Sooner or later, the integrity commission will take out a Labor minister

Jun 15, 2022
The red compass needle points to integrity
The last nine years of coalition abuse of patronage powers – the worst under Scott Morrison – saw new types of questionable appointment. Image: iStock

One of the reasons why some of Labor’s old hands, particularly on the right, regard the prospect of integrity legislation with less than complete enthusiasm is that sooner or later – probably sooner than expected and maybe even before the next election – it will be the instrument of the downfall of a Labor minister.

In Labor’s ideal world, the new Integrity Commission, fashioned somewhat like the NSW Independent Commission Against Corruption, would be spending the next five years totally absorbed with the Liberal and National Party misbehaviour of the past nine years. There’s a lot there – some of which demands extensive public exposure if only by way of demonstrating to future politicians and public servants just what conduct is regarded as unethical or corrupt.

But even a commission determined to root out and punish the most substantial misdemeanours of the past government will appreciate the need to be seen as bipartisan, and the advantages of looking forward not backwards. One of the positive advantages of the Labor and independent model for a tough integrity commission, as opposed to the pusillanimous Morrison/Porter model is that the commission itself, not the government, will determine what gets investigated.

A positive advantage from the public’s point of view, that is. A government, even a generally virtuous Labor government, might have a different view if it had no control over the timing, the target or the type of an integrity investigation of one of their own.

This is not to suggest that Mark Dreyfus, or the government will go soft with the integrity legislation coming before parliament. It is not, first of all, only their pigeon. The idea did not originate in Labor, and other sponsors would have a field day – at great political cost to Labor – if what went forward was weaker than, say, the bill put forward by Helen Haines. Anyway, it is right at the moment a terrific whip with which to birch the opposition, particularly its frontbench.

But one can understand some ambivalence once the commission turns its eye on the incumbents. Leave pork-barrelling aside for the moment, what about patronage – the appointment of folk to boards and commissions?

Installing mates has until recently been defended by politicians on both sides as “OK , because everybody does it, or has done it in the past.’’  It’s an important part of the spoils of government by which one rewards friends and punishes enemies, often with advertisement, interviews or any public process of assessment. Or installing friends, relatives, failed politicians and party donors into quasi-judicial positions, in the manner of Christian Porter and Michaelia Cash, with jobs secure even against a change of government.

About 15 years ago, the incoming Rudd government decided that one of the most senior ministers, John Faulkner, a man of impeccable probity would take up a position as Minister for Integrity, watching government action for signs of abuse of power and attempting to establish institutional processes – including what was intended to be stronger FOI legislation — that would make such abuse more difficult.

Patronage is as problematic as pork-barrelling

Faulkner was down on patronage, a time-honoured process among all parties by which gaining government gave control of appointments to a vast array of boards, commissions, councils, galleries and committees, as well as the nomination of judges. Most of the positions carried handsome salaries or sitting fees, and some conveyed considerable prestige and power.  Patronage also involved the power to appoint ambassadors and high commissioners.

In days when politics were less polarised, that did not necessarily mean that all appointments were party warriors unwilling to see issues other than through their sponsors’ lenses. Like most of their predecessors, Gough Whitlam, Malcolm Fraser, Bob Hawke and Paul Keating were fairly balanced with major appointments such as to the ABC, arbitration commissions, the reserve bank, or, in those days, the boards of bodies such as Qantas, Telstra and the Commonwealth Bank. Some of those appointed might have party backgrounds.

In some cases, those backgrounds might be more significant than their qualifications, and in many a case, there was fairly open lobbying among non-parliamentary Labor insiders on the basis of “you owe me”. In many cases, minor appointments seemed to be rather more from the minister’s factional allies than the party at large, but even then, some who were appointed might have no party background, or might even have been moderate ex-members of the other side of politics.

Faulkner identified a small range of patronage positions which need not go by advertisement, or interview by a panel. These included senior judicial appointments, and positions on a number of important boards, such as, I think, the ABC and the Reserve Bank. But, under his system, the overwhelming number of patronage appointments would be made after advertisement, interview by an independent panel and recommendation by that panel about which candidates were qualified, and of highest merit. Being a donor or a mate did not score on the merit assessments.

