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ELIZABETH:

From Schwartz Media, I’m Elizabeth Kulas. This is 7am.

As ICAC exposes apparent corruption in NSW, focus has been drawn back on the government’s integrity commission - which, among other things, could not make findings of corruption. Mike Seccombe on anti-corruption legislation and how politicians avoid scrutiny.

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Archival tape — Unidentified female reporter #1:

“A NSW corruption hearing has heard Chinese billionaire, Wang Jang Mo gave one hundred thousand dollars in cash to a senior State Labor Party official in 2015.”

Archival tape — Unidentified female reporter #2:

“A Chinese billionaire and an Aldi bag containing 100 thousand dollars in cash - bombshell allegations have been made during the first public hearing into Labor Party donations.”

Archival tape — Unidentified male reporter #1:

“The boss of NSW Labor has been permanently dumped from her role after another day of sensational evidence at the ICAC. Kaila Murnain broke down several times on the witness stand she admitted she should have handled the issue of a suspected donation differently.”

ELIZABETH:

Mike tell me about what ICAC has heard in its inquiry into Labor and Chinese donations in NSW recently.

MIKE:

Well it's heard all sorts of colourful things about various attempts to allegedly circumvent laws in NSW on political donations from developers.

ELIZABETH:

Mike Seccombe is The Saturday Paper’s national correspondent.

MIKE:

It specifically relates to Labor officials and a group called the Chinese Friends of Labor and it's all centred on a fundraising dinner that happened back in early 2015. There have been some quite extraordinary allegations, a billionaire Chinese property developer walking into Labor head office in Sussex street with an Aldi shopping bag and personally delivering a hundred thousand dollars to the party. Incidentally this Chinese billionaire Huang Xiangmo is now not allowed back into Australia because he's been banned from the country on the advice of ASIO for allegedly being an agent of Chinese government influence.

The other aspects to it are that the big donation was allegedly disguised as a series of smaller amounts from straw donors, some of whom could never have afforded such generosity because they weren't well paid. Some of them were owed allegedly strong armed into falsely claiming to have made the donations and one of them sadly took his own life rather than go before an ICAC inquiry. So it's been pretty dramatic.

Apart from that, there's been evidence of a clandestine meeting behind Parliament House between the general secretary of the party Kaila Murnain, who's incidentally now been stood down from her position, and the former Labor MP Ernest Wong and also about a tier former Murnain seeking guidance from the former secretary of the party Sam Dastyari as they drove around Sydney in his car and his advice being to quote ‘cover your arse’ unquote.

There’s been pictures of Xiangmo smiling for Ernest Wong's camera at this party fundraiser as he sat at the top table alongside Bill Shorten, then the federal leader, and Luke Foley, then the state leader and I might add the inquiry still continuing so there's more yet to come.

ELIZABETH:

And how has this been received by Labor?

MIKE:

Well it's seen as being a disaster for the party, I mean it's it's had a number of previous scandals and Anthony Albanese, to his credit, has already said that this is very bad for Labor and promised that there will be a shake up of its procedures and its personnel. So some steps are being taken but it's definitely a very, very bad look.

ELIZABETH:

ICAC’s been around for 30 years in NSW, how did it get started?

MIKE:

Well it is Australia's original and best, dare I suggest, anti-Corruption Commission. It was set up by an Act of the NSW Parliament back in 1988 driven by Nick Greiner who was then the Premier and famously Greiner then became its first victim for wrongdoing that involved offering inducements to an MP. It was established in response to serious concern about a succession of public scandals involving various public institutions in NSW and it was given very broad powers to investigate and expose public corruption, to compel witnesses, to commence its own investigations and importantly to hold public hearings such that justice was not only being done, but was being seen to be done.

Archival tape — Newsreporter Mike Tanker:

“Good afternoon Mike Tanker. Dominating Ten eyewitness news, first at 5 o’clock - the Greiner resignation, the NSW Premier quit this morning.”

