Pearls and Irritations

Citizens who want an effective agency to weed out corruption and maladministration from Australian public life would do well to get involved in the National Anti-Corruption Commission debate. It is never going to be any better than the first model that goes through the parliament over the next few months. If history in state and territory jurisdictions is any guide, only whittling down of any powers granted now is in prospect.

While what we have is in certain respects a good start, the draft bill has weaknesses intended by the government to make the commission less effective than it could be and falling short of the model that government implied would be enacted.

Some of the weaknesses, particularly in relation to an effective power of strangling corruption investigations with a national security angle are of bureaucratic invention, rubber-stamped by Attorney-General Mark Dreyfus, who was never much disposed, now or when he was Attorney-General under the Gillard and Rudd governments, to critically question departmental advice. In much the same way as in the Collaery persecution, the Attorney-General is empowered to sign FOI-style certificates preventing the NACC from examining a host of materials as being exempt under provisions like FOI exemptions.

That creates two problems. First, his decision is unappealable, even in the courts (as in the Collaery case, where a succession of judges was not satisfied by similar certificates. Second, they are not subject to the overriding public interest exceptions that the FOI Act provides, other than a vague (and unappealable) requirement that the Attorney-General “must be satisfied on reasonable grounds that the certificate is appropriate and necessary to protect the public interest.” No doubt Dreyfus himself would agonise over such matters and be more diligent in considering where the true public interest lies than some of his more recent predecessors. But if he plays it cautious – and caution is the hallmark of his style – there is no one able to go behind his decision, to examine the materials to see whether his feelings were justified, or able to cross-examine security officials who always fear the worst from any disclosure.

It is true that a subsection says that “to avoid doubt, causing no more than embarrassment to or prejudice to a person’s reputation is not a ground” able to establish a sensitive document claim. That has been the law for more than 40 years, as Dreyfus well knows. But whether he applies it will be hard to establish, because no one can look behind his certificate. The existence of that rule has not stopped any number of security agencies demanding protection, when they are only covering their own incompetence, mismanagement and unconscionable behaviour. For general discouragement and the maintenance of a reign of terror they have always demanded searches for leakers, except when they are ministers or the leak has suited agencies, and stiff punishment for offenders. The Attorney-General’s department – the one security agency not subject to scrutiny by the under-powered Inspector General of Security — has always been diligent in preparing documents declaring serious risks of apocalypse if any secret escapes. Their case is often the more cogent because (for coalition ministers) it can be married to political claims that critics are soft on national security, and for Labor ministers, including Dreyfus, a terror that deviating from coalition national security alarmism by more than a millimetre might be politically exploited by Peter Dutton.

Clear limits to Dreyfus boldness

Dreyfus might be said to have shown some slight courage in discontinuing the Collaery prosecution. But he was extremely cautious about taking his gallantry too far. Why else does the Attorney-General continue to permit the prosecution of David McBride for disclosing to the ABC serious war crimes in Afghanistan and official inaction? It was just such disclosures which forced an administration always given to cover-up to commission inquiries such as the Brereton report. And it was entirely typical of the defence department’s response to public disclosure of its cover-up that the book gets thrown, not at the criminals, but the person who brought it to public attention.

Likewise with the prosecution of a tax whistle-blower, also proceeding. Dreyfus will not act because he fears that taking a principled stand supporting whistle-blowers disclosing government iniquity may encourage future whistleblowing, or may make investigation, prosecution and punishment of breaches of our draconian secrecy laws subject to a public interest test.

But the most serious disappointment, and breach of faith with the draft bill comes from its attempt to make public inquiries very rare. That owe most to Dreyfus’s own judgment and inclinations, rather than the consultation process, pressure from his party, or rear-guard resistance from the bureaucracy. Even if it suits them.

The bill presumes that all inquiries are in private. It empowers the commissioners to hold an open hearing only in exceptional circumstances. The tone of the imperative suggests that this would be rare, as it is with the weakest and least effective state and territory-anti-corruption commissions. Before the election, the Morrison government made it clear that it was deeply opposed to any commission which had public hearings, on the grounds that this might unfairly destroy reputations or compromise future trials. Any number of mostly spurious examples of allegedly ruined reputations were cited, including the humiliating questioning of NSW premier Gladys Berejiklian about her love life. In fact, the NSW ICAC was not asking improper questions of Berejiklian. The allegation before ICAC — confirmed during the hearings even if no report has yet been issued – was that she was showering her lover, then a member of parliament, with grants to his electorate and other goodies designed to prop up Liberal ownership of his seat. Rorting grant schemes on partisan grounds is just the sort of matter capable of being found to be corrupt, whether in NSW or, one hopes, at Commonwealth level.

Before the election Labor pretended enthusiasm for open hearings. It was their big point of distinction with Morrison

As Scott Morrison, and various of his Attorneys-General and other ministers (including Peter Dutton) went on and on about kangaroo courts, Labor was unmoved. It favoured open hearings. Not with every investigation being in the open from the moment that an allegation of corruption was made, as Morrison ministers implied, knowing this to be false of other Australian commissions. When an allegation was made, it was dealt with confidentially. But investigated. The investigations, not yet out in the open, could include requiring the production of documents by agencies and people accused of being involved in corruption. It was only when such commissions are satisfied from this investigation that “serious or systemic” corruption was involved, that the question of a public hearing arises. If the corruption is not serious (i.e., able to be dealt with by the agency itself, or by an ordinary police investigation) or if the corruption is thought to be a one-off rather than systemic, ICAC-like bodies drop the matter.

