Senate Committee on National integrity Commission, Government senators not interested in this or political donation reform

 It's not simply that when Quentin Dempster speaks, things happen.

After all The Greens have been on about the need for a Federal anti-corruption commission for years, so too a whole raft of organisations and individuals who don't buy the idea that the government and all its constituent parts and players are unique in the long history of humankind.

So while the commission or some other much needed response that tightens things up at the federal level may still be far off in the distance, yesterday some stirring.

On the motion of Senators Wang and Madison the Senate took two minutes to vote to establish "the Select Committee relating to the establishment of a National Integrity Commission" to report to the Senate by September 2016 with these terms of reference. 

Labor, The Greens and cross bench senators voted for. 

None spoke, if you discount a minor intervention by Greens Senator Siewert. 

But the vote is a welcome confirmation of Labor's current interest, having passed up on the opportunity to act when they were in office and darting and weaving on the subject since.

Government party senators voted against. One, Senator Scott Ryan, Minister for Vocational Skills and Training had one minute for the stock standard government line:

The government has a zero tolerance approach to corruption and is committed to stamping out corruption in all its forms. We have a multifaceted approach to combating corruption. We are always looking at how we can strengthen that, rather than throwing the whole system out based on the presumption that a national anticorruption commission will be more effective. The Australian Commission for Law Enforcement Integrity is responsible for preventing, detecting and investigating serious issues of corruption in federal law enforcement agencies. Furthermore, the Commonwealth Ombudsman performs an important function in investigating and auditing various agencies and functions. The Australian Federal Police also play a fundamental role in investigating serious corruption issues. The government will continue to take a strong approach to tackling corruption in all forms.

DIVISION:AYES 37 (10 majority) NOES 27 PAIRS 6
AYES	NOES	PAIRS
Brown, CL Bullock, JW Cameron, DN Carr, KJ Conroy, SM Dastyari, S Day, RJ Di Natale, R Gallacher, AM Gallagher, KR Hanson-Young, SC Ketter, CR Lambie, J Lazarus, GP Leyonhjelm, DE Lines, S Ludlam, S Ludwig, JW Madigan, JJ Marshall, GM McAllister, J McEwen, A (teller) McKim, NJ McLucas, J Moore, CM Muir, R O'Neill, DM Rhiannon, L Rice, J Siewert, R Simms, RA Singh, LM Sterle, G Wang, Z Waters, LJ Whish-Wilson, PS Xenophon, N	Abetz, E Back, CJ Bernardi, C Bushby, DC (teller) Canavan, MJ Cormann, M Edwards, S Fawcett, DJ Fierravanti-Wells, C Fifield, MP Heffernan, W Johnston, D Lindgren, JM Macdonald, ID McGrath, J McKenzie, B Nash, F O'Sullivan, B Parry, S Payne, MA Reynolds, L Ronaldson, M Ruston, A Ryan, SM Seselja, Z Smith, D Williams, JR	Bilyk, CL Scullion, NG Collins, JMA Birmingham, SJ Peris, N Brandis, GH Polley, H Cash, MC Urquhart, AE Sinodinos, A Wong, P Colbeck,

 Earlier in the day more voices were heard in debate on a Greens urgency motion:

"The need for immediate action on political donations reform, to address the corrupting influence of political donations, including from property developers and fossil fuel companies."

Debate here and there strayed into broader anti-corruption issues and took an hour.

The motion passed without a vote so Senator Seiwert may get a spot higher on the agenda sometime for the substantive issue.

No surprise that Greens senators and crossbenchers Leyonhjelm, Madigan and Lambie are up for action on this front. Senator Rhiannon outlined how the system is broke but Government senators clearly think things are pretty rosy. 

Labor is committed to significant change but some of its speakers seemed glad to change the subject.

Senator Lambie told the Senate of a close encounter with the PM, looking deeply in his eyes, listening to his low deep voice saying.... 

'there's no corruption in federal politics.'

