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Australian Commission for Law Enforcement Integrity—Parliamentary Joint Committee—Examination of the annual report of the Integrity Commissioner 2017-18—Report, February 2020


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The Senate

Parliamentary Joint Committee on the Australian Commission for Law Enforcement Integrity

Examination of the Annual Report of the Integrity Commissioner 2017-18

© Commonwealth of Australia 2020

ISBN 978-1-76093-055-4

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License.

The details of this licence are available on the Creative Commons website: http://creativecommons.org/licenses/by-nc-nd/3.0/au/.

Printed by the Senate Printing Unit, Parliament House, Canberra.

iii

Members

LP, QLD

ALP, TAS

LP, SA

ALP, NSW NATS, NSW ALP, NSW LP, QLD

LP, SA ALP, SA

LP, QLD

Chair Senator Paul Scarr (Member from 11 February, Chair from 13 February 2020)

Deputy Chair Senator Catryna Bilyk

Members Senator Alex Antic Senator Tim Ayres Mr Pat Conaghan MP Hon Justine Elliot MP Mr Andrew Laming MP Mr Tony Pasin MP Mr Tony Zappia MP

Former Members Senator Amanda Stoker (Chair until 11 February 2020)

Secretariat Dr Sean Turner, Committee Secretary Ms Kate Gauthier, Principal Research Officer Ms Stephanie Gill, Administrative Officer

PO Box 6100 Telephone: (02) 6277 3419

Parliament House Email: aclei@aph.gov.au

CANBERRA ACT 2600 Internet www.aph.gov.au/aclei_ctte

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Contents

Members ............................................................................................................................................. iii

Abbreviations ................................................................................................................................... vii

Chapter 1—Introduction .................................................................................................................... 1

Requirements for annual reports ....................................................................................................... 1

Requirements for the examination of annual reports ..................................................................... 2

Requirements for special reports ....................................................................................................... 2

Corrections to the Annual Report ...................................................................................................... 3

New Commissioner ............................................................................................................................. 3

Conduct of the inquiry ........................................................................................................................ 3

Acknowledgement ............................................................................................................................... 3

Chapter 2—Key issues........................................................................................................................ 5

ACLEI's increasing workload ............................................................................................................. 5

Jurisdiction expansion .............................................................................................................. 5

Consolidation of legacy workload.......................................................................................... 7

Staffing ....................................................................................................................................... 9

Performance framework ................................................................................................................... 10

Strategic priorities and activities ...................................................................................................... 11

Annual performance statement ....................................................................................................... 13

Performance criterion one: The corruption notification and referral system is effective13

ACT Integrity Commission............................................................................................................... 19

Performance criterion two-investigations conducted professionally and efficiently ... 19

Performance criterion three-ACLEI monitors corruption investigations conducted by law enforcement agencies .......................................................................................... 25

Performance criterion four-ACLEI insights contribute to accountability and anti-corruption policy development ................................................................................. 27

Performance criterion five-ACLEI’s governance and risk management controls are effective and take account of its operational role .................................................... 30

Data errors identified in Annual Report 2017-18............................................................... 31

Ombudsman inspections .................................................................................................................. 33

Ombudsman briefing about controlled operations ........................................................... 33

Ombudsman report on the Surveillance Devices Act 2004 .............................................. 33

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Appendix 1—Additional Information .......................................................................................... 37

Appendix 2—Public Hearings and Witnesses ............................................................................. 39

List of Tables

Table 2.1—ACLEI 2017-18 activities to achieve strategic priorities ........................................... 11

Table 2.2—Notifications from LEIC Act agencies, 2013-14 to 2017-18 ...................................... 15

Table 2.3—Corruption issues notified in 2017-18 under section 19-by corruption class, as assessed upon receipt ............................................................................................................. 16

Table 2.4—Referrals from other sources ......................................................................................... 17

Table 2.5—Assessment statistics, 2012-13 to 2017-18................................................................... 18

Table 2.6—Corruption issues investigated by ACLEI, 2013-14 to 2017-18 ............................... 21

Table 2.7—ACLEI investigations carried forward to 2017-18, by year of notification or referral ...................................................................................................................................... 21

Table 2.8—ANAO recommendations and ACLEI responses ...................................................... 23

Table 2.9—Corruption issues investigated by LEIC Act agencies, 2013-14 to 2017-18 ........... 26

Table 2.10—Corruption issues referred by the Integrity Commissioner to a government agency for investigation in 2017-18 under section 26(1)(b) or section 26(1)(c)—by corruption class as assessed upon receipt ........................................................................... 27

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Abbreviations

ACIC Australian Criminal Intelligence Commission

ACLEI Australian Commission for Law Enforcement Integrity

ACT Australian Capital Territory

AFP Australian Federal Police

ANAO Australian National Audit Office

Annual Report Annual Report of the Integrity Commissioner 2015-16 2015-16

Annual Report Annual Report of the Integrity Commissioner 2016-17 2016-17

Annual Report Annual Report of the Integrity Commissioner 2017-18 2017-18

ASL average staffing level

AUSTRAC Australian Transaction Reports and Analysis Centre

committee Parliamentary Joint Committee on the Australian Commission for Law Enforcement Integrity

DAWR Department of Agriculture and Water Resources

DIBP Department of Immigration and Border Protection

Home Affairs Department of Home Affairs

KPI key performance indicator

LEIC Act Law Enforcement Integrity Commissioner Act 2006

PBS Portfolio Budget Statements

Surveillance Act Surveillance Devices Act 2004

Surveillance Report Report to the Minister for Home Affairs on agencies’ compliance with the Surveillance Devices Act 2004: For the period 1 January to 30 June 2018

VIT Visa Integrity Taskforce

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Chapter 1 Introduction

1.1 The Australian Commission for Law Enforcement Integrity (ACLEI) was established by the Law Enforcement Integrity Commissioner Act 2006 (LEIC Act) and commenced operation on 30 December 2006. The LEIC Act established the Office of the Integrity Commissioner, supported by a statutory authority, ACLEI.

1.2 The objectives of the LEIC Act, as set out in section 3, are to:

 facilitate the detection of corrupt conduct in law enforcement agencies;  facilitate the investigation of corruption issues that relate to law enforcement agencies;  enable criminal offences to be prosecuted, and civil penalty proceedings to

be brought, following those investigations;  prevent corrupt conduct in law enforcement agencies; and  maintain and improve the integrity of staff members of law enforcement

agencies.1

1.3 The Annual Report of the Integrity Commissioner 2017-18 (Annual Report 2017- 18) was presented to the Attorney-General, the Hon. Christian Porter MP, on 2 October 2018. It was tabled in the Senate on 12 November 2018 and in the House of Representatives on 22 October 2018.2

Requirements for annual reports 1.4 Section 201 of the LEIC Act requires ACLEI's annual reports to provide details of a range of matters, including:

 corruption issues that have come to the Integrity Commissioner via: notifications from heads of law enforcement agencies; referrals from the minister; and referrals from other people;3

 corruption issues that the Integrity Commissioner has: dealt with on his or her own initiative; investigated; or referred to a government agency for investigation;

 corruption issues investigated over the year and certificates issued under section 149 during the year;4

1 Law Enforcement Integrity Commissioner Act 2006 (LEIC Act), s. 3.

2 House of Representatives Votes and Proceedings, No. 145, 22 October 2018, p. 1911; Journals of the

Senate, 12 November 2018, No. 126, p. 4022.

3 See LEIC Act, s. 18, s. 19 and s. 23.

4 Certificates issued under section 149 relate to the Attorney-General's ability under the LEIC Act to

certify that disclosure of information or document contents would be contrary to the public

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 investigations conducted that 'raise significant issues or developments in law enforcement' and the extent to which ACLEI investigations have resulted in prosecutions or confiscation proceedings;

 trends and patterns including the nature and scope of corruption in law enforcement and other Commonwealth agencies that have law enforcement functions; and

 recommendations for changes to Commonwealth laws or administrative practices of Commonwealth government agencies.

1.5 The Annual Report 2017-18 includes an index that provides a guide to the report's compliance with the requirements set out under section 201 of the LEIC Act and associated regulations, as well as the requirements set out under section 46 of the Public Governance, Performance and Accountability Act 2013 (including the Public Governance, Performance and Accountability Rule 2014).

1.6 The committee is satisfied that ACLEI has fulfilled its annual reporting obligations under the LEIC Act and other requirements as set out in the compliance index of the Annual Report 2017-18.5

Requirements for the examination of annual reports 1.7 Paragraph 215(1)(c) of the LEIC Act requires the committee to examine:

 each annual report prepared by the Integrity Commissioner;  any special report prepared by the Integrity Commissioner; and  report to the Parliament on any matter appearing in, or arising out of, any such annual report or special report.

Requirements for special reports 1.8 Under section 204 of the LEIC Act, the Integrity Commissioner may prepare special reports that relate to the operations of the Integrity Commissioner or any matter in connection with the performance of the Integrity Commissioner's

powers or functions under the LEIC Act.

