corruption, pork-barrelling and abuses of power

Written by Yee-Fui Ng, Associate Professor, Faculty of Law, Monash University

The question of how best to eliminate corruption has exercised the minds of philosophers as much as the practical drafters of legislation from Ancient Greek and Roman times.

Within the political sphere, the notion of “corruption” has fluctuated between broad and narrow conceptions.

The broad conception relates to the decay of institutions or of the stature of the individuals who comprise them. On the other hand, the narrow conception focuses on the abuse of public office for private gain.

There is also “grey corruption” – which involves questionable behaviour involving a breach of integrity standards that does not necessarily amount to criminal conduct.

This could include where a person has undue influence over a politician, such as by essentially buying that power through making large donations or hiring expensive lobbyists, particularly where it causes public officials to behave in corrupt ways. However the notion is defined, it is clear the fight against corruption is one of the basic tasks of a liberal democracy, perhaps even of an effectively functioning civil society. Corruption control is a pressing issue worldwide: the United Nations estimated the economic cost of corruption at 5% of global domestic product or $3.6 trillion annually. Australia has had a number of major corruption scandals throughout its history. Corruption was rife in the colonial era, where wealthy landholders sought to influence parliamentarians with monetary bribes. This has been followed by several major corruption scandals, such as the Fitzgerald inquiry, which revealed widespread police corruption involving illegal gambling and prostitution. What are anti-corruption commissions? Anti-corruption commissions are arguably the most significant tool developed in liberal democracies to fight corruption in recent times. The first anti-corruption commission in Australia, the Independent Commission Against Corruption (ICAC), was established in New South Wales in 1988 by then premier Nick Greiner. Infamously, a few years later, Greiner became the first premier to resign due to an ICAC investigation. Over the next few decades, all states and territories have set up their own anti-corruption or integrity commissions. In 2023, the Commonwealth followed suit with the introduction of the National Anti-Corruption Commission (NACC), a promise made by Anthony Albanese in the lead-up to the 2022 election after considerable pressure from the public and from within parliament. As a result, Australia now has a comprehensive network of broad-based public sector anti-corruption agencies covering all levels of government – a significant development nationally and internationally. Anti-corruption commissions are tasked with investigating serious and systemic corrupt conduct in government. This includes not just members of the House and Senate, but their staff and public servants. In performing their functions, these commissions have strong coercive powers, equivalent to the powers of a royal commission. This includes the power to compel documents and witnesses. Some anti-corruption commissions such as the NACC and NSW’s ICAC have the power to conduct public hearings if they believe it’s in the public interest. This increases transparency in government. But concerns have been expressed about reputational damage for those subject to investigations. Anti-corruption commissions also have corruption prevention functions. They are tasked with educating the public about the detrimental effects of corruption on public administration. Reports of anti-corruption commissions are often attended by significant media publicity, leading to public awareness of corruption in government. Why are anti-corruption commissions needed? It has become well accepted that effective anti-corruption institutions play an important role as institutions supporting constitutional democracy. The state anti-corruption bodies have brought to light many indiscretions by politicians that would have otherwise remained hidden. Without these commissions, corruption in the public sector can take root without us knowing about it. An anti-corruption agency is a powerful deterrent against improper behaviour. Yet anti-corruption commissions tend to be unpopular within governments because they scrutinise government action. This means the a commission may expose improper conduct or corruption within their ranks. It is common for governments hostile to anti-corruption commissions to attack them, including by reducing their powers or funding. This is despite their integral role in our democracy. Alongside other oversight bodies such as the ombudsman (who investigates maladministration within government) and auditor-general (who performs audits of government expenditure), anti-corruption commissions form part of an intricate, interlocking integrity framework that monitors executive action. Who watches the watchdogs? A big question is about how we ensure anti-corruption commissions do not overstep their bounds. Given their broad coercive powers, how do we hold them to account? From their inception, concerns have been expressed about the potential for anti-corruption bodies to infringe on civil liberties, and the possibility they may exceed or abuse their powers. In Australia, anti-corruption commissions are subject to a strong system of accountability through parliaments and the courts. They report to dedicated parliamentary committees who scrutinise their actions and decisions. Complaints against anti-corruption commissions can be made to a dedicated inspectorate – an independent statutory officer who oversees their actions. Anti-corruption commissions are also subject to judicial review by the courts to ensure they don’t exceed their legal boundaries. Court scrutiny occurs when a person investigated by an anti-corruption commission takes their grievance to court. To be effective, anti-corruption commissions require strong powers and institutional independence. But this needs to be balanced with accountability and the protection of individual rights. What is pork barrelling and what are some recent examples? Pork barrelling involves governments channelling public funds to seats