Archival tape — Nick Greiner:

“You can imagine my sense of outrage about what does amount to being shot a couple of days before the trial. But nevertheless, politics is what it is.”

ELIZABETH:

Amid Nick Greiner there's been other wins for ICAC. What are some of the other ones?

MIKE:

Oh there've been some very big ones. Famously Eddie Obeid, Ian Macdonald, Barry O'Farrell, another NSW Premier who fell foul of ICAC and wound up having to step down as a result. It's been very active, it's been very effective and it's held in very high public esteem and every other state now, and territory, has to some extent copied the model and every state and territory now has some form of anti-corruption commission; the only jurisdiction that doesn't, is the federal government.

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ELIZABETH:

So obvious question, but why not?

MIKE:

Well the obvious answer, politicians don't want one because presumably they have matters they would rather not see investigated.

ELIZABETH:

We'll be right back.

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ELIZABETH:

Mike, the NSW ICAC is currently exposing what appears to be a number of broad misdeeds around donation law, but there isn't, as you said, any federal body to do similar work at that level. Can you tell me more about the push for a Federal Integrity Commission?

MIKE:

Yes, I can. For many years now, the Greens and some federal independent parliamentarians, notably Tasmania's Andrew Wilkie and the members of the Central Alliance, have been pushing for such a body.

Archival tape — Richard DiNatale:

“We need a national anti-corruption commission with broad based powers that can call in people to investigate these matters. But instead what we’ve got, we’ve got the closing club.”

MIKE:

So have a lot of very senior and well-respected legal people. And of course, it's very, very popular in terms of public opinion but the major parties have resisted up until the beginning of last year when Labor became the first of the major parties to propose one. Largely I would suggest at the pushing of Mark Dreyfus the shadow Attorney-General it adopted a proposal, quite a strong proposal, into its policy platform. The Coalition however did not follow suit for the better part of a year and then just before the end of last year put up its own model and then took that to the election saying it, like Labor, would support an Integrity Commission so essentially trying to neutralise that particular difference between the two.

ELIZABETH:

So what's the Coalition's idea of what a Commonwealth Integrity Commission would look like?

MIKE:

Well the Coalition proposal comes in two parts: one arm of which would slightly extend the scope of an existing body, the Australian Commission for Law Enforcement Integrity which as its name indicates basically deals with with law enforcement agencies but possibly a few others.

The second arm though, as proposed by the government, would be far more limited in its powers and that's the arm that would cover politicians and their staff, commonwealth public servants and contractors to the government and it would be very constrained; it would not, first of all, be able to hold public hearings, it would not be able to initiate its own inquiries, it would not be able to act on tip-offs from whistleblowers or from the public. It would act only on the instruction of agency heads or the government. It would not be able to seize evidence or conduct surveillance. It would not be able to make findings of corruption only to determine if a case was strong enough for it to be referred to the Commonwealth Director of Public Prosecutions for criminal prosecution. So there's a clear distinction between corrupt behaviour and criminal behaviour and this would only be able to look into potential criminal behaviour.

ELIZABETH:

And would a body like that be effective do you think?

MIKE:

When I was reporting this I spoke to Stephen Charles AO QC, former justice of the Victorian Supreme Court and one of the leading experts in this murky area going back some 30 years, and he said what the Federal Government is proposing would actually be worse than nothing because it would allow them to deflect criticism that they were you know that they weren't acting and say see we have a body while the body itself was largely impotent.

New research was provided to me from the Centre for Public Integrity which compared the powers of the various state and territory anti-corruption bodies. It found, for example, that NSW and Queensland came out the best, Victoria, Tasmania and South Australia were the weakest but the model being proposed by the Attorney-General, Christian Porter, and by Scott Morrison they found was weaker than any of them.