1.9 In its report on ACLEI's Annual Report 2010-11, the committee suggested that future ACLEI annual reports 'clearly state whether any special reports have been provided to the Minister and make an appropriate reference in the compliance index'.6 ACLEI has adopted this suggestion.

interest on one or more grounds. These include, but are not limited to: prejudicing the security, defence or international relations of the Commonwealth; or the disclosure of ministerial communications or relations between the Commonwealth and states and territories.

5 Australian Commission for Law Enforcement Integrity (ACLEI), Annual Report of the Integrity

Commissioner 2017-18 (Annual Report 2017-18), pp. 99-103.

6 Parliamentary Joint Committee on ACLEI, Examination of the Annual Report of the Integrity

Commissioner 2010-11, p. 2.

3

1.10 The Annual Report 2017-18 states that the Integrity Commissioner prepared no special reports during the relevant year.7

Corrections to the Annual Report 1.11 On 28 October 2019, Mr Craig Furry, Executive Director Secretariat, ACLEI, advised of amendments to the data contained in the Annual Report 2017-18 which were identified in the course of the preparation of the Annual Report

2018-19 and reflect current case management system information. Mr Furry explained that '[i]ndividual records in the case management system can be amended over time to rectify identified data entry errors introduced when the records were originally created'.8 Details on those amendments are captured in chapter two.

New Commissioner 1.12 As of 10 February 2020, Ms Jaala Hinchcliffe is the Integrity Commissioner and head of the Australian Commission for Law Enforcement Integrity.9 References in this report to the Integrity Commissioner reflect that Mr Michael Griffin AM

was the Integrity Commissioner at time of report drafting and public hearings for this inquiry.

Conduct of the inquiry 1.13 The committee held a public hearing to examine the Annual Report 2017-18 on 20 September 2019. During the hearing, the committee heard evidence from the Integrity Commissioner, Mr Michael Griffin AM and other ACLEI officers.

A list of witnesses is provided in Appendix 1.

Acknowledgement 1.14 The committee acknowledges ACLEI's ongoing co-operation and engagement with the committee.

7 Annual Report 2017-18, p. 103.

8 Mr Craig Furry, Executive Director, Secretariat, ACLEI, correspondence received 28 October 2019.

9 ACLEI, About: Integrity Commissioner, www.aclei.gov.au/about/integrity-commissioner (accessed

21 February 2020).

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Chapter 2 Key issues

2.1 This chapter considers key issues highlighted during the Parliamentary Joint Committee on the Australian Commission for Law Enforcement Integrity (committee) examination of the Annual Report of the Integrity Commissioner 2017-18 (Annual Report 2017-18).

2.2 This chapter first considers broad issues raised during the committee's examination related to the expanded jurisdiction of the Australian Commission for Law Enforcement Integrity (ACLEI) and subsequent recruitment process to meet the increased workload. The chapter then considers matters related to the performance criteria listed in the Annual Report 2017-18, and finally provides information on relevant Commonwealth Ombudsman reports.

ACLEI's increasing workload 2.3 ACLEI highlighted three overarching issues faced in 2017-18: the increased workload due to the expanded jurisdiction in line with a broader definition of 'law enforcement' agencies; the recruitment challenges of operating in a more

complex environment; and the recent consolidation process that ACLEI has undertaken to triage ongoing and new investigations. These issues are outlined below.

Jurisdiction expansion 2.4 In 2017-18, ACLEI had jurisdiction over the following law enforcement agencies:

 the Australian Criminal Intelligence Commission (ACIC);1  the Australian Federal Police (AFP);2  the Australian Transaction Reports and Analysis Centre (AUSTRAC);  prescribed aspects of the Department of Agriculture and Water Resources

(DAWR); and  the Department of Home Affairs (Home Affairs).3

2.5 During this reporting period, as with the past reporting period of 2016-17, ACLEI reiterated the impact to its workload caused by the inclusion of the Department of Immigration and Border Protection (DIBP, since subsumed into

1 This includes the former Australian Crime Commission, the former CrimTrac Agency and former

National Crime Authority.

2 This includes Australian Capital Territory Police.

3 This includes the Australian Border Force.

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Home Affairs) in its jurisdiction. The Integrity Commissioner, Mr Michael Griffin AM,4 told the committee the changes moved ACLEI from a 'jurisdiction of approximately 16,000 law enforcement officials to approximately 23,000 plus', and brought 'a very significant increase in our workload which is reflected in the statistics of the report'.5

2.6 The Integrity Commissioner went on to tell the committee:

The title, of course, is the Australian Commission for Law Enforcement Integrity, but 'law enforcement' is an elastic term that changes as the years go by. It has transitioned from being just the Federal Police and the Crime Commission, which, if you like, are at the pointier end of law enforcement, to now going right across to agriculture, the Department of Home Affairs and Immigration folks, so we've got a very broad remit at the moment.6

2.7 The workload of ACLEI has been steadily increasing. During 2014-15, 75 corruption issues were under investigation either jointly or by ACLEI alone,7 and after DIBP was brought under ACLEI's jurisdiction this jumped to 242 corruption issues under active investigation in 2016-17.8 The Annual Report 2017-18 showed another increase in workload, albeit not as high, with 282 issues under investigation either alone or jointly with relevant agencies identified by the Law Enforcement Integrity Commissioner Act 2006 (LEIC Act).9

Visa Integrity Taskforce 2.8 A key factor in the increasing workload was the establishment of the Visa Integrity Taskforce (VIT), created after DIBP came under ACLEI jurisdiction. This project was funded in 2016-17 via the Confiscated Assets Account under

the Proceeds of Crime Act 2002, which allocated $1.936m to operate the taskforce.10 The Annual Report 2017-18 outlines the taskforce and its progress:

This ACLEI-led taskforce comprises members from ACLEI, the AFP and the Department of Home Affairs, and is drawing on cooperation from the Department of Foreign Affairs and Trade and overseas law enforcement partners. It will assure the integrity of Australia's visa system by investigating allegations and intelligence about visa fraud involving law enforcement officers.

4 As outlined in chapter one, Mr Michael Griffin, AM, was the Integrity Commissioner at time of

inquiry hearings and report drafting. References to the Integrity Commissioner in this report refer to Mr Griffin.

5 Mr Michael Griffin, AM, Integrity Commissioner, Australian Commission for Law Enforcement

Integrity (ACLEI), Committee Hansard, 20 September 2019, p. 2.

6 Mr Michael Griffin, Committee Hansard, 20 September 2019, p. 4.

7 ACLEI, Annual Report of the Integrity Commissioner 2017-18 (Annual Report 2017-18), p. 2.

8 Annual Report 2017-18, p. 23.

9 Annual Report 2017-18, p. 2.

10 Annual Report 2017-18, p. 31.

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This taskforce was established in part as a result of the risks exposed by a joint ACLEI/Home Affairs investigation into alleged visa fraud. During the reporting period ACLEI finalised recruitment of personnel and temporary accommodation for the taskforce. All matters related to visa integrity were assessed and prioritised, with intelligence collection and analysis undertaken. It is expected that a number of matters will be finalised during 2018-19.11

2.9 The Integrity Commissioner told the committee there were some delays to VIT investigations due to delays in recruiting 'the specialised investigators and intelligence analysts that we use'; however, he advised that recruitment was ultimately successful and the Minister agreed to the rollover of funds for the project to continue.12 The Acting Executive Director of Operations, Mr Dallas Rogers, told the committee that during the reporting period:

…a lot of the work focused on triaging the intelligence and working up the intelligence to then, in the following reporting period, undertake those investigations. Those investigations, as you can imagine because of the international nature of them, were quite complex and they required a lot of lead-up time and a lot of collaboration with partners to ensure that those investigations progressed.13

2.10 The Annual Report 2017-18 provides some context of the work involved in the VIT, noting that investigating alleged visa fraud involving law enforcement officers raises a number of complexities, with significant legal, diplomatic and administrative challenges relating to operating internationally.14

Consolidation of legacy workload 2.11 The Integrity Commissioner told the committee that during the reporting period, ACLEI embarked on a consolidation phase in relation to the legacy material that arose from the expansion of its jurisdiction. This involved a

triaging process to determine what matters related to 'serious and systemic corruption', thereby enabling ACLEI to focus on 'the really sophisticated organised crime attacks that we identify on the border—that is, the passage of narcotics, weapons, people and money illicitly through the border, facilitated by corrupt law enforcement officials'.15

2.12 The Acting Executive Director of Operations, Mr Dallas Rogers, expanded on how this consolidation process worked, telling the committee that it involved doing a stocktake of existing investigations, while improving the triaging of

11 Annual Report 2017-18, p. 27.

12 Mr Michael Griffin, Committee Hansard, 20 September 2019, pp. 2-3.

13 Mr Dallas Rogers, Acting Executive Director, Operations, ACLEI, Committee Hansard,

20 September 2019, pp. 3-4.

14 Annual Report 2017-18, p. 24.

15 Mr Michael Griffin, Committee Hansard, 20 September 2019, p. 2.

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new investigations and notifications. Mr Rogers outlined that ACLEI made a deliberate choice to limit the new investigations to the most serious issues, which gave ACLEI capacity to review all matters on hand and 'focus on concluding and finalising a number of those investigations'.16

2.13 Statistics of this consolidation process were provided to the committee, showing that in the reporting period there was the lowest number of investigations commenced since 2014-15, with the highest number (51) of investigations being concluded. The Acting Executive Director of Operations told the committee this meant 'we're in a much better position in the operations branch now in terms of dealing with investigations on hand'.17

2.14 It was further explained that one of the ways that ACLEI has been able to become more selective in the notifications triage process is by using a tool that ACLEI developed and implemented during the 2017-18 reporting period, the Threat Risk Assessment Methodology, which assigns a score to aspects of risk in each notification. This then allows ACLEI to assign an overall priority to the investigation of 'high', 'medium' or 'low' priority.18

2.15 The committee was also informed that development began on another tool, the ORAM or Operational Risk Assessment Model, but as the development and implementation was not concluded in the reporting period this would be outlined in the next ACLEI annual report.19

2.16 As well as the expansion of jurisdiction to all of DIBP, another four factors were identified as contributing to ACLEI's increased workload:

 Part of the increase in operational tempo reflects the increasing maturity of the integrity systems in a number of agencies in jurisdiction, making it easier for the agencies to detect possible corrupt behaviour, or more deeply entrenched corruption.

