers having any business association at all in any matter where the Federal Government is involved, taking into account the recent appointments of Julie Bishop and Christopher Pyne; the point being that they would only have been appointed because of their knowledge and contacts and which is unfair to those companies and interests which do not have this direct access.

THE ABILITY TO HOLD PUBLIC HEARINGS

The second disputed area is the ability to hold public hearings.  Public hearings are seen by most Commissioners of State anti-corruption bodies as the key to investigating and exposing corruption, while the opposing view is that bodies such as ICAC become kangaroo courts, trampling on people’s reputations and destroying the lives of anyone mentioned in the hearings, as well as making it impossible to prosecute fairly those charged with offences after public hearings.

The role of anti-corruption bodies is first and foremost to discover and expose corruption.  Public hearings expose corruption and misconduct to the public; they increase public trust that allegations of corruption are being investigated fairly and in the public interest; they make investigations more effective by encouraging witnesses to come forward with new evidence; they educate the public sector and community about corruption and misconduct; they deter others from engaging in corruption; and they improve the integrity of the public sector.  A good example of each of the foregoing is the first public hearing conducted by IBAC, Operation Ord, which demonstrated serious criminal corruption in the Education Department.  Among the consequences of the public hearings was a significant spike in fresh allegations to IBAC about corrupt conduct in the education sector, and the Department itself made immediate changes to its procedures to ensure that the improper conduct could never recur.

That a N.I.C. should be entitled to hold public hearings has been considered by courts and judges on numerous occasions.  In the BLF case, Justice Mason stated that an order that a commission proceed in private “seriously undermines the value of the inquiry, it shrouds the proceedings with a cloak of secrecy, denying to them the public character which to my mind is an essential element in public acceptance of an inquiry of this kind ….”  The use of public hearings has been supported by former Chief Justices Murray Gleeson AC, and Sir Gerard Brennan AC, and by Fitzgerald himself in the following passage –

“The proposal to close anti-corruption hearings and repress information on public issues to save those involved from embarrassment demonstrates a fundamental ignorance of democracy.  Effective democracy depends on informed voters.”

Accepting that there is a serious danger of damage to reputations from public hearings, it is accepted that not every hearing should be public, that in every case there should be thorough and complete investigation first to ensure that the N.I.C. has correctly identified the person or body whose reputation will be damaged is the offender responsible.

The Hayne Commission, lasting nearly a year, conducted its hearings in public.  The IBAC Ord investigation demonstrated the effectiveness of a public inquiry.  Much of the Fitzgerald Inquiry was conducted in public hearings.  One might add that Parliament, by the Judicial Misbehaviour and Incapacity (Parliamentary Commissions) Act 2012 requires hearings of investigations into judges alleged to have been guilty of misconduct to take place in public (s.23).

THE NATURE OF THE N.I.C. REPORT

The third disputed area relates to the report of the N.I.C. and the nature of the findings to be made in any report.  The N.I.C. is not to be entitled to prosecute people incriminated during its investigations.  The N.I.C. is required to act fairly during its procedures, and is to investigate only serious or systemic allegedly corrupt conduct.  To limit unwarranted risk to reputations, the N.I.C. should not be entitled to make findings of corrupt conduct, rather it should make findings of fact.  These should be open to judicial review, enabling anyone who alleges error to have that claim investigated.  If a prosecution is contemplated (as occurred after the IBAC’s Operation Ord) the unfairness to an accused can be dealt with by delaying the commencement of the prosecution and by appropriate directions from the trial judge.

THE COALITION PROPOSAL FOR A C.I.C.

The Coalition’s proposal for a Commonwealth Integrity Commission is set out in a lengthy document dated December 2018.  According to recent statements by the Attorney-General, his department is preparing a bill to submit to Parliament for such a body, which will not be ready for submission before the end of the year.  The draft has been subjected to much adverse comment, including from the Law Council of Australia, so it is possible that aspects of the Coalition’s draft will be changed.  As the proposal stands, it has many aspects which those who seek a powerful N.I.C. would challenge.

  1. The proposed body is to be divided into halves, the stronger consisting of a law enforcement integrity division, the weaker covering the remaining public sector, including parliamentarians and their staff. It is argued that law enforcement bodies have access to powers, information and influence and thus present a heightened risk.  There is no obvious basis for such a heightened risk; on the contrary, experience suggests that corruption in the public sector is likely to be more deeply concealed, more prevalent and difficult to detect than in the law enforcement area.  The absence of the stronger investigatory powers in the public sector suggests that the intention is to make corruption in this area more difficult to detect.  It will certainly give added protection to parliamentarians and their staff, and the division into halves will lead to demarcation disputes and delay and costly litigation.
  2. The jurisdiction and definition of corrupt conduct

The Coalition model proposes that the C.I.C.’s primary function will be the investigation of serious criminal conduct in the public sector, saying: “It will only investigate criminal offences, and will not make findings of corruption at large.”  But there is a range of serious corrupt conduct that does not constitute a criminal offence.  To limit the N.I.C.’s investigations in this way is a serious shortcoming for the Coalition’s proposed C.I.C.

