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Footy, coffee and corruption: the Victorian disease

To steal a line, there’s something rotten in the state of Victoria. It has a serious problem with corruption, and may find itself ill-equipped to fight it. This might come as a surprise to Victorians…

Victorian premier Denis Napthine may need to expedite reform to the state’s anti-corruption practices if a recent ombudsman’s report is any guide. AAP/Joe Castro

To steal a line, there’s something rotten in the state of Victoria. It has a serious problem with corruption, and may find itself ill-equipped to fight it.

This might come as a surprise to Victorians, who have often looked down their noses at the questionable activities taking place elsewhere (for example, in police forces and governments in New South Wales and Queensland). But it is true, and increasingly difficult to deny.

Victoria Police has found members engaged in misconduct of their own volition (disbanding units like the Drug Squad and Armed Offenders Squad for problems ranging from ill discipline to corruption including drug trafficking). More recently, they have admitted large-scale leaks and discovered efforts to infiltrate their ranks and corrupt their officers.

And the Victorian government has not been immune from accusations of improper behaviour, either, as the Baillieu/Napthine Coalition administration has discovered on multiple occasions (see events involving MP Geoff Shaw, or Tristan Weston and Tony Nutt).

To make matters worse, the legislative architecture for investigating corruption in Victoria has serious shortcomings. Aspects of it may even be unconstitutional.

Does Victoria have the institutional wherewithal not just to inspect allegations of minor misconduct, but also to conduct investigations of more grand accusations, such as those levelled at former NSW Labor powerbroker Eddie Obeid? Unanswered questions about the state’s integrity system, along with problems reiterated by the Victorian Ombudsman, give genuine cause for concern.

Debate about integrity reform in Victoria

Since its inception in late 2011, criticism about the legislation that established Victoria’s Independent Broad-based Anti-corruption Commission (IBAC) has been aired publicly on a regular basis from a range of experts. Concerns include the very high evidentiary threshold required for IBAC to conduct investigations, and the fact that IBAC is restricted to investigating “serious” corruption (even though what qualifies as “serious” is not defined).

In late 2012, shortly after penning a letter to then-premier Ted Baillieu, the Ombudsman released a report to Victorian state parliament on the legislation that established the new integrity system. Neither the letter nor the report were optimistic. Part 1 of the Ombudsman’s 2012-13 annual report, tabled in parliament, remains openly critical of the legislation, stating that it is “clumsy and presents operational problems for all concerned”.

The report also warns that the restriction of corruption investigations to “serious” corruption ignores the sorts of cases that create the bulk of the Ombudsman’s more significant work and investigations. The sort of problems with corrupt organisational cultures alleged to be troubling Customs, for example, are a common and substantial problem in when it comes to anti-corruption regimes. However, they would not necessarily be considered “serious” corruption in the context of Victorian legislation. And the problem is more complex than just restricting investigations to serious corruption.

The hole in the system

There is a substantial gap between the kinds of cases that IBAC and the Ombudsman can investigate at will. According to the Independent Broad-based Anti-corruption Commission Amendment (Investigative Functions) Act (2012), IBAC “must not” investigate a case unless it is “reasonably satisfied that the conduct is serious corrupt conduct” (the high evidentiary threshold which experts fear will leave the body open to jurisdictional challenges).

However, the Integrity and Accountability Legislation Amendment Bill (2012) amended the Ombudsman Act (1973) to state that the Ombudsman “must not conduct an own motion investigation into any administrative action that appears to involve corrupt conduct.”

The result is that while IBAC can only investigate cases where there is clear and “serious” corruption, the Ombudsman is now prohibited by law from starting an investigation into anything that bears even a whiff of corruption of any kind. There’s a pretty big gap in between the two.

There is an argument that says this gap isn’t a problem, because IBAC will work as a clearing house for complaints and, once someone refers a matter to IBAC, IBAC can pass it to the Ombudsman, who can investigate matters involving corruption if they are referred to the Ombudsman by IBAC.

While this doesn’t address the fact that there will be many cases of misconduct or corrupt conduct that neither IBAC nor the Ombudsman will be allowed to proactively investigate (a fundamental feature of effective investigative bodies around the world), it at least means that no complaints will fall between the cracks, right? Not exactly.

Time is of the essence

Consider the case of MP Geoff Shaw and the allegations that he used his parliamentary vehicle for commercial use. The Ombudsman received a complaint about Shaw in June 2012, began an investigation and presented a report on the matter in around four months.

