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Parliamentary Joint Committee on the Australian Commission for Law Enforcement Integrity - 26/09/2014 - Jurisdiction of the Australian Commission for Law Enforcement Integrity
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CHARLES, the Hon. Stephen Endrill, Member, Accountability Round Table

Committee met at 8:31.

CHAIR ( Mr Matheson ): Welcome. This is a public hearing and a Hansard transcript of the proceedings is being made. Before the committee starts taking evidence, I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee. Any such action may be treated by the Senate as contempt. It is also contempt to give false or misleading evidence to the committee.

The committee prefers all evidence to be given in public. Under the Senate's resolutions, witnesses have a right to request to be heard in private session. It is important that witnesses give the committee notice, if they intend to ask to give evidence in camera.

If a witness objects to answering a question, the witness should state the ground upon which the objection is taken and the committee will determine whether it will insist on an answer in regard to the ground on which it is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera in regard to the ground on which it is claimed. If the committee determines to insist on an answer, a witness may request that the answer be given in camera. Such a request may of course also be made at any other time.

Mr Charles : The ART, if I can call it that, is an entirely nonpartisan body which seeks to improve standards of openness, transparency and accountability in government throughout Australia. First, it supports the extension of ACLEI's jurisdiction to include the entire Department of Agriculture, the entire Department of Immigration and Border Protection, the ASIC, the Attorney General's Department and the Australian Taxation Office.

Secondly, as between a jurisdiction based approach and an activities based approach, the ART supports the use of a jurisdiction based approach. Thirdly, in preference to the foregoing, the ART respectfully recommends the establishment of an independent national integrity and anticorruption commission covering all Commonwealth public sector employment and activities, including ministers, members of parliament and the judiciary.

Fourthly, the ART supports the interim measures proposed by Transparency International and they are of course the next witness through Mr Gyles before this committee. ART's approach is consistent, we would expect, with that of the committee because Australia is of course a member since May 2013 of the Open Government Partnership and has signed the UN against Corruption. It is bound by article 36 of that convention, and ART submits that Australia has not yet complied with article 36

The ART argues that corruption is hidden and that only an anticorruption commission has the power and the weapons to uncover corruption. It argues that corruption follows money, power and influence and arises when people pursue them in an improper or criminal way.

In this country the centre of money, power and influence is the Commonwealth and all its arms. A very good example of this and the difficulties of uncovering corruption is the investigation by ICAC, known as Operation Jasper, where coalmining licences were issued by the New South Wales minister for mines in the Bylong Valley area, which it was claimed benefited the Obeid family by up to $100 million. The investigation could not have succeeded without ICAC having the ability to seize documents in computer hard drives, tap telephones and conduct in camera witness hearings over many months.

The ART has submitted for several years to various bodies that the jurisdiction of ACLEI is inadequate, that it should be extended to include at least other law enforcement bodies such as the ATO, ASIC and the Department of Immigration and Border Protection. The present, well-intentioned integrity system relies on the voluntary cooperation of a large network of Commonwealth agencies in which no single body is responsible. But the danger of relying on a multibody approach is that no-one has the ultimate responsibility, and each body involved may assume that all is well because another is making sure that nothing corrupt is occurring, so corruption may fall between the cracks and lie uncovered.

Even with a body such as the Reserve Bank, with its highly qualified and greatly respected board, embarrassing scandals such as Note Printing Australia and security issues have occurred. Only last week a worker in the Australian Bureau of Statistics pleaded guilty in the Melbourne Magistrates' Court to passing information to a friend who had apparently netted something of the order of $7 million in illegal foreign exchange trades with the assistance of the inside information he obtained.

Political donations are a continuing problem. They, together with the lobbyist, are a means by which outsiders may obtain access. We submit, with respect, that there is no obvious reason to believe that the risks involved for Commonwealth politicians are any less than those that have provoked the problems ICAC is uncovering in Sydney. The advantages of good access were well demonstrated by what happened with David Combe in the 1980s. He could commend an annual signing-on fee of $50,000 31 years ago, and the access he offered to his clients was demonstrated by the fact that on one morning he took one of his clients to the offices of five separate cabinet ministers, including the Prime Minister Bob Hawke himself, in one morning. In conclusion, our approach is identical to that of Transparency International, who follow us this morning.