  1. The threshold for an investigation in the public sector

The Coalition proposal continues that the public sector division of the C.I.C. “will be responsible for investigating “corrupt conduct” where the commissioner has a reasonable suspicion that the conduct in question constitutes a criminal offence.”  This threshold would effectively prevent the investigation of most matters where the nature of the information coming before the C.I.C. does not allow the agency to form the necessary reasonable suspicion.  This will stop many bona fide investigations at the outset.

 

  1. Who may be investigated?

The Coalition’s proposal excludes anyone outside the public sector who dishonestly or improperly influences or attempts to influence public decision-making, e.g. a fraudulent tenderer for Government procurement.  This wider jurisdiction is now available to most State ICACs and its exclusion is a most serious limitation on jurisdiction at the Federal level.

  1. Whistle blower complaints

The C.I.C. proposal prevents an individual making a complaint in the public sector division.  The complaint must come from a department or other agency.  The restriction appears intended to stifle whistle blower complaints, like the recent proposal made in Queensland to require intending complainants to make statutory declarations.  The result will foster public sector corruption and disadvantage a potential whistle blower.  It will stunt the investigative process at the outset.

  1. Public hearings

The C.I.C. document is explicit that there will be no public hearings in the public sector division.  The Coalition’s proposal is that not only will no findings of corruption be made, but also that the C.I.C. will not issue any public report.  It says that “at the conclusion of an investigation, the C.I.C. will be able to refer a criminal brief of evidence to the Commonwealth DPP.  It will not make findings of corruption or other criminal offending.”  It follows that if an investigation has been commenced, the public will not be aware of that investigation unless and until a criminal charge is actually made public by its commencement in a court.  There is no provision for any public reporting by the C.I.C., even if an investigation should discover misconduct.

It follows that the C.I.C. 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 any investigation until a prosecution is actually commenced.  It will be a body with little or no ability to discover public sector corruption, and no corruption will be exposed by it.

CONCLUSIONS

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.

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

Andrew Wilkie said recently that returning favour for favour goes on every day in Parliament.

In the two years around the 2016 election, the Parties received nearly $400 million, a large part in donations.  Natural reciprocity means payments all too readily result in favours (Gageler J in McCoy and WA Inc.).  But if favours aren’t given in return, the payments will stop.  Ministers and public servants, retiring from office and at once taking highly paid private industry posts, offer access, connections, experience and knowledge, huge advantages in lobbying for the inside running, unfair to the rest.  The C.I.C. model is so framed to prevent anything short of flagrant criminal activity being investigated, because the Coalition, many public servants, and some in the Opposition see no impropriety in returning favour for favour, or the revolving door producing a lucrative retirement.

Ministers, members of parliament and public servants are intended to remain free from investigation by the C.I.C., so long as they don’t embark on brown paper-bag bribery.

 

THE ATTORNEY-GENERAL’S COMMENTS

Before the election I had a debate with the Attorney-General on the subject of the proposed N.I.C.  I set out shortly what the proposal from the Judges Group constituted and said that we wanted a body that could investigate matters of the kind that I’ve previously mentioned.  Mr Porter’s response did not attempt to engage with my argument.  He described my views as “kooky,” “absurd,” “bizarre,” “odd” and “extraordinary,” and criticized 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.  He mentioned Senator Dastyari as not being among my proposed suspects; again it has escaped his attention that Mr Dastyari has already been thoroughly exposed and has been forced to leave Parliament.  Mr Porter was careless with the truth in his comments because on three separate occasions he claimed that the Law Council of Australia had endorsed the Coalition model.  Not only has the LCA not done so, its submissions made significant criticisms of the Coalition model.

CONSISTENCY WITH THE FITZGERALD REPORT

The approach for which I and others contend, contrary to the Coalition model would be completely independent of Government and the Executive.  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 N.I.C.’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 N.I.C. could not become part of the corruption problem, as Fitzgerald legitimately feared.  Analysis of the existing state of affairs in Federal Parliament and the public service has demonstrated the existence and extent of serious possible risks of corruption.

Australia needs a strong anti-corruption watchdog with a genuine and demonstrated ability to investigate, discover and expose corruption in the Federal sphere.  The Coalition’s C.I.C. plainly cannot meet that requirement.

 

The Hon. Stephen Charles AO, QC