 Good relationships between ACLEI and partner agencies at the Commonwealth and State level, leading to a greater exchange of useful intelligence about suspect behaviour involving law enforcement officers within ACLEI's jurisdiction.

 ACLEI's intelligence capability has developed substantially, leading to an increased generation of intelligence about possible corrupt conduct by law enforcement officers.

16 Mr Dallas Rogers, Committee Hansard, 20 September 2019, p. 3.

17 Mr Dallas Rogers, Committee Hansard, 20 September 2019, p. 3.

18 Mr Dallas Rogers, Committee Hansard, 20 September 2019, p. 3.

19 Mr Dallas Rogers, Committee Hansard, 20 September 2019, p. 3.

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 Deeper levels of corruption are being found, with sophisticated criminal groups sometimes targeting a number of staff in different law enforcement agencies.20

Staffing 2.17 The challenges experienced in recruiting for the VIT, outlined above, were felt throughout ACLEI in the reporting period. The Annual Report 2017-18 notes that ACLEI focuses on recruitment that supports the establishment of small

teams with a balance of skills. The increasing complexity of investigations has required the recruitment of staff with complementary specialist skills and considerable law enforcement experience. The Annual Report 2017-18 notes that this approach can lead to recruitment delays, and further notes that the establishment of permanent premises in Sydney is expected to have a positive impact on staff retention.21

2.18 Previous annual reports indicated that the expansion of ACLEI's jurisdiction to include the DIBP (now part of Home Affairs) from 1 July 2015 resulted in a need for ACLEI to increase its staff numbers.22 ACLEI received additional funding of $3.1 million to increase resources to meet this anticipated increased workload, with part of this funding earmarked to enable ACLEI to raise its average staffing level (ASL) to 52.23

2.19 Past annual reports have stated that ACLEI faced challenges recruiting suitably qualified and experienced staff, which had hindered ACLEI's ability to achieve its maximum ASL of 52.24 However this has now been addressed. ACLEI reported that its ASL was 38.7 in 2015-16,25 increasing to an annualised average of 46.8 in 2016-17,26 and as of 2017-18 ACLEI is fully staffed. The Integrity Commissioner told the committee:

We are now in the happy position of being effectively fully staffed with all of the specialists and the experienced people that we wanted to have. So we are now, in terms of the budget allocation for our staffing, in a happy position in that regard.27

20 Annual Report 2017-18, p. 2.

21 Annual Report 2017-18, p. 33.

22 Annual Report 2015-16, p. 32.

23 Parliamentary Joint Committee on ACLEI (committee), Examination of the Annual Report of the

Integrity Commissioner 2015-16, April 2018, p. 22.

24 Examination of the Annual Report of the Integrity Commissioner 2015-16, p. 22.

25 ACLEI, Annual Report of the Integrity Commissioner 2015-16 (Annual Report 2015-16), p. 97.

26 ACLEI, Annual Report of the Integrity Commissioner 2016-17, (Annual Report 2016-17), p. 27.

27 Mr Michael Griffin, Committee Hansard, 20 September 2019, p. 3.

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Committee comment 2.20 The committee notes the expansion of ACLEI's jurisdiction to encompass a broader view of what constitutes a 'law enforcement' agency. This continues to have a significant impact on ACLEI in 2017-18. The committee notes that

ACLEI has undertaken a systemic review of its processes in order to ensure the increased workload does not impact ACLEI's capacity to focus on investigation of matters involving serious and systemic corruption.

2.21 The committee is pleased to note the establishment of the VIT and the rollover of funds to allow this initiative to continue. The committee recognises that the recruitment of suitable specialist staff for the VIT was challenging but ultimately successful. The committee further recognises that the establishment of the VIT itself reflects the responsiveness of ACLEI, as the need for the specialist unit was properly recognised after corruption risks were exposed during a joint investigation with Home Affairs.

2.22 The committee notes that while ACLEI has experienced recruitment challenges beyond those relating to VIT staff, ACLEI is now fully staffed. The committee notes that while this will help address the legacy of investigations, it is still unknown whether the current staffing levels will be sufficient to ensure that ACLEI will retain the capacity to investigate all issues that involve serious and systemic corruption. The committee will continue to review ACLEI operations with this capacity in mind.

Performance framework 2.23 The Portfolio Budget Statements (PBS) set out the following outcome and corresponding program for ACLEI:

Outcome 1: Independent assurance to the Australian Government that Commonwealth law enforcement agencies and their staff act with integrity by detecting, investigating and preventing corruption.

Program 1.1: Detect, investigate and prevent corruption in prescribed law enforcement agencies; assist law enforcement agencies to maintain and improve the integrity of staff members.28

2.24 The ACLEI Corporate Plan 2017-18 states:

The LEIC Act and PBS together establish a framework whereby the Integrity Commissioner and the relevant agency heads can prevent and deal with corrupt conduct jointly and cooperatively. Accordingly, the Integrity Commissioner—as an independent officer—aims to ensure that indications and risks of corrupt conduct in law enforcement agencies are identified and appropriately addressed, to strengthen those agencies against compromise.29

28 Commonwealth of Australia, Attorney-General's Portfolio, Portfolio Budget Statements 2017-18,

pp. 61-62.

29 ACLEI, Corporate Plan 2017-18, p. 1.

11

2.25 The Annual Report 2017-18 outlines five performance criteria which 'track how ACLEI is progressing towards meeting its purpose'.30 These criteria are then used for analysis in the performance statement later in the Annual Report 2017-18.

Strategic priorities and activities 2.26 The Annual Report 2017-18 outlines the activities that have been undertaken to meet the ten strategic priorities set out in ACLEI's Corporate Plan, for the four year period from 2017-2021.31 These priorities—five each of capability

and delivery priorities—were selected with 'regard to the main factors likely to be encountered across the four-year term of this Plan'.32

2.27 The Corporate Plan 2017-18 then establishes 10 activities to be undertaken during the upcoming year to operationalise these priorities and links which strategic priority(s) the activity relates to.33

Table 2.1 ACLEI 2017-18 activities to achieve strategic priorities

Strategic Priority 2017-18 activities

Integrity leadership Place a focus on Integrity Leadership as a driver of culture and mitigator of risk. Continue to engage with LEIC Act agency heads—and, as appropriate, across government—to focus and align anti-corruption efforts.

Government strategy Respond to priorities of Government, including the establishment of the Department of Home Affairs. Contribute to external reviews and dialogues about ACLEI's role in the public sector integrity framework— including the 2018 Open Government Partnership review.

Corruption-enabled crime Engage with relevant agencies to strengthen joint understandings of corruption methods and motivations—

including in administration of biosecurity, anti-money laundering and visa arrangements—and the role of corruption as an enabler of serious crime types.

Internal culture Maintain and reinforce a professional, adaptive culture across ACLEI's Canberra and Sydney locations—focussing on efficiency, accountability and delivering value.

30 Annual Report 2017-18, p. 7.

31 Annual Report 2017-18, pp. 7-12.

32 Corporate Plan 2017-18, p. 4.

33 These activities can change from year to year. The 10 activities identified to achieve the strategic

priorities are different in the Corporate Plans for 2016-17 and 2017-18.

12

Strategic Priority 2017-18 activities

Priority setting Develop improved decision tools that better support Operational case selection and resource allocation in a more complex organisational environment. Examine options to improve case data management, linking and reporting.

Intelligence gathering

Continue to reinforce ACLEI's ability to detect serious and systemic corruption through the enhancement of ACLEI's intelligence collection capability—including through human intelligence collection—and targeted detection projects and investigation task forces with other agencies.

Technical capabilities Review and refine ACLEI's key operational capabilities— such as forensic financial analysis, law enforcement data access, and legal service delivery—to enhance operational efficiency and effectiveness.

Prevention Proactively disseminate information about corruption risks and vulnerabilities to allow LEIC Act and other relevant agencies to disrupt insider threat. Work with LEIC Act agencies to continue to attune their integrity systems to a dynamic risk environment.

