Victoria needs better tools to fight corruption


Stephen Charles

(The Hon Stephen Charles QC, former Judge of the Court of Appeal, Supreme Court of Victoria, is a member of ART)

The Education Department is just one target known to require IBAC attention.

Victorians might not realise our state has the worst and least effective government integrity system in Australia. Until recently, it had no anti-corruption commission; a freedom of information system subverted by governmental practices enabling exemption from disclosure; no regulatory system requiring disclosure of political donations (we have to rely on inadequate Commonwealth legislation); a Public Disclosure Act that fails to protect whistleblowers, and an Audit Act that prevents the Auditor-General from making proper investigations by “following the dollar”. With no effective integrity system, it is hardly surprising corruption has gone undiscovered, and that many might have believed there was little corruption in the public service and that our state was pretty “clean” compared with NSW.

Any such belief must have been rudely shattered by the Independent Broad-based Anti-corruption Commission’s investigation, Operation Ord, into the Education Department, which oversees $4 billion of the state school system’s annual budget. The public disclosures of Operation Ord have already demonstrated that millions of dollars have been transferred to “banker schools” and used by senior officials as a slush fund to pay for travel, food, alcohol and other expenses. At least six schools have been involved, along with several senior department officials.

Corruption is insidious, usually secret, and hard to identify and eradicate.

Similarly last year, in the IBAC’s Operation Fitzroy, we learnt that two Transport Department project officers awarded $25 million of public money over a seven-year period to companies they had set up, making a personal profit of more than $3 million, the work carried out being allegedly shoddy. Evidence from one of the officers was that a culture had developed within the department of turning a blind eye to improper relationships between staff and contractors.
Illustration: Jack Chadwick

Illustration: Jack Chadwick

Anyone who believed Victoria was clean and largely free from corruption before these disclosures cannot have been following the very damning reports from the ombudsman, George Brouwer​, in the years before the IBAC was set up. Over 10 years, Mr Brouwer repeatedly in his reports to Parliament drew attention to matters such as the conduct of councillors at the Brimbank City Council; the problems of conflict of interest that pervaded local government; repeated examples of public officers misusing their position to obtain a personal benefit; maladministration in the Victorian Building Commission; and the consistency of complaints demonstrating conflict of interest both in local government and the public sector. Mr Brouwer’s report in March 2014 on conflict of interest in the Victorian public sector is of particular significance, including case studies demonstrating the loss to the community such a conflict of interest causes.

Given that corruption is insidious, usually secret, and hard to identify and eradicate, there are many issues that in recent times have cried out for investigation by a body such as the IBAC. The position is made worse in Victoria by increasing secrecy over government policy development and decision making, and the process of arriving at government agreements. Areas of concern ripe for an IBAC investigation would include urban planning (for example, the Windsor Hotel and Phillip Island debacles, and the practice known as “flipping” when a developer obtains a permit for a city property and later sells it to a second developer at a massive profit); the enormous time and expense of the development of Myki​ and the desalination plant; the activities of some construction unions and their interaction with public officials; public-private-partnerships; political funding, and the East West Link side-letter.

The NSW Independent Commission Against Corruption has powers that were intended to be so wide as to be virtually unlimited. By contrast, the IBAC has a much more limited power of investigation. The IBAC Act still prevents it using its full investigatory powers until it is able to articulate those facts that would constitute one of a narrow range of relevant offences, and also would constitute serious corrupt conduct. The narrow definition of corrupt conduct still does not include misconduct in public office. The High Court has often shown it will interpret legislation of this kind very narrowly. The IBAC commissioner must still require his staff to identify the indictable offence involved before an investigation can begin, which usually means the IBAC needs a well-informed tip-off before it can start a full investigation. The IBAC at present could not investigate matters such as the Obeid family’s involvement in the grant of mining licences in the Bylong Valley without such assistance.

The IBAC Act requires significant amendments as soon as possible. A much broader definition of “corrupt conduct”, including misconduct in public office, must be introduced. The high threshold to a full investigation, such as the absurd requirement that IBAC should at the outset be able to articulate facts amounting to an indictable offence, must be removed. Any division between a preliminary and a full investigation must be eliminated. In effect, the Parliament must trust the commissioner and his staff not to investigate trivial or frivolous complaints. The present requirement that IBAC only investigate “serious corrupt conduct” should be removed, the matter being left to the commissioner’s discretion.

Only when these amendments are enacted will Victoria have a properly armed and effective IBAC.

Stephen Charles, QC, is a former judge of the Court of Appeal. He was one of four advisers to former premier Ted Baillieu on the establishment of the IBAC.

Share This