October 27, 2021

State politics

A short history of anti-corruption commissions

By Russell Marks
Composite image of former NSW Labor minister Eddie Obeid, and former NSW premiers Gladys Berejiklian and Barry O’Farrell

From left: Former NSW Labor minister Eddie Obeid (image via ABC News), and former NSW premiers Gladys Berejiklian (source) and Barry O’Farrell (source)

Why are state and territory corruption watchdogs increasingly under attack?

In April 2014, New South Wales’s Independent Commission Against Corruption had Labor’s Eddie Obeid in its sights. Obeid had planned to have a family entity buy shares in Australian Water Holdings because he had insider knowledge, due to his position as a parliamentarian, that its stocks were about to rise. ICAC later described this as “serious corrupt conduct”, and Obeid famously went to jail in late 2016 on misconduct charges over some other business interests he had at Circular Quay.

Eddie Obeid is the kind of classic corrupt politician for which ICAC was created in 1988. In 2013, Obeid listed his family home, Passy, for sale for $10 million, and that same year he applied for government funding to pay for his legal representation at ICAC. But while it was investigating Obeid and AWH, ICAC’s counsel assisting, Geoffrey Watson, asked then premier Barry O’Farrell about a $3000 bottle of Grange Hermitage he’d received from AWH’s chief executive three years earlier. Why hadn’t he declared it? O’Farrell said he couldn’t even remember it. Then O’Farrell’s handwritten thankyou note turned up, and he decided to resign. ICAC subsequently accepted that O’Farrell had never actually provided any special favours in return for the Grange, and it cleared him of any corrupt conduct. But it was too late to save O’Farrell’s political career. (He did okay though. Following a series of high-level appointments, he’s now Australia’s High Commissioner to India, which led to his ill-advised meeting with the leader of extreme-right paramilitary group RSS last year.)

When Gladys Berejiklian resigned her own premiership nearly four weeks ago, after ICAC announced it was investigating her involvement in grants awarded in her ex-boyfriend’s electorate, The Australian’s Gerard Henderson, for one, was fuming. “ICAC’s perceptions of corruption have led to the resignation of three of the best premiers NSW has ever had,” he wrote. The first, in 1992, was Nick Greiner, whom ICAC found had conducted himself “contrary to known and recognised standards of honesty and integrity” after he’d organised for an independent MLA to be parachuted into a senior public service role as a way of regaining his seat at a byelection to strengthen his minority government. He then denied it all to ICAC. ICAC’s commissioner, Ian Temby, also concluded that Greiner’s actions met the legislated definition of corruption, and recommended his dismissal. In the end, the other independents who held the balance of power issued an ultimatum: resign or lose government on the floor of the House.

All three resignations – Greiner, O’Farrell, Berejiklian – were political decisions. It’s easy to dismiss Henderson’s criticism: he was John Howard’s chief of staff during the mid 1980s, and can generally be relied upon to find ways to excuse Coalition politicians while damning Labor politicians for the same conduct. But does he have a point? Each decision to resign was made after ICAC had smeared their reputations. Greiner successfully appealed Temby’s finding that he’d acted corruptly, but, as with O’Farrell, it was also too late to save his premiership. (And, like O’Farrell, Greiner has also done okay in his subsequent career: he spent a decade on the boards of Big Tobacco companies, and is now Australia’s Consul-General in New York.) What if Berejiklian is later cleared as well?

Politicians have often sought to turn the fact of their being elected into a weapon of virtue, which they then wield against the (unelected) checks and balances on their power. Judges are a favourite target, as are, from time to time, public servants, people in independent statutory positions and even those in the Senate, whom Paul Keating famously described as “unrepresentative swill” because they’re elected on a basis other than “one vote, one value”. Politicians regularly claim that the only accountability mechanism they should be subject to is a general election: they are accountable to “the people” and nothing else.

This is unsurprising: power is inherently frustrated by checks and balances. And it’s not as if the corruption commissions are beyond reproach. South Australia’s ICAC had spent 18 months investigating two Renewal SA executives, but charges against them failed in the Adelaide Magistrates Court after prosecutors conceded they had no evidence that would convict them. And the wife of a police officer who took his own life during an ICAC investigation (but before its report cleared him of corruption) has been a public critic of the way South Australia’s corruption watchdog operates. The Northern Territory’s ICAC is currently under investigation (by the ICAC Inspector) following revelations it outsourced several investigations to a consultancy business owned by the domestic partner of ICAC’s investigations director, Kate Kelly. Ken Fleming, the NT’s ICAC commissioner, told a parliamentary Estimates hearing in June he’d managed the obvious conflict of interest, but he then retired the following month, two years early.