Relationships Explore new or strengthened relationships with counterpart agencies, and more broadly, to build capability to combat corruption-enabled crime.

Facilities Commission a fit-for-purpose operations base for Sydney staff.

Source: Corporate Plan 2017-18, p. 3.

2.28 The Annual Report 2017-18 then lists a range of events and actions undertaken for each activity area. However, as none have a numerical or quantitative measure, it is hard to ascertain whether the listed activities meet expected outcomes.34

34 Annual Report 2017-18, pp. 8-12.

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Annual performance statement 2.29 ACLEI reports on its performance during a reporting period under five performance criteria, discussed individually below.

Performance criterion one: The corruption notification and referral system is effective 2.30 Criterion one relates to the effectiveness of ACLEI's corruption notification and referral system, and specifically includes:

 law enforcement agencies notifying ACLEI of corruption issues and related information in a timely way;  other agencies or individuals providing information about corruption issues, risks and vulnerabilities to ACLEI;  partner agencies indicating confidence in sharing information or intelligence

with ACLEI;  ACLEI prioritising credible information about serious or systemic corruption; and  ACLEI's support of awareness-raising activities in agencies within the

Integrity Commissioner's jurisdiction, including ACLEI's participation in joint initiatives.35

2.31 The Annual Report 2017-18 states that the corruption notification and referral system is effective, as evidenced by the heads of LEIC Act agencies continuing to engage positively with their obligations to notify the Integrity Commissioner of corruption issues.

2.32 In order to maintain this 'strong basis of trust and strategic alignment', ACLEI undertakes a range of proactive initiatives to help assure the corruption notification and referral system is effective. During the reporting period the Integrity Commissioner met with all heads of LEIC Act agencies to provide feedback on corruption vulnerabilities observed during investigations, and how those vulnerabilities might be addressed.36 To further support awareness raising, ACLEI officers made eleven presentations during the reporting period to LEIC Act Agencies and the broader public service.37

2.33 The committee sought information from ACLEI on the accuracy of using notification totals to determine the efficacy of the referral system, asking whether a reduced notification rate could either indicate effective corruption measures or, alternatively, insufficient detection methods. The Integrity Commissioner informed the committee that this is a risk that ACLEI is aware of and has taken action on. ACLEI's Director of Corruption Prevention meets

35 Annual Report 2016-17, p. 21.

36 Annual Report 2017-18, p. 23

37 Annual Report 2017-18, p. 25.

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regularly with counterparts in other agencies, and if the notification rates are low, engages those agencies to review whether it may be a case of insufficient detection. The Integrity Commissioner told the committee that from these ongoing relationships, ACLEI is very confident in the internal processes of the AFP, and regards Home Affairs as approaching a similar level of maturity in corruption detection.38

2.34 The Annual Report 2017-18 further stated that the efficacy of the notification and referral system is shown by the continued trust shown by partner agencies in sharing information and intelligence with ACLEI, the number of joint investigations and the number of staff seconded between ACLEI and partner agencies.39

2.35 The Annual Report 2017-18 outlined that the number of notifications remained relatively stable in 2017-18, relative to previous reporting periods, with an overall increase in notifications from the AFP and a decrease in notifications from Home Affairs.40

2.36 The creation of Home Affairs in December 2017 brought around 1000 new staff into ACLEI's jurisdiction—these staff work across areas that may pose significant corruption risk, yet had not previously been subject to law enforcement integrity arrangements.41 The Annual Report 2017-18 observed that an increase in referrals following the expansion in ACLEI's jurisdiction may be delayed as Home Affairs staff adjust to new integrity arrangements.42

2.37 The Annual Report 2017-18 also noted that, with a few exceptions, notifications from agencies were provided in a timely fashion. Where an exception occurred, ACLEI worked with the relevant agency to address the issue.43

Notifications from LEIC Act agencies 2.38 The Annual Report 2017-18 indicated that the number of notifications during the reporting period remained relatively stable relative to the previous year, despite there being a second significant increase in staff under the jurisdiction

of ACLEI following the creation of Home Affairs part-way through this reporting period.

38 Mr Michael Griffin, Committee Hansard, 20 September 2019, pp. 5-6.

39 Annual Report 2017-18, p. 25.

40 Annual Report 2017-18, p. 67.

41 This increase is in addition to the increase that resulted from the Department of Immigration and

Border Protection staff being included in ACLEI's jurisdiction.

42 Annual Report 2017-18, p. 25

43 Annual Report 2017-18, p. 23.

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2.39 With regard to the decrease in the number of notifications received in 2017-18 compared to the peak in 2015-16, the Integrity Commissioner told the committee that there had been a large inflow of material associated with the expansion of ACLEI's jurisdiction from that first increase in staff under its jurisdiction, which is now reducing in volume.

We had what we call the bubble—the large inflow of material. As you follow the trend line over the five years, the bubble goes up but is now dropping away. It's plateaued and we think is at a much more manageable level, so it was an historical blip, if you like, as the agency rapidly increased its jurisdiction.44

2.40 The number of notifications from LEIC Act agencies from 2012-13 to 2017-18 is detailed in Table 2.2.

Table 2.2 Notifications from LEIC Act agencies, 2013-14 to 2017-18

2013-14 2014-15 2015-16 2016-17 2017-18

69 71 185 135 128

Source: Annual Report 2017-18, p. 24.

2.41 Further details concerning corruption issues notified by LEIC Act agencies are found in Appendix 3 (Statistical Reporting) of the Annual Report 2017-18. The primary driver of corruption notifications are issues pertaining to 'abuse of office' (103 in total).45

2.42 In 2016-17, DIBP provided the bulk of corruption issues, but in 2017-18 this was overtaken by the AFP (66). Home Affairs provided the second highest (57), followed by the ACIC (3) and DAWR (5); AUSTRAC, meanwhile, had no notifications. The total number of corruption issues notified by LEIC Act agencies for 2017-18 under section 19 of the LEIC Act by corruption classification is detailed in Table 2.3.46 The 2016-17 results are included in brackets.

44 Mr Michael Griffin, Committee Hansard, 20 September 2019, p. 2.

45 Annual Report 2017-18, p. 67.

46 The LEIC Act, section 19, specifies the notification of corruption issues by law enforcement agency

heads. This includes the requirements for an agency head to notify the Integrity Commissioner of a corruption issue and to indicate whether the corruption issue is a significant corruption issue. Section 19 states circumstances that an agency head is not required to notify the Integrity Commissioner, including whether a section 17 agreement between the Integrity Commission and the agency head has been made. See LEIC Act, s. 19.

16

Table 2.3 Corruption issues notified in 2017-18 under section 19-by corruption class, as assessed upon receipt

ACIC AFP DAWR AUSTRAC DIBP TOTAL

Abuse of office

2 (1) 48 (37) 2 (3) 0 (2) 51 (81) 103 (124)

Pervert the course of justice

0 (0) 0 (3) 0 (0) 0 (0 ) 1 (0) 1 (3)

Corruption of any other kind 1 (0) 18 (3) 0 (2) 0 (0) 5 (3) 24 (8)

Total 3 (1) 66 (43) 2 (5) 0 (2) 57 (84) 128 (135)

Source: Annual Report 2017-18, p. 67.

2.43 The Annual Report 2017-18 highlighted that an agreement under section 17 of the LEIC Act was established between the Integrity Commissioner and the Secretary of Home Affairs, which defines and streamlines the manner in which corruption issues are notified and managed. Section 17 agreements permit the Integrity Commissioner to enter into a written agreement with the heads of LEIC Act agencies concerning:

(a) the kinds of issues that are significant corruption issues in relation to staff members of the agency; (b) the level of detail required to notify the Integrity Commissioner of a corruption issue; (c) the way in which information or documents in relation to a corruption

issue may be given to the Integrity Commissioner (whether for the purpose of notifying the Integrity Commissioner or allowing the Integrity Commissioner to manage, oversee or review an investigation or otherwise); and (d) the level of detail required in the final report given to the Integrity

Commissioner on the law enforcement agency's investigation of a corruption issue.47

2.44 The section 17 agreement with Home Affairs follows a similar agreement between the Integrity Commissioner and the AFP Commissioner made in 2015-16. The Annual Report 2017-18 states:

These agreements result in significant investigative efficiencies. However, as LEIC Act agency heads must notify the Integrity Commissioner of all instances of corruption, significant or otherwise, such agreements do not of themselves affect the number of notifications made to the Integrity Commissioner. In addition, all matters notified to the Integrity Commissioner are assessed, and on occasion the Integrity Commissioner

47 LEIC Act, s. 17.

17

may decide that a matter notified as 'not significant' is, in fact, significant, and should be treated as such.48

Referrals from other sources 2.45 The Annual Report 2017-18 outlines that another source of credible information about corruption is provided by government agencies outside the formal LEIC Act processes. This is generally information that arises

incidentally when those agencies are conducting criminal investigations. The number of such referrals fluctuates year to year, dependent upon the operational focus of those external agencies.

2.46 To ensure the continued flow of such referrals, ACLEI fosters inter-jurisdictional partnerships, including through regular meetings with state-based law enforcement agencies. The referrals from such agencies in 2017-18 are outlined below.