The minister was not necessarily obliged to appoint the person recommended, but generally should at least select from the short list. The composition of the board might lean to the general disposition of the government of the day, but one could at least be sure that those on it were qualified for the job. Over time it has also become clear that those appointed as directors of boards had independent duties to shareholders, even government. Those who interpreted their appointments as sinecures, or who regarded themselves as mere instruments for imposing the minister’s will at a distance could find themselves in tricky positions before regulatory agencies, parliamentary committees or even the courts.

In due course John Faulkner came to be required for more active duties (as minister for defence) and he was replaced as minister for integrity by Senator Joe Ludwig, the son of Queensland Labor powerbroker, Bill Ludwig, and the living embodiment of placeholding without conspicuous merit.

The general principle died away and was abandoned altogether by the incoming Abbott government. This government made it very clear to all people holding patronage positions who had been appointed by the Hawke or Keating governments that they should go immediately. There was no pretence of merit examination, and even some people of Liberal or conspicuously neutral background were told to go, more or less because they were tainted by having taken the Labor shilling.

It was not entirely unknown for a board to be cleaned out, or at least for obvious patronage appointments, sometimes including patronage diplomats, to be asked to go on a change of government. But the Abbott purges involved all boards, even against the instincts of relevant ministers. The extra added ingredient was that there was a conscious effort to make sure that all new appointments were warriors in Liberal ideology, even on a board, such as the ABC, expected to be independent of government.

John Howard had long felt that the Labor Party and wet people of moderate liberal party sentiment had “captured the institutions” to the point where changes of government did not much matter, because most of the middle-of-the-roaders in charge thought in the same way. He wanted institutions of government, at least while he was in charge, to reflect conservative social, cultural, economic and philosophical ideas.

Howard may have been a culture warrior, disposed to create culture-war distractions over issues of tolerance, sexuality, discrimination or the teaching of Australian history. But he did not usually require or expect that those he appointed took public positions or fought them to a standstill. Up to a point Abbott did, even if many of those appointed – a vast number were from the Institute of Public Affairs and similar controversialists bodies – did not need much encouragement.

And sometimes, new boards do so much damage to institutions that it is difficult to re-create them after a change of government. [Though when Trump was US President, he discovered he could do almost as much damage by not appointing bosses at all, leaving organisations foundering without leaders.]

There is of course no harm in putting a number of ratbags of the right on to boards, particularly if they balance off ratbags of the left or the centre. The debates they excite can bring issues to a focus and improve outcomes. But the board as a whole must be sensible and not eccentric, even if it operates by a new culture and philosophy.

Sometime rather more than “being one of us” is necessary as a qualification. And usually, the objects clause of legislation, is as important a guide as the ministerial riding instructions.

Time to drain the swamps of the urgers and cronies – on both sides of politics

The last nine years of coalition abuse of patronage powers – the worst was under Scott Morrison – saw some new types of questionable appointment. A number of people, from the Governor-General, David Hurley down, were appointed to jobs they would take up only after the term of the previous government had expired. As it happened, Morrison had been re-elected some months before Hurley took up his appointment, but Bill Shorten, who might otherwise have been prime minister should not have been presented with a fait accompli. Hurley is a decent man and not any sort of political crony, but he was unwise to accept the offer when he did.

It was one thing to put a fester of former Liberal representatives, Liberal donors and friends and relations of Liberal ministers into jobs on the Administrative Appeals Tribunal or the Fair Pay Commission, without even the pretence of interview or demonstration of merit. The ongoing damage to the credibility of the tribunals is only one of the results.

But it was another thing altogether to make election-eve announcements of further appointments, some diplomatic, to be taken up during the lifetime of the current government.

One day, I expect a court or an integrity commission will examine whether such post-election stacking is ethical or possible. Indeed, I predict that mere stacking will be found to be corrupt. Indeed, a time may come when all obviously political appointments expire on a change of government, like the tenure of minders. Even tribunal members whose names had not emerged from a public process organised by public servants.

Of course, government could give an integrity commission some guidance – for example by legislation governing patronage appointments, perhaps (I hope) along the lines of the Faulkner reforms. If it doesn’t, ministers (from this government or a future one) might not like the principles laid down by the Integrity Commission. You can be sure, however, that the public will prefer the Integrity Commission approach to that proclaimed by some politicians as the standard they are prepared to walk past. Years of abuses – as well as of defences that “everybody does it” – have made the public very cynical about anything politicians do to look after old mates.