Senator BILYK: Mr Charles, thank you for your submission. I am new to this committee. Firstly, if you could tell me who the Accountability Round Table is, because I do not quite understand that yet, and then I do have a couple of questions for you.

Mr Charles : The Accountability Round Table is a group of about 15 separate people who are all concerned with the basic issue of openness, transparency and accountability in government. The chair is the Hon. Tim Smith QC, who is a retired Supreme Court judge from Victoria. Two members of the committee, the Hon. David Harper AM QC and myself are retired judges of the Court of Appeal. The Hon. Alan Goldberg AO QC is a retired judge of the Federal Court. There are a variety of members of different political parties—for example, Jim Carlton, a former federal member is a present member; Barry Jones on the Labor side is a member; the person who was expected to appear in my place was a former Speaker of the Legislative Assembly in Victoria; and the former Senator Lyn Allison is a member of the Accountability Round Table. We all have the same basic interest and we make submissions.

We have made a number of submissions in relation to the Victorian IBAC. We are making submissions presently to the Sydney ICAC hearings and our submission this morning will show that we have made submissions on a number of occasions in the past in relation to these anticorruption issues.

Senator BILYK: Thanks, Mr Charles. Obviously, you are a very esteemed group of members in your round table.

Mr Charles : Gang.

Senator BILYK: In your gang.

Mr Charles : Or think tank.

Senator BILYK: That is right. You mention that the main recommendation of the submission is to satisfy article 36 in the spirit and intention of UNCAC. Can you tell me how we have not yet complied with that?

Mr Charles : I am sure it would be contended that the setting up of ACLEI amounts to an adequate compliance with article 36. We argue that it is not sufficient. It is not a body which stands alone. The wording of article 36 is set out in one of our submissions, which is attached: each state party shall ensure the existence of a body or bodies or persons specialised in combating corruption through law enforcement. Such bodies should be granted the necessary independence to be able to carry out their functions effectively and without any undue influence.

I have no doubt whatsoever that the persons who work in and run ACLEI are thoroughly well intentioned and very competent people, but our submission in relation to that is that the body depends very much on voluntary cooperation with a large number of other bodies. If the voluntary cooperation breaks down, then there will be gaps and things may fall between the cracks and ACLEI's jurisdiction is very much, we say, limited as is demonstrated by what is happening in this hearing this morning.

Senator BILYK: There is a big difference between desirability and feasibility with regard to these sorts of issues. Do you see any inherent problems if ACLEI did have a broader jurisdiction or area to work in?

Mr Charles : The first problem is that, as I read the submissions of ACLEI and the Integrity Commissioner's last annual report, its funding and its staffing is comparatively slight. I think there is something like 29 members and the report suggests that, for quite a lot of the time, there are only 26 members actually working there. If ACLEI's jurisdiction is increased, plainly, it will require additional people and it will require funding. Even so, we still say that it is not anywhere near the strength and the operational ability to deal with corruption throughout the Commonwealth empire.

Again, it is not so much that we are concerned about things that are happening; generally, we would accept that those who work for the Commonwealth are thoroughly, honest, decent, hardworking people. The problem is, as we see it, the risk of corruption is increasing all the time and, unless you have got a body fully focused on that risk, the problem is going to be there and remain uncovered.

Senator O'SULLIVAN: Thank you, Mr Charles, for your submission. That was an interesting description of the cohort of, obviously, very eminent and qualified Australians who are taking an interest in this issue. My background was in law enforcement in a much earlier life. One of the things from my life experience was that there always seemed to be a sufficient number of agencies who had sufficient powers and sufficient resources to be able to deal with almost any contingency with breaches of the law; there just seemed to be a lack of coordination, cooperation or administration.

Let me put a pointed question to you to start. Do you accept that if anybody in the Commonwealth were to break a law there is currently an organisation that ought to have responsibility to investigate and prosecute that in the event that a crime has occurred?

Mr Charles : Yes, I would. If anyone breaks a law, there are the Australian Federal Police and the Australian Crime Commission to deal with that crime. The Attorney-General's Department no doubt would be there and thoroughly competent to prosecute, yes.

Senator O'SULLIVAN: By extension, when we deal into this difficult world of how political parties are funded, you would accept that there are electoral» commissions not just in each state but at a federal level which have, or ought to have, power to investigate and recommend prosecution?