Table 2.4 Referrals from other sources

Referrals from other sources 2013-14 2014-15 2015-16 2016-17 2017-18 Government agencies only

15 24 39 18 24

Total referrals (all sources)

23 30 48 19 28

Source: Annual Report 2017-18, p. 24

Own-initiative investigations 2.47 Under the LEIC Act, the Integrity Commissioner has the power to commence own-initiative investigations. In 2017-18, ACLEI recorded only one own-initiative investigation, a decrease from the four recorded in 2016-17 and

six recorded in 2015-16.49

Assessments of notifications 2.48 The Annual Report 2017-18 details the number of assessments of notifications received by ACLEI from 2013-14 to 2017-18. In 2017-18, ACLEI made 167 assessments, with all of those assessments completed with the 90-day

benchmark.50 The assessment statistics for the last five reporting periods are detailed in Table 2.5.

48 Annual Report 2017-18, p. 24.

49 Annual Report 2017-18, p. 24 and 71.

50 Annual Report 2016-17, p. 22.

18

2.49 The Integrity Commissioner told the committee that the term 'assessment' does not do the process full justice, as it includes a preliminary intelligence workup to assess risk as well as a factual evaluation.51

Table 2.5 Assessment statistics, 2012-13 to 2017-18

Assessment statistics 2013-14 2014-15 2015-16 2016-17 2017-18 Total assessments completed 75 120 190 193 167

% that met the 90-day benchmark (against the target of 75%)

64% 83% 63% 89% 100%

Source: Annual Report 2017-18, p. 24.

2.50 ACLEI told the committee that the key performance indicator (KPI) will be reduced to 30 days, with a benchmark of 90 per cent of notifications assessed within that 30 day period. The Integrity Commissioner highlighted that this reduced timeframe is in response to the risk that notifying agencies carry during the assessment period. The Integrity Commissioner told the committee 'we've put a lot of resourcing and emphasis on reducing that time frame so that the risk for them is concomitantly reduced, and that provides some comfort to the agencies'.52

Committee comment 2.51 The committee recognises that the expansion of ACLEI's jurisdiction, first in 2015 and then in 2017, had the effect of significantly increasing the notification workload and subsequently the investigation workload of ACLEI. The

committee commends the work done by ACLEI to bring the number of notifications in-hand down to a more manageable level through a range of initiatives. These include developing a triage tool to assess the level of risk associated with individual notifications, as well as developing greater capability in LEIC Act agencies to conduct their own investigations into lower-risk corruption issues.

2.52 Concerning ACLEI's assessment statistics, the committee again commends ACLEI on the high completion rates for assessments, with ACLEI completing 100 per cent of assessments within 90 days, exceeding its benchmark of 75 per cent. The committee welcomes ACLEI's intention to reduce the KPI assessment time to 90 per cent of notifications to be assessed within 30 days. The committee recognises the positive impact a reduced assessment time has on the corruption risk that LEIC Act agencies carry while assessments are conducted.

51 Mr Michael Griffin, Committee Hansard, 20 September 2019, p. 5.

52 Mr Michael Griffin, Committee Hansard, 20 September 2019, p. 5.

19

2.53 In its examination of the Integrity Commissioner's Annual Report 2016-17, the committee made a recommendation on the notification statistics that ACLEI includes in annual reports. The committee recommended that ACLEI include:

 the total number of assessments conducted;53  the total number of assessments completed;  the total number of assessments completed within the 90-day benchmark; and

 the percentage of assessments that met the 90-day benchmark.54

2.54 The committee notes that in the Annual Report 2017-18, ACLEI has included all the statistics requested, with the exception of the total number of assessments conducted. Including this statistic would allow better tracking of assessments over reporting periods.

ACT Integrity Commission 2.55 The Annual Report 2017-18 noted that an inquiry of the Australian Capital Territory (ACT) Legislative ACT Legislative Assembly recommended the ACT Government establish an Integrity Commission with oversight of ACT

Policing. ACLEI noted '[s]haring jurisdiction of the AFP with the ACT body would present significant administrative and operational challenges.55

2.56 Since that time, the ACT Integrity Commission has been established, however under its establishing legislation it does not consider complaints about the Australian Federal Police or members of the Australian Federal Police.56

Recommendation 1

2.57 The committee recommends that the Australian Commission for Law Enforcement Integrity includes in its annual reports the total number of assessments conducted in each year.

Performance criterion two-investigations conducted professionally and efficiently 2.58 Criterion two relates to the professional and efficient conduct of ACLEI's investigations and the value that ACLEI adds to the law enforcement integrity

system. Specifically, criterion two requires that:

53 Assessments conducted refers to the number of assessments underway, regardless of whether they

have been completed.

54 Committee, Examination of the Annual Report of the Integrity Commissioner 2016-17, p. 69.

55 Annual Report 2017-18, p. 25.

56 ACT Integrity Commission, What can’t the Commission investigate?, www.integrity.act.gov.au/

reporting-corruption/what-matters-cant-the-commission-investigate (accessed 21/02/2020).

20

 each investigation considers corruption risk and the broader impact on law enforcement outcomes;  operational resources are actively managed and targeted for maximum effect; and  risks relating to the operating context of law enforcement agencies are taken

into account and, in appropriate circumstances, mitigation strategies are agreed with the agency concerned.57

Investigations conducted by ACLEI 2.59 In 2017-18, ACLEI's investigation workload was historically high with 282 corruption issues under active investigation. The high workload was in part a consequence of the large number of investigations carried forward from

2016-17. In 2017-18 itself, ACLEI in fact commenced far fewer investigations than in previous years, which 'reflected an even stronger focus on identifying those matters which indicate serious or systemic corruption and which ACLEI should investigate'.58

2.60 In comparison, in 2016-17 ACLEI commenced 107 investigations (including joint investigations), with a total of 242 active investigations and 14 concluded. In 2014-15, ACLEI had 75 active investigations, and in 2015-16 this increased to 144.59

2.61 The committee's examination of the Annual Report 2016-17 noted that in 2016-17, the number of concluded investigations did not appear to have kept pace with the increase in investigations commenced.60 As noted in detail earlier in this chapter, ACLEI addressed this proactively in 2017-18 by undertaking a systemic review of its corruption referral assessment and investigation process, and subsequently by implementing a triage system for new assessments and a consolidation of its existing investigation workload.

2.62 The Integrity Commissioner told the committee:

In the reporting period under consideration, we embarked on a consolidation phase. What I mean by that is we looked at the vast increase in the workload, much of which was legacy material from the agency that came into jurisdiction, bringing it with them. So we embarked on a triaging process of that material. That is ongoing because, as you'd appreciate, the act requires me to dedicate the resources to the area of serious and systematic corruption, so we've been ruthless in that regard so that we can focus on the really sophisticated organised crime attacks that we identify.61

57 Annual Report 2017-18, p. 25.

58 Annual Report 2017-18, p. 25.

59 Annual Report 2016-17, p. 23

60 Examination of the Annual Report of the Integrity Commissioner 2016-17, p. 19.

61 Mr Michael Griffin, Committee Hansard, 20 September 2019, p. 2.

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Table 2.6 Corruption issues investigated by ACLEI, 2013-14 to 2017-18

Corruption issues investigated by ACLEI62

2013-14 2014-15 2015-16 2016-17 2017-18

Number commenced

23 42 76 107 55

Total active in the year 45 75 144 242 282

Number concluded

12 7 8 14 52

Source: Annual Report 2017-18, p. 26.

2.63 More detail on ACLEI investigations is found in Appendix 3 of the Annual Report 2017-18.

Table 2.7 ACLEI investigations carried forward to 2017-18, by year of notification or referral63

ACLEI or joint investigations ACIC AFP DAWR AUSTRAC Home Affairs

Total

2009-10 3 (3) 0 (0) NA NA NA 3 (3)

2010-11 0 (0) 2 (2) NA NA 0 (0) 2 (2)

2011-12 2 (2) 2 (4) NA NA 1 (1) 5 (7)

2012-13 0 (0) 0 (4) NA NA 2 (4) 2 (8)

2013-14 0 (0) 9 (11) 2 (2) 0 (0) 4 (5) 15 (18)

2014-15 2 (3) 8 (9) 1 (2) 0 (0) 8 (17) 19 (31)

2015-16 4 (5) 31 (34) 3 (4) 0 (0) 25 (33) 63 (76)

2016-17 2 (1) 23 (26) 7 (6) 0 (0) 46 (50) 78 (83)

2017-18 3 7 2 0 31 43

Total under instigation by ACLEI as of 30 June 2018

16 (14) 82 (90) 15 (14) 0 (0) 117

(110)

230 (228)

Source: Annual Report 2017-18, p. 75.

2.64 Table 2.7 shows a significant reduction in investigations carried forward from 2016-17, particularly those from the AFP and Home Affairs.