"I recently met the Prime Minister and when I raised the issue of establishing a federal commission against corruption, a federal ICAC, he dismissed the idea by trying to tell me that a federal ICAC was not warranted because there were not many opportunities in federal politics, compared with state politics, for corruption to occur. I almost believed that nice story from our PM—and I mean who wouldn't? As I looked deeply in the PM's eyes, he said with that low deep voice with that nice smile repeat after me : 'There's no corruption in federal politics—only in state politics. There's no corruption in federal politics—only in state politics. I was left with that fuzzywuzzy feeling of hope for a few days after my meeting with the PM that 'there's no corruption in federal politics— only in state politics.'

And then—what do you know?—Veterans Affairs Minister Stuart Roberts was forced to resign; we found out about the rich Chinese businessman having drinks with Liberal Party members and the $10,000 watches that were given out as gifts.

The same sort of thing happened after I wrote to former Liberal PM Abbott asking him effectively whether any people associated with the Liberal Party and mentioned in the Heydon Royal Commission secret reports were corrupt. And PM Tony Abbott wrote back to me, essentially saying that no-one in the Liberal Party was corrupt; and then seven days later we found out the Liberal Party President in Victoria had defrauded their members to the tune of about $1.5 million.

Last year's Roy Morgan Survey of Professions saw 13% rate Federal politicians highly on ethics and honesty.

If every state in Australia has one what's holding back the establishment of a Federal anti-corruption commission?

Quentin Dempster in The Saturday Paper 

The case for a federal ICAC is compelling. With highly skilled forensic accountants, metadata analysts and IT specialists; phone tap, covert surveillance and search warrant powers to gather evidence; and the power to compel attendance at preliminary in-camera interrogation, a federal commission against corruption could start to correct the myth that there is little or no corruption at the Commonwealth level......
Resistance to a federal corruption commission is expected to be intense from within the political parties and the Murdoch press because, as in NSW, its very existence would confront Australia’s corruptible and influence-peddling political and commercial cultures.
Examples of corruption will be fobbed off as “just a few bad apples”. As in NSW, such an investigative body will be likened to a “star chamber” or a Russian show trial. But the need and the benefits are manifest.....
The NSW ICAC, with a budget of $25 million, assesses an annual state public-sector budget of $70 billion. With the Commonwealth’s annual expenditure now running at $434 billion, the case for an adequately funded countermeasure for a culture vulnerable to corruption would seem to be self-evident. 

Important to you?

Join the like-minded such as Transparency International Australia, Accountability Roundtable and others as discussion gets underway about public integrity, anti-corruption measures  and related topics in the context of development of Australia's Open Government Partnership National Action Plan.

Lots of room for your thoughts, ideas, suggestions and observations.
 
Become a member of the Australian Open Government Partnership Network, or tell the Prime Minister's department directly what you think.  

Tl Australia urges inclusion of anti-corruption measures in OGP National Action Plan

"Transparency International Australia is calling on the Australian government to address critical deficiencies in Australia’s anti-corruption laws, as the country falls further on the international Corruption Perceptions Index (CPI) for the third year in a row.

 Today it was revealed that world-wide perceptions of the level of corruption in Australia’s government sector continue to worsen, with Australia’s CPI score falling to 79, down from 85 in 2012, 81 in 2013 and 80 in 2014.

Australia is now ranked 13^th out of the 168 countries included in the Index – down six positions since 2012, and joining countries like Libya, Brazil, Spain and Turkey as big decliners over that period.

The annual Index compiled by Transparency International uses 12 surveys of expert assessment and views of business people globally. The highest ranked country is Denmark with a score of 91.

TI Australia’s incoming chairman The Hon. Anthony Whealy QC described the continued slide as “the result of inaction from successive governments who have failed to address weaknesses in Australia’s laws and legal processes.

“The delay in responding to these issues has now made reform critical and a commitment to ramp up efforts to tackle foreign bribery, which has particularly impacted perceptions of Australia, is now urgent.”

