The investigative journalist Nick McKenzie has told a Senate hearing that he has seen major evidence of corruption on taxpayer-funded federal projects involving contractors and subcontractors that could be exposed by a national integrity commission.



McKenzie and Kate McClymont, both Fairfax Media journalists, argued for a national corruption body and tougher whistleblower protections to root out corruption in federal agencies and the private companies that deal with the federal government.

They were giving evidence to a Senate committee investigating the viability of a national integrity commission.

It was established by the senators Dio Wang and John Madigan during the debate on the Australian Building and Construction Commission, when they argued that any corruption investigation should be broadened beyond the construction sector. (The Coalition has used the Senate’s rejection of the ABCC as a reason for the expected 2 July double-dissolution election.)

“I have seen major evidence of corruption on these projects involving corrupt major contractors and subcontractors who win the government contracts, dishing out contracts in a corrupt fashion sometimes with union officials sometimes with private companies,” McKenzie said.



“You could be attacking this sort of corruption via a national watchdog, forgetting about whether someone is in a union or not, looking at simply where the corruption, where it is with a view of protecting taxpayer projects.



“That is not happening at the moment and the huge failure of the trade union royal commission was it did not attack and look at the way companies are acting corruptly in the construction sphere.



“Forget the unions, what’s happening with private companies? And I guarantee you many private companies are rorting federal government projects, ripping off taxpayers and doing it for many years scot free.



“A national agency could expose that, it could debar offending companies, it could clean up the construction industry via a different means and it would do so in a more democratic fashion.”



The Senate inquiry also heard evidence from the Australian Chamber of Commerce and Industry (Acci) and the Rule of Law Institute, both of which had serious reservations about a national corruption body.



Richard Calver of Acci argued that the most important priority was the Australian Building and Construction Commission and that any general anti-corruption body would not substitute for the ABCC.

The Law Council argued for a national strategy for addressing corruption through the Council of Australian Governments process, an updated assessment of national agencies related to integrity and consideration of a federal body based on the assessment.

Malcolm Stewart, the vice-president of the Rule of Law Institute of Australia, said while there may be justification for a proper national integrity body it should be properly structured.

“It is getting an independent person like a retired judge, who is not tied up with [investigators], who is a doubting Thomas looking at these things, not someone who has got involved with the investigation, who becomes enthusiastic and carried away with it,” Stewart said.

The New South Wales Icac has come under fire, including from its own inspector, for the pursuit of the New South Wales public prosecutor Margaret Cunneen – criticism that the Icac commissioner, Megan Latham, has rejected. The high court found Icac had acted beyond the scope of its powers when investigating Cunneen, leading to an independent review of the jurisdiction of Icac. The Baird government subsequently redefined the commission’s powers to focus on “serious and systemic” corruption.

Gabrielle Appleby of the Gilbert and Tobin Centre of Public Law said the NSW Icac model suffered because there was no clear and easy avenue of review for people who are called before a public hearing.

“Where the commission decided to hold a public hearing, there is no clear avenue of review to review the public decision,” she said. “How does an individual seek review of that short of going to the courts?”



Natasha Molt of the Law Council of Australia agreed the greatest concern of the council’s members with the NSW model was of the public hearing aspect of the NSW system – criticised as “show trials” by various commentators.



“A lot of the feedback we have received from our members is the concern at the public hearings really tainting people’s reputation so that is why in our submission we have indicated our preference is for the Queensland model where there is a default of private hearings,” Molt said.



“We would agree with the Gilbert and Tobin centre that there needs to be avenues to allow public hearings to aid transparency.”



McClymont said while the Icac had weathered some adverse publicity over the Cunneen affair, it had not been discredited and, as an institution, it should be maintained.

“It is complete and utter nonsense that Icac has been discredited,” McClymont said. “There has been publicity about the Margaret Cunneen case but, as was previously said, the NSW government under both the premier, Mike Baird, and supported by the opposition leader, Luke Foley, are absolutely adamant that the powers of Icac continue, that the public service it does to our society is important.

“The Cunneen matter has refocused on [the question of] what is systemic corruption and has redefined what people can look at but having said that the government and opposition’s support is for Icac to continue.”