2.65 Despite the continuing high number of investigations commenced and active in 2017-18, ACLEI reported positive operational results for the year, which included:

 seven prosecutions were concluded and six resulted in convictions;

62 Includes joint investigations.

63 Figures in brackets are investigations carried forward into 2017-18.

22

 three final investigation reports covering four corruption issues were provided to the Minister; and  a number of disseminations of information made, which provided criminal intelligence or vulnerability assessments, or to enable disciplinary action

concerning serious breaches of duty.64

2.66 The three investigation reports included:

 Operation Marcks—an investigation into a DIBP official who travelled overseas without a passport.  Operation Flax—an investigation into allegations of misuse of Commonwealth resources by an ACIC senior executive.  Operation Shinobi—an integrity assurance investigation relating to officers

of the Australian Criminal Intelligence Commission.65

2.67 The Annual Report 2017-18 provided positive examples of investigative work, including Operation Murray, a long-running joint investigation with the AFP with assistance from the NSW Police Force which resulted in the conviction of an AFP officer for corruption-related offences. Operation Zeus, another joint operation with the AFP and also Home Affairs, which resulted in the arrest and charging of an Australian Border Force officer for corruption-related offences.66

2.68 In addition to the above investigations, during the reporting period ACLEI operationalised its corruption prevention function, intended to provide strategic information on current and emerging integrity risks to LEIC Act agencies. This activity was integrated with the Intelligence Assessments team in order to improve the timeliness of ACLEI's capacity to disseminate information to such agencies during investigations.67

2.69 ACLEI undertook another project during the reporting period to expand ACLEI's investigative capabilities and enhance external relationships with key sources of information. The project sought to confirm and formalise existing arrangements with government and private enterprise information sources, as well as seek access to new data.68

64 Annual Report 2017-18, p. 26.

65 Annual Report 2017-18, pp. 15 and 64-65.

66 Annual Report 2017-18, p. 26.

67 Annual Report 2017-18, p. 27.

68 Annual Report 2017-18 p. 27.

23

Complexity of visa fraud investigations 2.70 The Annual Report 2017-18 noted that investigating visa fraud that involves law enforcement officers is highly complex due to the legal, diplomatic and administrative challenges of operating internationally.1

Committee comment 2.71 The committee notes the barriers to investigating corruption that can arise in international operations and intends to examine this issue further in future.

ANAO audit of the operational efficiency of ACLEI 2.72 In 2018, the Australian National Audit Office (ANAO) conducted its first ever performance audit on ACLEI and released its recommendations on 28 August 2018 in its report Operational efficiency of the Australian Commission for Law

Enforcement Integrity.2

2.73 The objective of the ANAO audit was to examine the efficiency of ACLEI in detecting, investigating and preventing corrupt conduct. It considered whether ACLEI had established appropriate arrangements to assess its efficient use of resources, and how ACLEI's efficiency compared with similar entities and its own previous performance. The scope of this audit did not extend to ACLEI's operational effectiveness and it did not seek to form a conclusion on the adequacy of ACLEI's resourcing.3

Table 2.8 ANAO recommendations and ACLEI responses

Recommendation no. 1 Paragraph 2.21 ACLEI develop performance measures focussed on the efficiency of its operations and collect

additional data to report on its performance against those measures. ACLEI’s response: Agreed with qualifications.

Recommendation no. 2 Paragraph 2.41 ACLEI investigate whether it could introduce a more structured review process to support the

prioritisation of available resources on a risk basis to the highest value investigations, including time or milestone based intervals to trigger decisions on the ongoing allocation of resources. ACLEI’s response: Agreed.

Recommendation no. 3 Paragraph 3.38

ACLEI periodically compare and benchmark its operational efficiency against comparable

1 Annual Report 2017-18, p. 27.

2 Australian National Audit Office, Auditor General Report No. 4 2018-19: Operational Efficiency of the

Australian Commission for Law Enforcement Integrity, p. 7.

3 Auditor General Report No. 4 2018-19, p. 8.

24

organisations including other anti-corruption

bodies, and with its own performance over time, to determine whether changes to its current processes are required. ACLEI’s response: Agreed.

Source: Auditor General Report No. 4 2018-19, p. 9.

2.74 In the committee's report on its examination of the Integrity Commissioner's Annual Report 2016-17, the committee deferred its consideration of the ANAO's findings until its examination of the Integrity Commissioner's Annual Report 2017-18 and noted:

The audit was part of a series of performance audits focussing on efficiency across Commonwealth agencies, and included ACLEI because it 'has undergone various changes to its funding and jurisdiction over the past 10 years'.

As part of this audit, the ANAO considered ACLEI's increased workload, and its operational capacity to manage this work. The ANAO sought to determine whether ACLEI has established appropriate arrangements to assess its efficiency and how ACLEI compares to similar anti-corruption agencies.4

2.75 ACLEI's Executive Director, Secretariat, Mr Craig Furry, summarised the three recommendations of the ANAO:

The first recommendation was that ACLEI develop performance measures focused on the efficiency of its operations and collect additional data to report on its performance against those measures. The second recommendation was that ACLEI investigate whether it could introduce a more structured review process to support the prioritisation of available resources on a risk basis to the highest value of investigations, including time or milestone based intervals, to trigger decisions on the ongoing allocation of resources. And the third recommendation was that ACLEI periodically compare and benchmark its operational efficiency against comparable organisations, including other anticorruption bodies, and with its own performance over time to determine whether changes to its current processes are required.5

2.76 The Integrity Commissioner told the committee that ACLEI had anticipated much of what was in the ANAO report and had significant programs underway to address those issues.6

4 Examination of the Annual Report of the Integrity Commissioner 2016-17, p. 23.

5 Mr Craig Furry, Executive Director, Secretariat, ACLEI, Committee Hansard, 20 September 2019,

p. 4.

6 Mr Michael Griffin, Committee Hansard, 20 September 2019, p. 10.

25

Committee comment 2.77 The committee acknowledges that the continued high number of investigations conducted by ACLEI is a result of its expanded jurisdiction. As stated in previous years, the committee recognises the complex nature of these

investigations impacts on ACLEI's ability to promptly finalise investigations, and the committee supports ACLEI's careful management and prioritisation of cases involving serious and systemic corruption.

2.78 The committee notes the recommendations put forward by ANAO on improving the efficiency of ACLEI's corruption investigation functions, and that ACLEI agreed to all three recommendations and has taken action to implement them. The committee will examine this implementation during its upcoming examination of the Annual Report 2018-19.

Performance criterion three-ACLEI monitors corruption investigations conducted by law enforcement agencies 2.79 Criterion three considers ACLEI's support to LEIC Act agencies undertaking internal investigations, specifically:

 All agency corruption investigations reports provided to ACLEI for review are assessed by ACLEI for intelligence value and completeness; and  ACLEI liaises regularly with agencies' professional standards units about the progress of internal investigations.7

2.80 For this reporting period, ACLEI reported another increase in the number of internal investigations conducted by LEIC Act agencies in 2017-18. Of the 513 corruption issues under investigation in 2017-18, 231 (45 per cent) were conducted by LEIC Act agencies, 'which—unless reconsidered and discontinued with the agreement of ACLEI—result in a section 66 report for review by the Integrity Commissioner'.8 Of those investigations, the majority were conducted by Home Affairs (123 or 53 per cent of the total), followed by the AFP (98 or 42 per cent of the total).9 Table 2.9 provides data on the number of corruption issues investigated by LEIC Act agencies between 2013-14 and 2017-18.

7 Annual Report 2017-18, p. 27.

8 Annual Report 2017-18, p. 28. Section 66 of the LEIC Act requires agencies to prepare a report

once a corruption investigation is completed, detailing findings, evidence, and action taken or proposed to be taken, and to provide a copy of the report to the Integrity Commissioner. See LEIC Act, s. 66.

9 Annual Report 2017-18, p. 28.

26

Table 2.9 Corruption issues investigated by LEIC Act agencies, 2013-14 to 2017-18

Corruption issues investigated by LEIC Act agencies

2013-14 2014-15 2015-16 2016-17 2017-18

Total active in the year 105 127 131 183 23110

Source: Annual Report 2017-18, p. 28.

2.81 Agencies report back to ACLEI on the outcomes of these internal investigations in the form of 'section 66 reports'. ACLEI reviewed 26 section 66 reports during the 2017-18 reporting period, compared with 62 in the previous reporting period, finding no issues for the Integrity Commissioner to make comment on regarding the process of or outcome of those investigations. A further 27 section 66 reports were received, with reviews to be conducted in 2018-19.11

2.82 Mr Dallas Rogers, Acting Executive Director, Operations, told the committee that ACLEI has become more proactive in reaching out to LEIC Act agencies to ensure that section 66 reports are more consistent across all jurisdictional agencies, including standardised information to make it easier to review the investigations for meeting requirements. In addition, ACLEI has nominated a senior investigator to the process, whose role is to be proactive in contacting agencies during their internal investigations to provide assistance and to assure the Integrity Commissioner that items referred to agencies for investigation are being treated seriously.12

Regulation 15—external referrals 2.83 As of 2017, ACLEI must include data on external referrals to provide details of corruption issues referred by the Integrity Commissioner to LEIC Act agencies.13

2.84 In total, during 2017-18 the Integrity Commissioner referred 88 corruption issues to LEIC Act agencies, an increase from 54 referrals in 2016-17. This reflects advice from the Integrity Commissioner, discussed earlier in this chapter, that ACLEI is prioritising investigations of corruption referrals that indicate serious and systemic issues, while referring back to agencies the other matters for internal investigation.