As a priority action, Mr Whealy and new TI Australia CEO, Phil Newman, are calling on the Australian Government to commit to enacting long overdue reforms to Australia’s foreign bribery laws before the end of 2016, as a crucial indicator of the country’s seriousness in fighting corruption.

“With Australia’s worst foreign bribery offences having been committed by former or current government-owned entities – the Australian Wheat Board, Note Printing Australia and Securency Limited – there is no excuse not to have implemented all of the OECD’s reform recommendations in this area by the end of the year,” Mr Newman said.

“TI Australia welcomes the Turnbull Government’s move to develop a national Open Government action plan in 2016, and looks forward to working with it on the many issues that must be addressed if we are to improve our corruption perception score and regain leadership on anti-corruption.”

Other key actions identified by TI Australia for arresting the slide in Australia’s global position include:

• A stronger, broad-based federal anti-corruption agency
• Reformed, more consistent anti-corruption and political finance regimes across Australia’s State, Territory and Federal governments
• Strengthening Australia’s anti-money laundering regime and enforcement to ensure public regulators, and key industries like finance and real estate, are not compromised by the flow of dirty money from overseas.

“TI Australia stands ready to work alongside the government and other organisations to improve our anti-corruption measures and uphold Australia’s commitments in this area internationally,” Mr Whealy concluded.

The full Corruption Perceptions Index ranking and regional tables can be found at: www.transparency.org/cpi

..................................................................................

If you are interested in the Open Government action plan, see the Department of Prime Minister and Cabinet materials.
 
And get involved with the Australian Open Government Partnership Network, an independent coalition of individuals and organisations like TI Australia, formed for the purpose of engaging with government in this process.

G20 Anti-Corruption statement includes open data and public contracting principles

 From the G20 Leaders Communique, Turkey 15-16 November:

16.In support of our growth and resilience agenda, we remain committed to building a global culture of intolerance towards corruption through effectively implementing the 2015-2016 G20 Anti-Corruption Action Plan. We endorse the G20 High-Level Principles on Integrity and Transparency in the Private Sector which will help our companies comply with global standards on ethics and anti-corruption. Ensuring the integrity and transparency of our public sectors is essential. In this regard, we endorse the G20 Anti-Corruption Open Data Principles and the G20 Principles for Promoting Integrity in Public Procurement, and we welcome the ongoing work on asset disclosure frameworks. We will further work to strengthen international cooperation, including where appropriate and consistent with domestic legal systems, on civil and administrative procedures, as an important tool to effectively combat bribery and to support asset recovery and the denial of safe haven to corrupt officials and those who corrupt them. We welcome the publication of our Implementation Plans on beneficial ownership transparency and will continue our efforts in this regard.

The Agreed Documents that accompany the Communique include

• G20 High-Level Principles on Private Sector Transparency and Integrity
• G20 Principles for Promoting Integrity in Public Procurement (no link)
• G20 Anti-Corruption Open Data Principles  

Lax rules boost risk of organised crime snaring government contract

From The Conversation

Louis de Koker, Deakin University and Kayne Harwood, Deakin University

Four Corners this week revealed more about how criminals may be able to access political favour via political donations in Australia, but that is only part of the picture.

New research suggests more work needs to be done to prevent criminals from subverting government procurement processes and funding their illegal activities by winning tenders to supply goods and services to the government.

How to make crime pay 

There are many ways for a criminal to secure a tender. He may receive favourable treatment at the tendering process after a generous political party donation. She may bribe or intimidate a politician or procurement official. Procurement officials may award the contract to a business not knowing that it is controlled by criminals. Criminals may, of course, also gain such control of a supplier after the contract is awarded.

The risk of criminals controlling businesses is real. The Australian Crime Commission’s May 2015 Organised Crime in Australia report identified the abuse of legitimate business structures as one of the key enablers of organised crime in Australia.