Mr Charles : Yes.

Senator O'SULLIVAN: So this question of a new body is not a new question. We have had it debated in the Senate on a couple of occasions in the short time that I have been here in seven months. My observation—and I would like you to comment on it—is that another body, alone, given powers and the resources to set about doing the job, would not necessarily advance our circumstances unless there is a much more cohesive umbrella of cooperation amongst all of the agencies that have scope in this field. Would you agree?

Mr Charles : I would agree with that—but, as you say, a much more cohesive arrangement. We see that as being one of the problems with the present. It is too diversified, too multibody. It does not cover all areas and it depends on voluntary cooperation. What we argue is that one body with overarching responsibility—and it could be ACLEI with a sufficiently enlarged remit—could do it. Or, if that were thought not appropriate, then a new body. Again, we recognise that that would be very expensive and a difficult process to bring it about. But it depends upon the view one takes about the necessity of taking adequate and appropriate steps to fight corruption.

Senator O'SULLIVAN: One of my earlier experiences was a fascination with the fact that the United States has some 27,000 different law enforcement agencies, when you get down to county level, and so on. Leaving ACLEI aside for a moment, why wouldn't we, for example, strengthen the Australian Federal Police by creating a division within the Australian Federal Police to specialise in such things?

Mr Charles : I do not want to suggest for a moment that anyone in the police at the moment is corrupt. The risk is there at any time that someone may be. When Sydney was setting up the ICAC, it was decided to set up an entirely different body to deal with corruption in the police. The view that is generally taken about that is that the police are very clever and, when there are corrupt police, you have to deal with them on an entirely separate basis. That is not the view that has been taken in Victoria, where the IBAC has been given the jurisdiction to deal both with the police as well as with corruption generally. But, at the moment, our view is that IBAC is not functioning adequately at all.

The problem with the police is that ordinarily they deal with fairly simple and straightforward «matters» —rape, murder, horrible crimes of that kind—where you can see at once what the crime is, and where you can see very quickly who the necessary witnesses are likely to be. Corruption is a much harder evil to fight. It is hidden. Take Operation Jasper in New South Wales by way of example. It required a great deal of investigation to sift through layers of discretionary trusts and false names that were being used to discover that the land in the Bylong Valley, which was going to benefit from the grant of these mining licences, all belonged to one family. At the outset, people simply had no reason to suspect corruption—other than that it was simply surprising that the Bylong Valley was being open to corruption because no-one had been suggesting it.

Senator O'SULLIVAN: Accepting that observation, as I do, you would accept though that these tasks are undertaken by people with particular skills.

Mr Charles : Yes.

Senator O'SULLIVAN: The question of where they may deliver those services, whether it be in the AFP or a specialist organisation, you would accept has to do with the remit they were given and the culture that has developed, to use one of your own terms, and the administration that has been put in place. Where I am leading, Mr Charles—I am in agreement with your observations; I just always believe that one should exhaust what one has in front of oneself before we go off to build a new house. Building a new house occupied by the same white ants will have the same results of the end of the day. It is that line that I want to take.

As an extension of that, I would again be interested in an observation from you. In my home state of Queensland we have the CMC, the Crime and Misconduct Commission. I have watched it for over a decade or more deteriorate into being an agency where, for example—I think these are the stats but do not hold me to them—of 14,000-odd complaints made to them, there were 42 successful prosecutions. They were home central for one political persuasion to make complaints about another political persuasion. So the more political the body, the more intense their charter to look at politicians, the more likely you are going to have of these frivolous complaints—if you watch them, they actually escalate come election time; they correspond with the election cycles—and I have seen that bring that organisation almost to its knees in terms of its effectiveness. I will be interested in your comments on that.

Mr Charles : I would contrast ICAC, highly political though its results have been, as an extremely effective body in exposing things that are going wrong in relation to that state. If one wants to pursue that, Mr David Ipp, the past commissioner, has put a very forceful submission, which I would urge members of this committee to read, to the New South Wales ICAC hearings on whether there need to be amendments to the legislation.