10 Note that this number has since been amended to 232. See section on data errors later in this

chapter.

11 Annual Report 2017-18, p. 28.

12 Mr Dallas Rogers, Committee Hansard, 20 September 2019, p. 7.

13 Law Enforcement Integrity Commission Regulations 2017, reg. 15.

27

Table 2.10 Corruption issues referred by the Integrity Commissioner to a government agency for investigation in 2017-18 under section 26(1)(b) or section 26(1)(c)—by corruption class as assessed upon receipt

ACIC AFP DAWR AUSTRAC Home

Affairs Total

Abuse of office [s6(1)(a)] 1

(0)

29 (9)

4

(1)

0

(1)

41 (38)

75 (49)

Pervert course of justice [s6(1)(b)] 0

(0)

1

(2)

0

(0)

0

(0)

0

(0)

1

(2)

Corruption of any other kind [s6(1)(c)]

1

(0)

6

(2)

1

(0)

0

(0)

4

(1)

12 (3)

Total corruption issues referred for investigation in 2017-18

2

(0)

36 (13)

5

(1)

0

(1)

45 (39)

88 (54)

Source: Annual Report 2017-18, p. 73.

Committee comment 2.85 The committee notes the increase in the number of internal investigations conducted by LEIC Act agencies. The committee agrees this is largely a reflection of ACLEI's response to its significantly increased workload, part of

which is to refer matters with a lower risk profile back to agencies for internal investigation under ACLEI oversight. The committee notes the Integrity Commissioner's advice that this approach enables ACLEI to focus on ensuring that issues raising concerns of serious and systemic corruption are investigated in a timely fashion. The committee commends this approach to prioritise investigations based on risk, noting that until a finding is made on the more serious cases, the agency carries an ongoing corruption risk. Any action taken by ACLEI to reduce the timeframe between notification and the conclusion of any investigation is a positive move that reduces risk.

2.86 The committee notes that in its examination report on the Annual Report 2016- 17, the committee asked that ACLEI include current and past data on these Regulation 15 referrals, which ACLEI has done in the Annual Report 2017-18. The committee thanks ACLEI for being responsive to its requests.

Performance criterion four-ACLEI insights contribute to accountability and anti-corruption policy development 2.87 Criterion four addresses ACLEI's accountability and anti-corruption policy development, such as:

28

 the Integrity Commissioner to make recommendations for improvement to corruption prevention or detection measures;  engagement with government or in other forums that relate to corruption prevention or enhancing integrity arrangements (such as making

submissions);  targeted presentations about integrity issues made to a diverse range of audiences; and  analysis of patterns and trends in law enforcement corruption to be

included in the Integrity Commissioner's annual report and other publications.14

2.88 The Annual Report 2017-18 outlines a range of activities undertaken by ACLEI that relate to performance criterion four. During the reporting period ACLEI engaged regularly with individual LEIC Act agencies, as well as broader agencies, to improve their specific corruption-related policies and procedures, including:

 The Integrity Commissioner worked with the Home Affairs Secretary to ensure the increased risk profile of that agency arising from its expanded jurisdiction was appropriately acknowledged and addressed.

 Corruption vulnerabilities observed in operations were communicated to relevant agencies to allow them to be addressed.  ACLEI continued work with LEIC Act agencies on further development of integrity and anti-corruption frameworks, such as a joint project with

AUSTRAC to test integrity assessment tools.15

2.89 The Annual Report 2017-18 notes that ACLEI provided submissions to three major policy reviews, which identified opportunities for increased understanding of corruption risks and threats posed to the Commonwealth by serious corruption. ACLEI also made a public submission to the Parliamentary Joint Committee on Law Enforcement's inquiry Impact of new and emerging information and communications technology. In addition, ACLEI produced broader thematic reports on corruption risks, such as a paper on the changing opportunities for women in law enforcement, a fact sheet on grooming of law enforcement officials, a corruption prevention toolkit and a case study on integrity risk.16

2.90 Further to the above work, ACLEI also made a total of 22 presentations to LEIC Act agencies and other government agencies, domestic audiences and at an international conference. ACLEI also provided presentations and input to

14 Annual Report 2017-18, p. 28.

15 Annual Report 2017-18, pp. 28-29.

16 Annual Report 2017-18, p. 29.

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seven international initiatives, including to a delegation from the National Assembly of the Republic of Korea and the Indonesian National Police.17

Patterns and trends in corruption 2.91 In line with the requirements of performance criterion four, the Annual Report 2017-18 includes details of patterns and trends in corruption that arose during the reporting period. ACLEI noted that most of these relate to

corruption-enabled border crimes, such as the importation of illicit drugs, visa fraud, and attempts to circumvent Australia’s biosecurity processes.

2.92 The Annual Report 2017-18 noted the following corruption trends:

 Allegations regarding actions of relatively senior staff in some LEIC Act agencies. ACLEI noted that any credible allegations are serious, given the leadership role of senior staff.

 Allegations of corrupt behaviour in the areas of recruitment and promotions for law enforcement officials. ACLEI noted that corruption in human resource recruitment and management can have a corrosive effect in work environments.

 Notifications about alleged involvement of law enforcement officials in the importation of illicit tobacco by organised crime groups.  Some LEIC Act Agencies had a lower notification rate. While this can signal lower corruption, it can also signal underdeveloped detection capabilities.  An ACLEI study found that while women are no less likely than men to

engage in corruption, there are assumptions that women are a lower corruption risk. This means serious misconduct or corruption by female employees may go undetected.  Social capital and monetary relations can expose law enforcement staff to corruption risk.18

2.93 In relation to this last issue, the Integrity Commissioner outlined for the committee the changing nature of corruption incentives from financial incentives to social capital incentives as:

…law enforcement officials acting in corrupt ways not for the traditional understanding of corruption, being acceptance of a financial bribe, but for other reasons, which my corruption prevention staff describe as 'social capital'. That may involve a person doing something for another member of the community for the advantage it gives them in reputation or standing or connections or family facilitation or extended family facilitation.19

2.94 The Integrity Commissioner further described work undertaken to address corruption trends discovered by the VIT:

17 Annual Report 2017-18, p. 29.

18 Annual Report 2017-18, pp. 18-19.

19 Mr Michael Griffin, Committee Hansard, 20 September 2019, p. 6.

30

I have been surprised by the variety of visa fraud. Happily, we've been able to work with both the Department of Home Affairs and the Department of Foreign Affairs and Trade to identify vulnerabilities…and help them to harden their processes, I think, to good effect.20

Committee comment 2.95 The committee commends ACLEI for the work undertaken to strengthen the corruption prevention, identification and investigation capabilities of LEIC Act agencies and broader public service agencies. This work will have the dual

effect of enabling ACLEI to focus on serious and systemic corruption issues, as well as increasing the overall prevention and detection of corruption in Australia's law enforcement community.

Performance criterion five-ACLEI’s governance and risk management controls are effective and take account of its operational role 2.96 Criterion five addresses ACLEI's internal risk management processes, to ensure that:

 systems are in place to ensure ACLEI officers act ethically, comply with legislative requirements and adhere to standards set by the Integrity Commissioner; and

 regular reviews and audits indicate effective governance, risk management and integrity.

2.97 The Annual Report 2017-18 provides information on a number of strategies that ACLEI employs to ensure its own integrity, from recruitment to operational guidance and governance-related boards and committees.

2.98 The ACLEI Audit Committee meets five times each year and provides independent advice to the Integrity Commissioner on ACLEI's accountability and control framework, including the integrity of ACLEI's financial and performance reporting.21

2.99 ACLEI has a strong focus on staff development as a key tool to ensure operational integrity. Actions in this area start with the recruitment process, which includes 'identity checking, criminal background checks, a security questionnaire and compliance with the ACLEI integrity reporting scheme which involves contact reporting and declaration of associations.' The Annual Report 2017-18 further outlines ACLEI's intention to implement psychometric testing at relevant stages of the recruitment process, which will involve developing certain technical and governance requirements.22

20 Mr Michael Griffin, Committee Hansard, 20 September 2019, p. 11.

21 Annual Report 2017-18, p. 30.

22 Annual Report 2017-18, p. 30.

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2.100 The Integrity Commissioner outlined for the committee the actions taken by ACLEI to preserve the integrity of ACLEI's information and security systems, which are maintained at 'Zone 4 standard'.23 This is a key focus of ACLEI's Director of Professional Standards and is done in conjunction with the Attorney-General's Department, which hosts ACLEI within a 'locked-down component of the Attorney-General's Department ICT [information and communications technology] system.' The Integrity Commissioner further noted that ACLEI undertakes random and regular monitoring of its staff regarding 'who they're speaking to and what they're sending out' as well as monitoring for phishing scams.24

Committee comment 2.101 The committee congratulates ACLEI for its overall achievement against the five performance criteria. ACLEI has undergone a long period of transition, encompassing both an expanded jurisdiction as well as a change to the nature

of corruption it investigates. This change to corruption is found in the changing motivations for corruption to include social capital, as well as 'advances' in corruption methods to take advantage of advances in technology.