In addition the Morrison government, like the Berejiklian government in NSW, was shameless about focusing government grants on its own seats, and in marginal seats it hoped to win. The “everyone does it” excuse was used, and that had some truth in it too.

The flaw in that argument is the well-established constitutional principle that ministers, as public officials, must deal with public money with integrity and in the public interest. Favouritism, or treating citizens differently for politically partisan purposes, is illegal.

Professor Anne Twomey, from Sydney University, has made it clear that two of the Morrison defences were nonsense. These were that it is not corrupt because politicians are not lining their own pockets, and because some people in the community (the group being improperly favoured) get a benefit.  Pork barrelling is corrupt and illegal if it involves the partial (i.e., biased) exercise of public power for a purpose other than intended.

The NSW Premier’s department has said public servants should document ministerial interference in grant schemes, but that the practice should not be criminalised. Twomey disagrees, saying that otherwise there was no real sanction. Ministerial codes of conduct were “useless”.

Her opinion is supported by the head of NSW ICAC, Peter Hall, QC. He said that the Berejiklian’s government’s $250m Stronger Communities program was “clearly on the other [illegal] side of the line because its primary purpose was political.

According to The Guardian, Hall said there were often “mixed motives” in cases where there had been a suggestion of pork-barrelling, and that it was “quite permissible” for politicians to make funding decisions which they hoped would have political advantage if it was also in the public interest.

“But if you get a decision, let’s take the Stronger Communities grants fund case, I mean there’s no argument, there is in fact, as the auditor general’s report discovered in that case, a document, which is a briefing note to the premier’s office and that briefing note was to the effect ‘we’ve got the money out the door and it’s hitting the political target’.

“I mean you couldn’t have it any clearer than that as to what the motive was. So that was, you’d almost say the sole motive [or] the sole purpose of that exercise was political or electoral and that’s clearly on the other side of the line.

“I think one has to acknowledge the political reality that it’s not all together quite simple because there’s often more than one motive for a person’s actions.”

ICAC has yet to hand down its report on allegations against the former premier, but it seems clear that her partisan spending will come in for stringent criticism, and that ICAC has not been engaged in a mere boyfriend hunt, as Morrison has alleged. There are striking parallels between the NSW examples of pork-barrelling and the Commonwealth one, and they will not easily be dismissed by claims that Berejiklian has been ambushed by a kangaroo court, as Morrison claims.

Indeed, I understand that the primary reason for the long delay in tabling the report is that the former premier has been given generous scope for commenting on and making further submissions about the draft findings before the report is issued. How lucky for Morrison it was thus not available before the federal election.

Minders need to be firmly and individually accountable to the integrity commission, including for their record keeping

Twomey has other arrows in her quiver. Two decades ago, she wrote an important paper on ministerial staff and minders, and their developing role in government, especially at the Commonwealth level. Remembering that reminds me that it is very important that the integrity legislation permit the commission to lift the veil over the doings of individuals in ministerial officers — making them, as much as their minister, responsible for their actions and recommendations, if corruption and illegality is involved.

It was quite clear from the sports rorts saga, and a number of other improper pork-barrelling schemes, that the prime minister’s office was up to its neck in the partisan decision-making about where money was to be distributed. Any suggestion that they should be exempt from scrutiny because the minister ultimately accepts responsibility for what they do is negated by Morrison’s prevarications, misleading answers and denials.

I cannot help thinking that minders – who have as much of a duty as stewards of public funds and trustees of the public interest as do ministers and public servants – would be rather more attentive to such duties if the occasional one were put to the sword by an ICAC.

That is presumably something that Mark Dreyfus would not be strongly promoting, given Labor’s past failures to rein in the roles of minders, and some seeming indifference to ministerial office record keeping. It is just so handy to have a black deniability hole when outsiders cannot know what has been shown to the minister and what not, who was actually involved, or what they actually knew. Even, sometimes, who was privately briefing favoured journalists on the character of any critics. Such accountability is perhaps the more important when there is not a tame departmental secretary holding inquiries that never report or emerge in public.

Or when the prime minister’s office has become constructed to be more loyal to the minister’s personal and political interests than the law or the public interest if a question is asked at senate estimates (wink wink) or by Freedom of Information.

Republished with permission from the Canberra Times.

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