In so far as Queensland is concerned, I accept that there is a problem of trivial complaints. I have examined the problems with the CMC, and I made submissions recently to the CMC committee hearing in Brisbane. Firstly, the body needs to have a power to dismiss out of hand trivial and vexatious complaints. Secondly, those who make complaints should have no entitlement to make public the fact of making a complaint so that the risk to a politician's or anyone else's reputation is prevented until the body comes to a conclusion on something, at which point you can make public the fact that corruption of one kind or another has been found, or that there has been none found. But before that, there should be an absolute proscription on making public the making of a complaint. That would reduce some of the damage to politicians' reputations, which I entirely sympathise with.

I have carefully examined the number of complaints made to the CMC in Brisbane, and the conclusion to which I came and the submission we made to the Brisbane committee was that, although the number sounds high, in fact it is no higher than the number of complaints being made to Sydney's ICAC or to Western Australia's CCC and in fact is declining.

Senator O'SULLIVAN: That is interesting. I was not aware of that fact. You may have just in your answer there made my case for me a little bit. We have ICAC, which I detect you regard as having been a successful foray—

Mr Charles : Entirely, yes.

Senator O'SULLIVAN: and the CMC, in which there is perhaps room for improvement and adjustments to be made there. I do not want to lose this point, because it is one that I will carry through this inquiry. Do you believe a division within the Australian Federal Police that specialises particularly in Commonwealth corruption, for want of a better term, is not even worthy of further consideration?

Mr Charles : I would not support that proposal. I think the police generally have a different function. Generally they are not trained. Anticorruption investigators need to be highly trained and very competent investigators. They need to be trained to deal with very difficult fraud and hidden «matters» of that kind. When one sets up a body of this kind, certainly one will take some investigators from the best that the police have, but generally one has to search outside that for the investigators you need to use.

Senator O'SULLIVAN: Point taken. Thank you for your evidence.

CHAIR: I am going to go in a different direction from Senator O'Sullivan. We know that ACLEA was set up to investigate, resolve and identify corruption issues from Commonwealth law enforcement agencies and focused on the law enforcement aspect of it. I understand where you are coming from when you say you want to set up a single national anticorruption and malpractice body, but what are your thoughts on the current jurisdiction of ACLEA in the agriculture department? It only goes over part of that department, so the front end has law enforcement officers investigate corruption but the back office does not. Would you like to elaborate on that?

Mr Charles : We see that there are deficiencies involved and that part of what will happen if the whole of the agriculture department comes under ACLEA's jurisdiction will depend on referral and voluntary cooperation from those at the head of the agriculture department. It is the same problem of diversification. It is not a single body which has the opportunity to investigate these things in depth. It leaves open the possibility—I am not saying there is, but there might be—of people at the head of the department who want not to investigate a particular area for reasons not necessarily of corruption. It is the problem of cooperation between a large number of different bodies which we think is dangerous and does not properly defend against the risk of corruption.

CHAIR: Your submission talks about one single identity. That is outside the terms of our reference. I know that you supported the expansion of ACLEA's powers. Do you think we should do that in a stepped manner instead of establishing the single identity? What are your thoughts on staging that, particularly in relation to resources and funding?

Mr Charles : If you are going to leave it or if that is the committee's recommendation then it is better that it be done at once so that a wholesale approach can be taken. ACLEA can make its own submissions as to what it thinks it will need in the way of additional staffing, funding and «matters of that kind if this step is taken. Doing it piecemeal runs the risk of further fragmentation, we would say. The best planning would be to make an overall decision. That is one of the lesser steps that we would advocate consistently with transparency's submissions.

CHAIR: Thank you.

Mr ZAPPIA: Could I get something clear in my mind about your submission? You are suggesting that ACLEA should have an extended area of jurisdiction. If that were so and it were agreed to, is it your submission that we would still then need what I would refer to as a Commonwealth ICAC or something similar or would ACLEA also perform the role similar to what the state ICACs are currently doing?

Mr Charles : I am sorry if we have not made that clear. Our submission is that the best solution is to have a national anticorruption commission. That is No. 1, front and centre. If the committee decides that, for whatever reason, that is not appropriate then we would submit that ACLEA should have as much increased jurisdiction as possible. But certainly the two should not operate side by side.

Mr ZAPPIA: Thank you.

CHAIR: Thank you for your submission and attending this morning. It is very much appreciated.