2.102 These changes have required ACLEI to significantly change its investigation methods, which first required a period of recruitment to ensure it has sufficient staff with the required skillsets. The committee is satisfied that ACLEI has identified these operational risks and changes, and has adapted to meet those challenges.

2.103 The committee will welcome further information from ACLEI on any implementation of psychometric testing during the recruitment process, including information on the effectiveness of this approach.

Data errors identified in Annual Report 2017-18 2.104 As outlined in chapter one, on 28 October 2019 ACLEI advised the committee that in the course of the preparation of the Annual Report 2018-19, certain data contained in the Annual Report 2017-18 was identified as requiring

amendment to reflect current case management system information. ACLEI advised the committee that it did not consider any of these changes met the threshold for mandatory reporting under section 17AH(1)(e) of the Public Governance, Performance and Accountability Rule 2014. These updates include:

23 The Protective Security Policy Framework of the Attorney-General's Department establishes

security standards for entity facilities. For a definition of zone 4 standards, see https://www.protectivesecurity.gov.au/physical/entity-facilities/Pages/default.aspx (accessed 14/01/2020).

24 Mr Michael Griffin, Committee Hansard, 20 September 2019, p. 10.

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 The figures on page 15 of the 2017-18 report for the number of warrants under the Surveillance Devices Act 2004 for the years 2014-15, 2015-16 and 2016-17 have been changed to 3, 8 and 51 respectively in the 2018-19 report, in order to include extensions of warrants in these figures.

 The figure on page 28 of the 2017-18 report for the number of corruption issues investigated by LEIC Act agencies during 2017-18 (shown as 231) has been changed to 232 in the 2018-19 report. This change was made after ACLEI identified that one corruption issue being investigated by ACLEI during 2017-18 (and included in the figure of 282 on page 26 of the Annual Report 2017-18) had been reconsidered under section 42 of the LEIC Act and referred back to the agency for investigation during 2017-18.

 The figures for the number of corruption issues under investigation by LEIC Act agencies during 2014-15 and 2015-16 shown on page 28 of the Annual Report 2017-18 have been changed from 127 to 134 and 131 to 136 respectively in the Annual Report 2018-19.

 The figures for the number of LEIC Act agency investigations carried forward to 2018-19, as shown on page 75 of the Annual Report 2017-18, have been changed as follows:

 For the AFP, the number carried forward that were originally notified or referred in 2012-13 has been changed from 0 to 2, and consequently the total number of AFP issues open at 30 June 2018 has changed from 90 to 92.

 For the Department of Home Affairs, the number carried forward that were originally notified or referred in 2011-12 has been changed from 1 to 2, and the number from 2012-13 has been changed from 0 to 2. Thus the number of Home Affairs issues open at 30 June 2018 has changed from 103 to 106.

 Hence the total number of LEIC Act Agency investigations open at 30 June 2018 has changed from 201 to 206.25

2.105 During the committee's examination of the Integrity Commissioner's Annual Report 2016-17, ACLEI provided information on statistical errors that had been made in the Annual Report 2016-17. At that time, ACLEI informed the committee that internal processes had been 'strengthened through consultation with LEIC Act agencies to cross-check ACLEI's records prior to publication'.26

Committee view 2.106 The committee is grateful for ACLEI's continuing efforts to address any inconsistencies or errors in data reporting. However, as outlined in the committee's examination of the Integrity Commissioner's Annual Report 2016-

25 Mr Craig Furry, Executive Director, Secretariat, ACLEI, correspondence received 28 October 2019.

26 Examination of the Annual Report of the Integrity Commissioner 2016-17, p. 3.

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17, while data reporting is a complex task, data errors have now occurred in the past three ACLEI annual reports.

2.107 The committee notes that in this instance, ACLEI has actioned the committee's past recommendation for prompt reporting of errors and appears to have more quickly informed the committee once the data amendment was identified. The committee thanks ACLEI for the forthright communication. Nevertheless, the data reporting errors themselves are of some minor concern and should be addressed where practical.

Recommendation 2

2.108 The committee recommends the Australian Commission for Law Enforcement Integrity review its data reporting methods, to identify if there are other possible changes to procedure that may reduce instances of post-reporting amendments and to provide greater confidence that data reported is accurate and consistent for the purposes of comparison.

Ombudsman inspections

Ombudsman briefing about controlled operations 2.109 The Commonwealth Ombudsman annually releases the Report on the Commonwealth Ombudsman's activities in monitoring controlled operations. To date there has been no report released for the 2017-18 period.27

2.110 Section 218 of the LEIC Act requires the Commonwealth Ombudsman to provide a briefing to the committee at least once each year about the Integrity Commissioner's involvement in controlled operations under Part IAB of the Crimes Act 1914 during the preceding 12-months. The committee must meet in private for the purposes of receiving such a briefing. The committee met with the Commonwealth Ombudsman on 26 October 2018. This briefing covered the reporting period of 2016-17. When a report for the 2017-18 period has been released, the committee will meet with the Commonwealth Ombudsman to receive a briefing for that period.

Ombudsman report on the Surveillance Devices Act 2004 2.111 The Commonwealth Ombudsman conducts inspections of various law enforcement agencies under section 55 of the Surveillance Devices Act 2004 (Surveillance Act). In September 2018 the Commonwealth Ombudsman

released its Report to the Minister for Home Affairs on agencies’ compliance with the

27 Commonwealth Ombudsman, Publications: Inspection Reports, http://www.ombudsman.gov.au/

publications/reports/inspection/all-reports (accessed 21 January 2020).

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Surveillance Devices Act 2004: For the period 1 January to 30 June 2018 (Surveillance Report).28

2.112 The Surveillance Report detailed outcomes of two inspections of ACLEI surveillance device records within the reporting period, from 9-10 November 2017 and from 21-22 March 2018 respectively. The Surveillance Report identified two issues in the first inspection, in which ACLEI’s reports to the Minister under section 49 of the Surveillance Act contained inaccuracies regarding the kind of surveillance devices used. Following the inspection, ACLEI advised it had amended and provided the Minister with both revised reports.29

Conclusion 2.113 The Annual Report 2017-18 discussed many of the same challenges that were faced by ACLEI in 2015-16 and again in 2016-17; namely, ACLEI's expanded jurisdiction and challenges with the recruitment of qualified personnel to meet

this increased workload. ACLEI outlined for the committee the balancing act of recruiting staff to meet the budget allocation, while ensuring that all staff have the right skills and law enforcement experience to be suitable for ACLEI's very specialised caseload. The committee recognises that this is an ongoing challenge that will require constant adaptation from ACLEI.

2.114 The committee acknowledges the record number of investigations (282) underway in 2017-18, which breaks the previous record of 242 investigations underway, set only the year before in the 2016-17 period. The committee understands that this high number is due to the carryover of investigations commenced in previous years, as ACLEI had actually commenced far fewer investigations in 2017-18 as part of an initiative to focus its investigative work on cases that involve serious and systemic fraud. The committee applauds ACLEI for its range of initiatives that allow this focus, including better triaging of notifications and increased training and collaboration with LEIC Act agencies to allow them to conduct credible internal investigations into 'lower-level' fraud.

2.115 The committee also acknowledges the record number of investigations concluded (51) in 2017-18, which addresses concerns raised by the committee in its examination of the Annual Report 2016-17 that the number of concluded investigations did not appear to have kept pace with the increase in investigations commenced. The committee congratulates ACLEI for the

28 Commonwealth Ombudsman, Report to the Minister for Home Affairs on agencies’ compliance with the

Surveillance Devices Act 2004: For the period 1 January to 30 June 2018, September, 2018.

29 Report to the Minister for Home Affairs on agencies’ compliance with the Surveillance Devices Act 2004:

For the period 1 January to 30 June 2018, p. 5.

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successful outcomes of its initiatives to streamline notification assessments and focus its work on tackling issues that involve serious and systemic fraud.

2.116 ACLEI also faces increasing complexity and sophistication of corruption, as well as new motivations for corruption such as social capital. These changing corruption issues require changing investigation methods. The committee is satisfied that ACLEI is adapting to meet this new corruption environment and congratulates the Integrity Commissioner, Mr Michael Griffin AM, and his staff for their efforts to ensure that ACLEI is able to adapt to continue to address the changing nature of corruption and integrity concerns in Australia's national law enforcement agencies.

Senator Paul Scarr

Chair

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Appendix 1 Additional Information

Answer to Question on Notice 1 ACLEI - Answer to Question on Notice from hearing on 20 September 2019

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Appendix 2

Public Hearings and Witnesses

Friday, 20 September 2019 Committee Room 2S1 Parliament House Canberra

Australian Commission for Law Enforcement Integrity  Mr Michael Griffin, Integrity Commissioner  Mr Craig Furry, Executive Director Secretariat  Mr Dallas Rogers, Acting Executive Director Operations  Mrs Eve Coutts, Director Corporate Services (Chief Financial Officer)