Despite a report into the conduct of MP Geoff Shaw having been completed by the ombudsman last year, no action has been taken by the parliamentary privileges committee. AAP/Julian Smith

On that report’s recommendation, the matter was referred to the Victorian parliament’s Privileges Committee. It’s approaching 11 months since that recommendation and there’s still no finding from the committee, which now has its third chair after its first, Denis Napthine, became premier in March and its second, Andrew McIntosh, resigned his position in April after admitting to “unacceptable” conduct.

Suppose the Ombudsman’s office received a similar complaint today. Before investigating, it would have to first consider whether the matter “appears to involve corrupt conduct” and, if so, refer it to the IBAC. IBAC would then need to consider whether or not the case meets its high evidentiary threshold. If not, IBAC would refer the matter back to the Ombudsman.

So what’s the difference if the Ombudsman ultimately still gets to investigate the complaint? Such investigations often hinge on the extent to which events are still fresh in the minds of parties involved. Delays frustrate the chances of a proper and full investigation, making it less likely a report would compel further action.

Matters that can’t be reported, and the big fish that can get away

The idea of having the Ombudsman investigate matters referred to it by IBAC may be fine in principle, but in practice new restrictions on the Ombudsman’s powers introduced by the proscriptive amendments in late 2012 may create additional problems and frustrate investigation. For example, the Ombudsman is now prohibited from reporting on Cabinet information: this could include cabinet documents and even notes to ministers from advisers.

Similarly, in a parliamentary report released last in May on an investigation into alleged improper conduct by a registrar of the Magistrates' Court, the Ombudsman notes that such an investigation would be unlikely to be able to be reported (by any of Victoria’s integrity bodies) had the allegations been made under the current legislation. The ability to publicly report on such findings is fundamental to a transparent and effective integrity system.

Victoria Police has had to deal with corruption its ranks in the past. AAP/Julian Smith

But forget about Magistrates' Court registrars and MPs with government cars. Victoria’s watchdogs would be able to tackle really big cases of corruption, wouldn’t they? If an investigation like recently concluded ICAC inquiry into the Obeid saga in NSW were required south of the border, for example? Not according to Stephen Charles, QC, who chaired the Victorian government’s advisory panel on IBAC. He feels the evidentiary requirements and related problems are such that it is unlikely that IBAC would be able to investigate even an allegation as serious as this.

Possible patches, but bigger problems

Small changes could help fill the gap between the kinds of cases each body can investigate, and reduce the prospect of the kinds of jurisdictional challenges that experts are concerned about.

For example, change the wording of the Independent Broad-based Anti-Corruption Commission Act (2011) to state that the body must not commence (rather than conduct) investigation unless reasonably satisfied that serious corruption took place.

In addition, allow the Ombudsman to commence investigations or respond to any and all complaints except when the matter involves serious corruption (rather than prohibiting them from investigating unless they are sure it doesn’t involve serious corruption), with the requirement that if, in the conduct of an investigation, the Ombudsman becomes reasonably satisfied that serious corruption took place, they must then notify IBAC.

This would help avoid delays, allowing the Ombudsman to start investigating in response to complaints while notifying IBAC if and when appropriate, and having IBAC take over if and when it decides that it should do so. This would allow prompt and appropriate commencement of investigation, but would still ensure that matters were ultimately referred to the desired bodies (though it still wouldn’t address the absence of a definition of “serious” corruption, or the challenges in even trying to establish such a definition).

Even if changes like this were made, however, one of the remaining unanswered questions in the Ombudsman’s 2012 report is about a broader problem. That report warned that the restrictions on the independence of the Ombudsman’s office may render sections of the Victoria’s integrity unit unconstitutional (given that the office’s independence is constitutionally enshrined) - a concern which has not since been addressed and which is restated in yesterday’s annual report.

If the constitutionality of sections of this legislation can be challenged, that threatens to compromise the very system it has established.

Join the conversation

11 Comments sorted by

  1. Michael Shand

    Software Tester

    Brilliant Article, the corruption is rife in victoria, these people do not represent us, they have no interest in representing us, they represent their donors, big business and groups like APPEA

    1. Earl Downing

      Age Pensioner

      In reply to Michael Shand

      For 22 years I have been writing to Politicians, Workcover, Lawyers, Newspapers and Police about the conditions at a Melbourne paper mill where anything goes as far as treatment of it's employees and contractors, even attempted rape that was quietly hushed up with a well placed bribe to police, threats of the sack, verbal abuse of the foulest kind, sweat shop slave labour and bribery of public officials were the order of the day. My accusations that Dick Pratt bribed my barrister at a Workcover…

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    2. Michael Shand

      Software Tester

      In reply to Earl Downing

      That's a horrific storey Earl but credit to you for not just letting it slide.