For example, the recent allegations of corruption relating to Crown Casino wouldn't be able to be investigated. The investigation that took place into the activities of Eddie Obeid wouldn't be able to be investigated because those were initiated by a public tip-off, a lot of the Crown Casino stuff came from whistleblowers. Those are specifically prohibited under the Porter model so they wouldn't get past square one.

ELIZABETH:

And it would be an anti-corruption body and that can't make findings of corruption.

MIKE:

Yes, I know it seems silly but that's essentially true.

ELIZABETH:

And basically the foundation of this proposal is that something would have to be known to be illegal before it could be investigated?

MIKE:

Possibly not known but reasonably suspected to be illegal before it could be prosecuted.

Which kind of makes you wonder what it's there for, because surely that's the purpose of having such a body is to find out what misdeeds have been done. So, you know, if you already know that it's wrong it could be prosecuted right now, if you already knew it was illegal.

We have to remember here that these laws are passed by the same people who would be being investigated. So the loopholes are there to some extent by design because there is a symbiotic relationship here between donors and political parties. And it's not in the interests, particularly I would suggest, of conservative parties because they're the ones who rely on corporate donations more than the other parties. There's a strong interest on their part not to do anything that would close off that pipeline of money.

ELIZABETH:

And what would an effective Federal Integrity Commission actually investigate?

MIKE:

Well Stephen Charles, he gave a very strong speech in Brisbane a couple of weeks ago in which he enumerated a number of areas that a federal body might be interested in looking into.

Such as, for example, Australia's recent submarine contracts which appear on the face of them to have been extraordinarily expensive, allegations of systematic fraud in the Defence Department, some dubious closed tenders for lucrative contracts related to offshore detention, the misuse of the entitlements of members and senators. And this is this is a pertinent one at the moment: the movement of ministers and senior bureaucrats from government into the private sector where they leverage their knowledge and their contacts for post politics employment. You know you could add a few more, I would add for example, Australia's spying on East Timor where under the guise of an aid project, we bugged their parliamentary offices. And in that case of course, so far Christian Porter has shown interest only in prosecuting those who blew the whistle on the government's illegal actions.

ELIZABETH:

And where's Porter's proposal at the moment?

MIKE:

Well it's, it's sort of disappeared into a black hole. The model was put out at the end of last year. It was promised during the election that something would happen this year. A little money was allocated in the budget but so far we've seen no legislation. We've seen as consultation process that has gone nowhere and there's nothing on the legislative agenda for this year.

ELIZABETH:

So this proposal which, you know, as you've laid out, is deficient... even that is off the table as far as we can see through 2020.

MIKE:

At this stage, yep that's right. The federal sphere still has no anti-corruption body and is not likely to get one anytime soon if this government has its way.

ELIZABETH:

Mike, on Monday a Greens bill that proposes a stronger anti-corruption body passed the Senate. What's likely to happen next with that?

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MIKE:

The Greens have proposed a much stronger model, much more along the lines of the NSW body. They have actually put a piece of legislation to the Senate, had the support of Labor, had the support of most of the cross bench and it has passed and will now go back to the House which will really put the weights on the government to either agree to it or to be seen to be in support of a much weaker alternative.

ELIZABETH:

But it's not likely to pass, surely the House?

MIKE:

Highly unlikely to pass the House, I would suggest. I hope to be proven wrong.

ELIZABETH:

I love an episode that ends with ‘I hope to be proven wrong.’

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ELIZABETH:

Elsewhere in the news:

Former treasury secretary Ken Henry has launched an extraordinary attack on government policy, saying that for a decade Australia has been held back by poor infrastructure, failings on housing and productivity, and environmental degradation. He blamed a government that claimed to fix problems which were actually getting worse, and said, quote, "the advice of experts has been ridiculed by politicians interested only in their own personal advancement".

And in the UK, Parliament has been prorogued just as prime minister Boris Johnson lost another vote seeking an early election. Johnson was hoping an election could be called before Brexit. It’s the sixth vote that he has lost in six days.

This is 7am. I’m Elizabeth Kulas. See you Thursday.

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