When it’s ‘lawful but awful’: an integrity commission for rich Australia

Attorney-general Mark Dreyfus spoke last week about a commonwealth integrity commission. One of the issues that will face such a commission is whether pork barrelling will come under its purview.

Politicians have long allocated grants and funding mechanisms that, they would argue, are in the public interest and which critics would argue are merely vote-buying ploys. Both major sides of politics have been complicit.

Many examples of pork barrelling came to light during the term of the Morrison government, relating to grants and also to procurement activities. Politicians have claimed this as ‘politics as usual’, and the former PM said that he would not want a kangaroo court (meaning an independent commission against corruption) making judgements on things politicians know best about. 

Maybe he said that because breaches of process were found in several Morrison government matters.

In the sports rorts matter, the auditor-general concluded grant funding was “not informed by an appropriate assessment process and sound advice” and that successful applications “were not those that had been assessed in terms of the publishing program guidelines”.

Reporting on a $650 million exercise in the procurement of car parks, the auditor-general found “no competitive selection process, no formal guidelines and no formal call for submissions”.

Questionable procurement exercises that did not deliver value for money and which may have had some political connection were also examined by the auditor-general, including a land purchase near Sydney airport, a $420 million contract for an offshore refugee processing services; and a buyback of water licences from Eastern Australian Agriculture, a company of which a minister was once a director but from which he resigned upon entering parliament. 

The sort of corruption we see in rich countries like Australia is not the brown paper bags filled with dollars (well, not usually) nor low-level officials shaking down members of the general public. It is characterised by trading in influence, making connections for a fee, using wealth to gain access and multiply that wealth and sharing the spoils (contracts, and favourable laws). It all works within the system and is lawful, but as many have observed ‘lawful but awful’.

Those who study corruption often use an analysis that focuses on principals and agents. The principals make the laws and the rules, and the agents — politicians and public servants — carry them out.

In rich democratic societies, we work on the assumption that the principals are principled, and if things go wrong the agents need to be brought to task. The principals, after all, are put there by the public and reflect broad community will. The twist is that the real principal is the voter, and the politician is the agent, but that delves into deep debates on political philosophy.

Assuming the minister is the principal and the public servant the agent, we have a situation with all our anti-corruption agencies that sees investigations mostly of agents who have done the wrong thing. If you read any of the reports that are publicly available from the NSW ICAC or the Victorian IBAC, there will be clear analyses of the transgressions, the malfeasance of the offender, and the failures of public administration that allowed it to happen.

However, when it comes to principals, there are no standards or guidelines, especially when dealing with matters of procurement or, to put it more bluntly, pork barrelling. Sure, NSW has lost three premiers, but none has had corruption findings against them, and none involved procurement.

In the cases above and explored by the auditor-general, the procurement involved using grant money to further a politician’s political advantage. This is neither illegal nor criminal. As the auditor-general found, processes were not followed, but to make a ruling on criminality or corruption is beyond the jurisdiction of the auditor. There may not be criminality, but this is why a new commonwealth integrity commission must have a remit that goes beyond criminal events.

When an agent does not meet standards of integrity, there are clear responses. An investigation by an anti-corruption agency can lead to the tightening of procedures, the bringing of criminal charges, or the re-orienting of culture in a department and different methods of guidance, management and control.

However, when it is the principal who is delinquent, there is little remedy. The common answer offered by politicians is first: to deny that there is any wrongdoing, second: to say that this is the way politics has always been played, third: to say this is politically motivated and a smear by political opponents, and finally: if people don’t like it, they can vote me out at the next election.

And this is what happened. But that is not sufficient for a way forward for a country like Australia.

Author: Adam Graycar, Director of The Stretton Institute, The University of Adelaide

This article was first published in The Mandarin on 16 June 2022.