      I strongly believe we get the government we deserve and most people in society just want to live ignorant sheltered lives, most people would of just moved on and kept their mouth shut - and by the sounds of it they have.

      Betrand Russel said that most people would rather die than think and that most people do

  2. Terry Reynolds

    Financial and political strategist

    There is corruption in Victoria especially amongst banks and insolvency practitioners who banks pay far too well to do the bank's dirty work at the expense of the public.

    Police regard white colour crime as "victimless" but when you get a case like Opes Prime in Melbourne, where its directors knew it was insolvent and co-operated with the ANZ Bank who it owed $650 m to change the existing trust protections and terms of the AMSLA against Opes Prime Investors to protect the ANZ Bank instead, and…

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  3. Stephen McDonough

    Business Process Analyst

    Regulatory authorities need a legislative framework that gives them appropriate authority and powers to do their jobs, and a requirement for timely reporting on activities to allow for transparency and accountability over their activites.

    When properly implemented, the latter allows a greater degree of comfort with the former. Otherwise you wind up with toothless entities that are a drain on public resources and are filled with people who want to do good, but are continually hamstrung and frustrated.

  4. Terry J Wall
    Terry J Wall is a Friend of The Conversation.

    Still Learning at University of Life

    More articles like this will eventually rip enough scabs off to get the healing started. I live in NSW and I thought this was the capital of corruption; perhaps as unique as I thought!

    It truly a debilitating disease that eventually trickles down to every individual in society; from road builders, customs, government, taxation, public servant salaries/ pensions, sports club medicine, gambling, local body management, privacy, banking, executive bonuses, the electoral system, religion, unions…

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    1. Terry Reynolds

      Financial and political strategist

      In reply to Terry J Wall

      Terry Wall, there is corruption in Victoria but Victorians traditionally act swiftly when exposed to end it. One of the problems Melbourne now faces was the former Commissioner of Police reducing the Fraud Squad from 120 to just 40 today. Melbourne's population is booming and recent AS evidence shows almost fifty per cent of all new businesses opened in Australia in the past four years were set up in Melbourne. The AFL came in fast and hard on Essendon and you will find that it is not the culture of the Club that is at fault but perhaps one misguided person adopting the dreadful strategy of "whatever it takes". Essendon will survive this just fine, and the Club and the AFL all the better for stepping in and ending it. We await legal process to take its course.

    2. John Doyle


      In reply to Terry J Wall

      Your idea about lies should also apply to politicians who get off scot free over lies they tell to help them win office.
      This is what is so unsavoury about the LNP. They are always telling the same porkys and attempt to get that to stop have it seems not even begun. So now many believe our economy is rotten etc. and the fault of the opponents.
      It is so obvious they lie, is it any wonder lower stratas of society find it OK and do the same.
      In spite of all that our record is far from the worst example.

    3. Michael Shand

      Software Tester

      In reply to Terry Reynolds

      Ummm, injecting exotic substance's is rife in all professional sports and sports teams from baseball to cycling to gymnastics to AFL

      It's not just the doctor, it's not just the coach, it's not just the team, it's not just that particular sport, as soon as there is a group of people making money off whether or not a sports team wins...bring out the needles

    4. Terry Reynolds

      Financial and political strategist

      In reply to Michael Shand

      I sympathise with Earl Dowling, but writing endless letters usually gets you no were Earl because all these large organisations employ a young lawyer whose job it is to send out letters denying everything." When you see large companies get into financial difficulties you invariably see how light weight and inconsequential many of the big name directors you may have read about in the press in the past, really are. They are there to undertake "agency", that is "what can I get out of this company for…

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    5. Michael Shand

      Software Tester

      In reply to Terry Reynolds

      The Goldman Dilemma asks elite athletes if they would take a drug that was legal and they knew would guarantee them success in their sport but would cause them to die after a few years - the study's at the time 1970-1990, about half the athletes interviewed said they would take the drug.

      More recent studies show a change in attitude in athletes where only 6% admitted they would take it and if it was legal but harmless 12% admitted they would take the drug - a lot of people are obviously lying - legal, harmless and they still wouldn't - it's a joke.

      So 6% of top athletes across a range of sports are still prepared to take a drug they know would kill them after a few years but I'm sure that's not the NRL or the AFL

      Sport is no longer a friendly competition, it is big business with multi million dollar contracts on the line, hence corruption ensue's