they hold or seats they would like to win from an opponent, as a way of winning voters’ favour. This means the money is used for political purposes, rather than proper allocation according to merit. We have been inundated with pork barrelling scandals in recent years. This includes the car park rorts scandal, where 77% of the commuter car park sites selected were in electorates held by the then Coalition government, rather than in areas of real need with congestion issues. This followed close on the heels of the “sports rorts” scandal. Minister Bridget McKenzie resigned from cabinet following allegations she had intervened in the sport grants program to benefit the Coalition government while in a position of conflict of interest. My research has shown that pork barrelling is an intractable problem across multiple governments over many decades. It takes different forms based on electoral systems. Australia has a single member electorate parliamentary system, which makes it more susceptible to pork barrelling than multi-member electorates such as Norway or Spain. The belief is that politicians who “bring home the bacon” for their constituents are electorally rewarded for doing so. This means there are incentives for the central cabinet to strategically apportion benefits to marginal electorates to increase prospects of electoral success. There is also an incentive to bias the apportionment of funds towards the party in power. In short, rorts scandals keep happening because governments believe that channelling money to marginal and government electorates will win them elections. Potentially the NACC could investigate rorts scandals, but only where it amounts to serious or systemic corrupt conduct. How do we fix the grants system? At the federal level, we have sophisticated financial management legislation that provides a framework for grant rules. The Commonwealth grant rules provide a detailed set of guidelines that ministers and government officials must follow on grant application and selection processes. However, there are significant loopholes in the rules. For example, the “car park rorts” scandal is not covered by these rules because it involves money being channelled through the states. Also, there are no sanctions for breaching the rules. So ministers and government officials can break the rules without any repercussions. To fix the system, we need to reform the rules about grants allocation and close the loopholes. We also need to impose punishment for breaching the rules. It is imperative our grants administration system be reformed to ensure that taxpayer funds are protected from governmental abuse. If the ministerial discretion available in grants processes is improperly used, this can give rise to political favouritism and corruption. How corrupt is Australia compared to other countries? There is a public perception that a small elite is reaping large benefits in Australian society in terms of political influence and its flow-on dividends. In Australia, the “game of mates” is flourishing. There’s now a revolving door in politics with many politicians, advisers and senior government officials leaving the public sector to become well-paid lobbyists. Add to that the appointments of political “mates” to commissions, tribunals and cushy ambassadorships and the blatant misuse of parliamentary entitlements such as helicopter trips on taxpayer funds. Political parties are also accepting millions of dollars in donations from lobbyists and others interested in influencing policy outcomes. All of this adds to the perception that the system is rigged - and not in favour of the person on the street. Australia has fallen steadily in Transparency International’s global corruption index, from 8th place in 2012 to 14th in 2024. But even so, Australia is the 14th-least corrupt country in the world, which is still a respectable ranking. More alarming is the fact that one in 30 Australian public servants said in a survey last year they had seen a colleague acting in a corrupt manner. The types of corruption witnessed included cronyism or nepotism (favourable treatment of friends or family members without proper regard to merit). Fraud, forgery, embezzlement and conflicts of interest were also reported. In the 1980s, there were incidences of large-scale corruption that rocked the country, culminating in the Fitzgerald Inquiry in Queensland and the WA Inc Royal Commission in Western Australia. These scandals led to the resignations and imprisonments of various former ministers and officials. Although we have not sunk to such depths since then, state anti-corruption commissions, such as the NSW ICAC, have uncovered various instances of corruption in recent years. The NSW ICAC’s inquiries have led to the resignations of several politicians, as well as the conviction of former Labor MP Eric Obeid. Another classic case of corruption exposed by the ICAC led to the downfall of former Newcastle lord mayor, Jeff McCloy. McCloy famously bragged that politicians treated him like a “walking ATM” and admitted to giving two MPs envelopes of cash amounting to $10,000. In Victoria, the Independent Broad-Based Anti-Corruption Commission’s (IBAC) revealed that a lobbyist funnelled suitcases of cash totalling more than $100,000 from a property developer to a councillor, under the guise of sham transactions. These explosive scandals involving corrupt conduct by public officials have eroded public trust in politicians. But the exposure of these scandals by anti-corruption commissions have an important deterrent and educative effect on public officials and the broader public. Our faith in government has been eroded by a lack of transparency and the perception that those in power are enjoying unfair benefits. The active investigations by robust institutions such as anti-corruption commissions will act as checks and balances on governmental power - and are key to a vibrant democracy. This is an edited extract from How Australian Democracy Works, a new book from leading authors at The Conversation on all aspects of our political system and its history, out March 4.

Authors: Yee-Fui Ng, Associate Professor, Faculty of Law, Monash University

corruption, pork-barrelling and abuses of power

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