Before and during the election, one did not hear from Labor talk of restrictions on open hearings once a prima facie case was established. Labor was being outflanked by the Greens, Independents, and the Teal independents, on determination to have an anti-corruption body. Labor (particularly Mark Dreyfus, who ten years ago didn’t think there was much corruption to be worried about) was slow to convert to the idea of a standing body focused on improving the quality, the transparency and honesty of public decision-making. The cause may have acquired momentum and a sense of urgency because lawlessness and plain corruption of government, led from the ministry, became increasingly obvious under the Morrison government. But it was independents such as Helen Haines, not Dreyfus or Albanese, or earlier Bill Shorten at the forefront of making the case. In the competition for votes from among those who wanted an active and powerful commission with teeth, it may not surprise that Dreyfus was not emphasising any of his personal reservations favouring private hearings. But he was giving a wrong impression.

He clearly seems to favour the Victorian IBAC system, where public hearings are rare. It is forbidden from holding them where they will cause unreasonable damage to a person’s reputation, safety or well-being. In NSW, ICAC can hold open hearings where it judges that it is in the public interest to do so. Dreyfus’s test may be in the middle, but is intentionally far closer to Victoria’s, despite his pretence, under strong criticism, that he accepts that public hearings have the benefit of exposing corrupt conduct to the public and making the public aware of it (and some of its perpetrators). These considerations must be balanced against the risk of unfair prejudice to a person’s reputation, privacy, safety and well-being, whether evidence is confidential, and whether someone might have a special vulnerability to being exposed for criticism.

Reputation is important. But so is the demonstration effect of exposing and punishing official corruption.

I am not indifferent to privacy and reputational considerations. But I judge that recent damage done to the reputation of the public administration, to the honest and equitable distribution of government services to citizens, and to public confidence in government and its stewards is a powerful public interest consideration to be weighed against it. Particularly when most of the worst malefactors have been politicians, or senior public officials too gutless to stand in the way of the most obvious and egregious rorting, breaches of the financial management regime, and abuse of power. If the NACC’s public hearings focus on the serious and the systemic – and there has been enough of that around that small-fry cases can be ignored – passing damage to reputation will be a deficit that is minor, at worst. It is far more important that the public understand that serious efforts are being made to stop the rot, to expose the crooks, and to send a message to anyone seeking to corrupt good government.

In NSW, the Labor Party as much as the Liberals and the Nationals fear ICAC for its success in exposing criminality, corruption and bad-faith government by ministers on both sides of politics. Wise and experienced politicians know that eventually some of their own colleagues will be caught, often for matters which they regard as minor misdemeanours even though the public does not. The political mood may favour a powerful anti-corruption agency, but there will always be those trying to undermine it, even as they pretend zeal.

Some of the provisions of the bill bear the hallmark of those who want corrupt political business as usual. Thus, while the bill is a pleasant surprise in its ruling on those who could be caught up in an investigation, there are significant omissions. Private sector businesses and non-profit bodies taking money from the Commonwealth to perform services to Australians can be held to be corrupt over the way they get and manage their contractual obligations. Corruption is widely defined as conduct by anyone (not necessarily a public official) that adversely affects the honest and impartial exercise of a public official’s powers, functions or duties, any breach of public trust, abuse of office, misuse of official information or any conduct of a public official involving corruption of any other kind.

It could plainly include the actions of lobbyists, at least if they were urging improper action. It involves ministerial staffers as much as public servants, ministers and MPs in their official duties. But not their political duties. Given the lack of an official duty statement for an MP or senator, the lines between can be fluid.

Party officials remain free to rort electoral funding laws

But this anti-corruption bill does not embrace the actions of officials of a party, though such officials can be (and often are) insiders able to skirt around the law in relation to pre-selections, election fundraising, and the stewardship of the $100m or so that governments give, almost without conditions, to political parties these days. Such people could come under scrutiny if the Australian Election Commission gave NACC a reference, but historically the AEC does little to police electoral legislation. It is by no means clear, for example, that NACC would have authority to investigate the arrival in the NSW branch of the Labor Party of $100,000 in used $20 notes, enclosed in an ALDI bag, purporting to be for federal purposes, rather than, as in the actual case, NSW branch activities. NACC jurisdiction would only be clear if it could be attached to an actual bribe of an actual politician.

Or an attempt to evade Electoral Act fundraising laws, though there has never been any appetite to prosecute even obvious rorting. The big party organisations are in a continual unholy alliance to evade such laws, even as they sometimes complain about special arrangements their competitors have.

I would call such matters corrupt and corrupting, and a very worthy matter deserving early attention from NACC.

Investigating such matters in NSW certainly proved worthwhile with the used $20s, and with some of the less attractive forms of Liberal Party fundraising apparently connected to hopes of a water privatisation. The exposures led to reforms, but they bore the hallmark of being resentfully implemented in deep embarrassment at being caught and exposed. Not about a revived intention to do only the proper thing. The cynic might remark that it was only party machine people caught out. A good reason complacent Labor people might say why the public interest requires that party officials should be out of NACC’s purview, and why they should not have their reputations, privacy besmirched, and their safety and well-being put at risk.

Another fit subject not obviously covered by NACC’s operating brief is the revolving-door syndrome, whereby retiring ministers and even some MPs quickly get jobs lobbying and peddling access to their former colleagues, going on boards of enterprises with whom they often dealt as ministers, or getting appointments to sinecures on the Administrative Appeals Tribunal or as Ambassadors and High Commissioners. Going to work for the people to whom you recently gave a big government contract, or consultancy, is not unknown in military and public service circles either. Heaven forfend that anyone might suggest that the prospect of such a job might influence a person in the way she, or he, carried out past or future functions. The NACC bill needs a lot more work.

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