Is the ICAC Too Inscrutable For The Public Good?

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The shooting death of Michael McGurk earlier this month triggered a media frenzy about property related corruption which has outlasted denials from all 70 NSW Labor MPs that they had any dealings with the slain standover man.

"Donor developers" — those property developers who are significant contributors to the Labor Party’s slush funds — are the dominant political corruption issue of the moment in NSW.

Making declared donations to political parties is a perfectly legal activity in NSW but after 14 years in power at state level, the Labor Party has made an art form out of slush funding, outspending their hapless opponents three to one at the last election, with a fair bit left over for federal campaigns.

For years now, property developers and the construction industry have been giving more to the party than its receipts from capitation fees and other donations from its affiliated trade union base. The NSW Labor Party raises more money from its donor supporters than the party’s national secretariat or any other branch — even Queensland with its Labor Enterprises investment entity.

Concerns about the influence of donor developers on planning decisions in NSW have been raised in parliament and by formal letters of complaint to the Independent Commission Against Corruption (ICAC). These formal complaints followed the ICAC’s efforts to expose corruption at Wollongong City Council last year. Courageous council staff made protected disclosures to the ICAC on which it could use its phone tap and video surveillance powers to expose what we now know to be the operations of a "Table of Knowledge" network at Wollongong. The facetious agenda at the Table of Knowledge was to "advance Wollongong into tomorrow". We’re currently awaiting decisions by the Director of Public Prosecutions on briefs of evidence provided through the ICAC Wollongong investigation.

And the big question arising from this is: Is there a Table of Knowledge operating around Macquarie Street? I suspect there is. If not physically like Wollongong then virtually, through networks. I think I know who we’d find sitting around it. But I have no probative evidence … at this stage.

In spite of the regular allegations about developer donations during the Planning Department Part 3A assessment processes — those which give major development projects the go-ahead — the ICAC to this point has not announced a formal reference whereby it advises the public by newspaper notice that it is embarking on a public inquiry. There have been no search warrant raids as part of any preliminary investigation. Maybe they are looking at it. We don’t know.

There is a developing debate about the ICAC’s inscrutability. Under its legislation, the ICAC can choose to neither confirm nor deny if it is investigating any matter. This policy could be applied for good and valid operational reasons. Why reveal to your corruption targets that you are on their tails?

But after my experience covering both the Fitzgerald and Wood corruption inquiries, it must be said that openness with the public about what you are doing and why is the best policy. The anti-corruption body should engage the public directly in its efforts. The public can be your eyes and ears if you win public trust.

Recently my program posted on its website an exchange of correspondence between the Greens MLC Sylvia Hale and the ICAC in 2008 which canvasses the ICAC assessment panel’s decision not to investigate the pattern of donor developer activity. (It is interesting to note that the NSW Greens have been doing the heavy lifting on developer donations, not the Liberals. Why is that?)

The letter was a considered gathering of evidentiary leads by Hale’s professional researcher — including a database analysis matching the dates of donations with the progress of developer DAs through the Department of Planning’s processes. It also detailed other evidence of questionable behaviour in the planning process. You can read Hale’s 12 items with their substantiation on the Stateline NSW website and make your own assessment.

In an ‘In Confidence’ response on 3 September 2008 the ICAC Commissioner Jerrold Cripps QC said inter alia:

"The ICAC does not investigate all matters received and, even if a matter involves corrupt conduct, the ICAC Act requires the ICAC to focus its attention on serious and systemic corrupt conduct.

"Your matter has been carefully considered by the ICAC’s Assessment Panel. The Assessment Panel is a committee made up of senior ICAC officers, and it responsible for determining what action the ICAC should take on each matter received. The Assessment Panel has determined that these matters will not be investigated.

"In making its decision, the Assessment Panel took into account a number of issues, including that there is no clear indication that the matters involve corrupt conduct. The allegation that these donations have led to corrupt decision making is based on mistrust of the system and suspicion of wrong doing. You have identified instances where donations have been followed by approval, but there is no indication that this is the result of corrupt conduct. Your attention to reporting this matter to the ICAC is appreciated."

The ICAC has been in existence for 20 years in this jurisdiction. I think its continued existence is imperative. It has done some solid work. In spite of the fact that its early failure to expose systemic police corruption — for which it was arguably set up — in the early to mid-1990s, required the establishment of a separate Police Integrity Commission (after the Wood Royal Commission), we need the ICAC. Like the Crime and Misconduct Commission in Queensland, it is a necessary external oversight on public administration.

We urgently need a similar independent external body federally. Look at the billions spent on defence contracts each year — and God knows what’s happening with all those billions of borrowed stimulus monies. Ken Henry would be reassured if he knew that whistleblowers and protected disclosures could help him — via a Commonwealth Commission Against Corruption — nail the rorts and kickbacks that would inevitably follow such a heavy spend. We are asked to believe that there is no corruption federally. I don’t think so.

After the McGurk shooting, Sydney buzzed with talk of the alleged existence of a tape implicating Labor figures. It may all be bullshit concocted as leverage in interpersonal disputes. We don’t know. But it is interesting to note that during the frenzy, the ICAC issued a statement saying that it had spoken to the police and it was making a "preliminary investigation".

I find it passing strange that the body established to investigate and expose corruption in this jurisdiction and to educate public officials and the public about corruption risk has issued no public statement to answer clear public concerns about the activity pattern of donor developers above the local government level in NSW. Under its discretionary powers it would be entitled to do so. And in the absence of such reassurance it falls to the media and committed journalists to work away on this story.

This is an edited excerpt from a speech delivered to the Corruption Prevention Network Conference on 9 September 2009.

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