Sole proprietorships, companies and trusts are, for example, used to hide who owns and controls a firm. Such business structures can also be abused to fund crime and and launder the proceeds of crime – or even facilitate terrorist financing. The US Special Inspector General for Afghanistan Reconstruction investigated US Army procurement practices in Afghanistan and found more than US$150 million in contracts had been awarded to companies with ties to terrorists.

In an effort to disrupt the money flows of criminals and terrorists, governments worldwide have adopted laws based on standards set by the Financial Action Task Force, an inter-governmental body that aims to combat money laundering and terrorist financing.

A key plank of the standards requires countries to compel banks to adopt “know your customer” due diligence practices to identify criminals and keep their transactions out of the banking system. Banks must take reasonable steps to identify and verify all customers and controllers (called beneficial owners) of customers. To guard against laundering risks linked to corruption, they must also identify customers who hold senior public offices (so-called Politically Exposed Persons), their family members and close business associates. Identity particulars must be verified using reliable, independent source data or documents.
But do governments apply the same due diligence measures when they do business?

More to be done

We conducted a study, recently published in the Sydney Law Review, into whether Australian governments take similar care to “know their suppliers”. The procurement spend of Australian governments exceeds A$110 billion per year and presents a rich target for criminals.

We focused on the type of identification and verification measures that a range of Australian government departments and agencies undertake in relation to prospective contractors.
In general, we found that standard procurement practices fall well below the standard of the “know your customer” checks required of banks.

General government procurement practices, for example, do not consistently identify the directors and the controllers of corporate suppliers. It is not routine for procurement officials to check consistently if tender candidates have a criminal history or whether they are controlled by public servants or serving politicians.

Suppliers are not generally checked against blacklists maintained by other governments or the World Bank or even against Australia’s own foreign sanctions list.
Where information is collected, it is generally not independently verified. In essence, the government accepts the word of the supplier.

Reducing risk

Such practices expose Australian public procurement to criminal risk. Australia has been rocked by enough procurement scandals to show that there is little justification for complacency.

Victorians recently witnessed the very public picking apart of the Department of Education and Training, as stories of Nino Napoli diverting public funds through dodgy contracts hit the headlines.

And earlier this year, charges were laid against nine people following an investigation into alleged serious corruption in the transport sector. That case focused on the procurement of infrastructure works at Public Transport Victoria and the former Department of Transport.
In NSW, ICAC’s inquiries into former ALP minister Eddie Obeid turned up various cases where he is alleged to have attempted to influence decisions of public officials favouring certain companies, without disclosing his or his family’s interests in those companies.

Headlines such as these saw Australia falling out of the top ten countries in Transparency International’s annual global Corruption Perceptions Index.

The failure to properly vet suppliers not only increases the vulnerability of procurement processes to corruption and abuse, but also undermines the effectiveness of Australia’s anti-money laundering and counter-terrorism financing laws. It enables criminals to use tax dollars to fund criminal activities and provides them with an appearance of public respectability that may facilitate their access to formal financial and professional services.

This problem can be fixed. As a starting point, government procurement processes at all levels should be amended to include standardised, risk-based supplier integrity checks.
Trained procurement officials should be given access to the data that bank compliance officers use to perform their integrity checks on customers. Harnessing the power of Big Data will be crucial in the long run.

Governments say they have declared financial war on crime, corruption and terrorism but this battle cannot be fought by the private sector alone.

Governments need to do better, and join the private sector in this battle. The current gaps pose a risk to Australian national security that should not be ignored.


Louis de Koker is Professor of Law at Deakin University.
Kayne Harwood is Casual Lecturer in Law at Deakin University.

This article was originally published on The Conversation. Read the original article.

(Comment: The Federal government could do better as well by establishing an anti-corruption commission.) 

Tony Fitzgerald's prescription for good government

On ABC 7.30 last night Tony Fitzgerald who headed the inquiry into corruption in Queensland 25 years ago said the LNP Newman government represented the low point for best practice government in all the years since. 

Fitzgerald has written a more comprehensive critique on The Drum.