NSW’s ICAC has also been rebuked. In Greiner’s case, the NSW Court of Appeal found that ICAC had misinterpreted the definition of “corrupt conduct” in its own legislation. And 23 years later, the High Court – on a 4–1 majority – found it had done so again, when it investigated prosecutor Margaret Cunneen for trying to pervert the course of justice when she allegedly advised her son’s girlfriend to fake chest pains to avoid a breath test after a car accident. Cunneen denied the allegation, but the High Court majority said even if it was found to be true, it could not have amounted to “corrupt” behaviour. Cunneen was incensed at being publicly dragged through the mud. She’s now president of the Rule of Law Education Centre, which claims that ICAC “has become a parallel system of justice” that, in holding public hearings and making public findings, imposes “one of the most severe penalties that could ever be inflicted upon a person: a public taint of corruption”.

That claim is disingenuous, however. Royal commissions do essentially the same thing: conduct public investigations into major matters of public importance. Public officials regularly find the experience of being investigated extremely uncomfortable. But it’s difficult to know what the alternative is. Credible allegations of corruption must be independently investigated. That’s what Tony Fitzgerald’s royal commission into police corruption in Queensland did, and it’s also what the WA Inc royal commission into Brian Burke’s government did. Neither was possible while the responsible premier reigned. (The Fitzgerald commission was ordered by Joh Bjelke-Petersen’s deputy, Bill Gunn, while his premier was temporarily out of the state.) What is unique about the standing corruption commissions is that they can investigate allegations of corrupt behaviour without waiting for a premier’s political downfall.

Labor has had its share of corruption scandals, but the main opposition to ICAC-style bodies comes squarely from the political right. The Australian’s Chris Merritt sits on the board of the Rule of Law Education Centre, as do lawyers Robin Speed and Malcolm Stewart, who in 2015 made an influential submission to a Senate inquiry, arguing against increased transparency for large companies. The centre’s governing committee includes former mining executive Hugh Morgan and the Institute of Public Affairs’ John Roskam. Bruce Baird (a former Liberal Party MP), Peter van Onselen (a conservative commentator) and James Morrow (The Daily Telegraph’s federal political editor) have all called ICAC a “star chamber”. The analogy is puzzling. The Court of the Star Chamber’s terrible reputation dates from the reigns of King James I and his son Charles I, who both used it to suppress dissent and prosecute political opponents. But ICAC doesn’t prosecute, and it doesn’t punish. Its power is limited to summoning witnesses and recommending prosecutions.

Between 2002 (Queensland) and 2019 (the ACT), each state and territory parliament created its own version of NSW’s ICAC, usually after an Opposition had promised to do so – perhaps in response to a government scandal – and was then elected. (We’re still waiting for a federal anti-corruption body, promised by Scott Morrison almost three years ago.) Indeed, that’s how NSW’s ICAC got off the ground, after Greiner ran on an anti-corruption platform against the corruption-plagued Labor government of Neville Wran and Barrie Unsworth. But corruption commissions are dependent on the ongoing support of parliament (for enabling legislation) and the sitting government (for adequate funding). After her appearance at ICAC in October last year, Berejiklian notoriously refused ICAC’s urgent request for additional funding to keep pace with inflation: in effect, she reduced its funding while she must have known it was investigating her, or was about to.

Are we entering a second phase, with parliamentarians and others increasingly in agreement that the corruption commissions have had too much unchecked power? Last month South Australia’s parliament made amendments to its own ICAC legislation, which its current commissioner, Ann Vanstone, says has “decimated” her role. But the amendments were introduced by SA Best and supported by The Greens, as well as both major parties. The SA politicians say they’re simply giving effect to a parliamentary committee’s recommendations following criticism of the way it operated under its inaugural commissioner, Bruce Lander. Ken Fleming’s replacement as the NT’s commissioner, former cop Michael Riches, says he’ll only be investigating allegations of high-level corruption.

No doubt it’s uncomfortable to be investigated. It may even be excruciating, as Gladys Berejiklian discovered last October and is rediscovering this month. But anyone who takes on a public role – which is always voluntary – should constantly be asking themselves, How would this look at an ICAC hearing? Accepting a $3000 bottle of wine from a lobbyist without declaring it; shifting a troublesome independent out of parliament and into a public service role; conducting a secret relationship with a dodgy MP who was trying to use his position to make himself rich? Without an ICAC, we’d have relied on journalists and parliamentary oppositions to uncover these activities, and they have very few powers to investigate. When the right criticises the corruption commissions for holding those in actual power accountable, what it’s really saying is that people in powerful public positions should be left alone.

Russell Marks

Russell Marks is a lawyer and an adjunct research fellow at La Trobe University. He is the author of Crime and Punishment: Offenders and Victims in a Broken Justice System (Black Inc., 2015). 

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