He has put forward four principles of good governance, now picked up by others as in this Open letter, asking political parties for a commitment and a clear explanation how they would be implemented if elected:

1. Govern for the peace, welfare and good government of the State;
2. Make all decisions and take all actions, including public appointments, in the public interest without regard to personal, party political or other immaterial considerations;
3. Treat all people equally without permitting any person or corporation special access or influence; and
4. Promptly and accurately inform the public of its reasons for all significant or potentially controversial decisions and actions. 

You might wonder where's the hard part here, but it was proving a big task for the LNP until Premier Newman murmured yes during last week's Leaders Debate.The implementation details are in short supply, surprise, surprise.

As Fitzgerald explained, the principles are simply asking politicians to behave democratically

"They're really requirements of what we call representative democracy, which is a system in which a parliament is elected to represent the people and to govern on behalf of the people. Whereas the political parties of today see it rather as a contest in which whichever one wins does pretty much what it likes. And so I suppose if we're ever going to get back to the proper representative democracy, it will have to come through pressure from the public to force the parties to acknowledge these requirements and it seemed appropriate in the present circumstances to start that pressure going forward."

Fitzgerald acknowledged the principles can't be legally enforced."To be held accountable, they can be held politically accountable." That's a collective responsibility for us at the ballot box and thereafter as well.

The Fitzgerald principles should be waved in front of contenders for political office at all levels of government starting with those contesting the NSW election in March. And before those already exercising legislative or executive power in the people's name.

For our government in Canberra, determinedly keeping its head down on the whole range of integrity, transparency and accountability issues except its plan to abolish the Office of Australian Information Commissioner, Fitzgerald had this to say about the need for a federal anti-corruption agency, something the government opposes:

I think it's self-evident. The people who go into State Parliament, who go into the major political parties are the same people who go into those parties and go into Federal Parliament. I don't think they're any different in one group or the other. They're people who, for one reason or other, are prepared to buckle down and do what the party wants, to advance the interests of the party, to advance the ideologies of the party and to advance their own interests. I can't understand why they'd be corrupt at one level - or be corruptible at one level and not at the other. So, that's not to say I know of any corruption in the federal system at the moment, but I'm pretty sure you'd find that if the digging started, there'd be bones at the bottom of the hole, you know.

Finally Fitzgerald on the skills and experience of the political class:

.. I'm concerned on a wide range of things about government in Australia, but in particular, the idea that the people who are now running politics are professional politicians, learning all the bad habits in political office. Nearly all members of Parliament now will have done a stint in the party office, a minister's offers or an associated entity's office. We need to get people who are independent, who've taken - who've learned and exercised values outside the political system. So that's my broad concern

G20 countries chance to lead on transparent company ownership?

Support Transparency International and the UnmaskThe Corrupt Campaign: 

"We want the leaders of the world’s biggest economies – the G20 – to publish lists of the real owners of all companies, and to make it harder for the corrupt to travel internationally and enjoy their ill-gotten gains. Help us send a loud message to global leaders on Thunderclap to unmask the corrupt."

Hold that bubbly-Honesty Oscars go elsewhere

Terrrific that Aussies Cate Blanchett, Catherine Martin and Beverley Dunn brought home gold.

The prizes went elsewhere at the Honesty Oscars "honoring creativity in global anti-corruption campaigning":

Best Visual Effects: the International Budget Partnership’s “Open Budget Survey 2012″ (Pfffffffffft! Australia is not among the 100 countries rated by OPB for Fiscal Transparency)

Best Activist in a Leading Role: Sely Martini deputy director of Indonesia’s anti-corruption watchdog group Indonesia Corruption Watch 

Best Activist Anthem:Dr. Sley and Da Green Soljas of Cameroon.

Best Director: Rakesh Rajani,Tanzanian civil-society leader (and member of the Open Government Partnership Steering Committee)

Best Picture: Open for Change for Open Development Explained

Congratulations to all.