Public hearings shine light on corruption – Sunlight is the best disinfectant

April 2022

Public hearings have been critical to the success of many corruption investigations in NSW and Victoria. NSW ICAC has publicly exposed more corruption than the Victorian IBAC. NSW ICAC has held 42 public inquiries and made 39 investigation reports public from 2012/13 to 2019/20. Victoria’s IBAC has held 8 public hearings and published 14 investigation reports. Some examples of successful public hearings from both agencies are highlighted below.

In October 2021 NSW ICAC commenced public hearings for Operation Keppel, an investigation into allegations that, from 2012 to August 2018, the then NSW Member of Parliament for Wagga Wagga, Mr Daryl Maguire, engaged in conduct that involved a breach of public trust by using his public office and parliamentary resources, to improperly gain personal benefit.¹ The hearing called witnesses to give evidence about Mr Maguire’s personal relationship with former Premier Gladys Berejiklian and the potential impact of this relationship on the allocation of a $5.5 million grant given to the Australian Clay Target Association in Wagga Wagga.²

During 2012 and 2013, NSW ICAC held public inquiries concerning the issuing of mining leases and licences involving former NSW Government ministers. The investigations resulted in the prosecution of Eddie Obeid and Ian Macdonald for misconduct. Public hearings were critical to uncovering the information needed to finalise the investigations. During the Operation Jasper and Operation Acacia public hearings, the NSW ICAC called 138 witnesses and in fact had to build a bigger room to hold the hearing. According to former NSW ICAC commissioner David Ipp AO QC, “the stark fact is that Operations Jasper and Acacia could not have been undertaken without it.” ³

Victoria’s IBAC held public hearings in October and November 2021 into allegations of serious corrupt conduct involving Victorian public officers, including Members of Parliament. The hearings were part of Operation Watts, an investigation looking into allegations of ‘branch stacking’.⁴ The hearings heard from various witnesses including a Victorian ministerial staffer who, while being paid by the taxpayer spent as much as 80% of her days doing factional work as part of a vast branch stacking operation.⁵

In 2015 IBAC held public hearings for Operation Ord, an investigation into allegations of serious corrupt conduct in the Education Department. The inquiry revealed that millions of dollars were transferred to “banker schools”, supposedly for the purpose of facilitating the payment of invoices on behalf of a region or clusters of schools. The investigation showed that senior departmental officers instead used these schools as a slush fund to pay for alcohol, lavish hospitality and expensive retreats, and goods and services completely unrelated to departmental activities.⁶

The use of public hearings by NSW ICAC

NSW ICAC has the ability to use public hearings in its investigations when the Commissioner deems it to be in the public interest. Data from 2012/13-2019/20 shows that far from overuse, NSW ICAC only conducts public hearings in only a fraction of its investigations. Over the period examined, NSW ICAC conducted 979 private examinations and 42 public inquiries.

The data also shows that allegations made to NSW ICAC are assessed on merit and only a small percentage proceed to a full investigation. Of the 22,297 matters received over the period, only 95 full investigations were undertaken.

NSW ICAC’s ability to hold public inquiries had been considered and supported in at least two reviews of ICAC’s operations, first by Bruce McClintock SC in his 2004-5 review and secondly in the 2015 review conducted by the Hon. Murray Gleeson AC and Mr McClintock. This review by the Independent Panel was established in response to the Cunneen case, and found that:

public inquiries, properly controlled, serve an important role in the disclosure
of corrupt conduct. They also have an important role in disclosing the ICAC’s
investigative processes. The Panel is not attracted to the idea that the powers
of the ICAC should all be exercised in private.⁷

The report also noted that the Chief Commissioner is the best person to make the decision as to whether to open the inquiry, and that this process has led to predominantly good decisions:

The decision whether to conduct a public inquiry is an operational decision
made for the purposes of the particular investigation. It is a decision best
made by the Commissioner who is apprised of all the relevant facts and in the
best position to weigh the public interest. There has, in fact, been little criticism
brought to the Panel’s attention (with one exception) of the ICAC’s decisions to
hold public inquiries, as distinct from the manner in which such inquiries are
conducted. The exception is, of course, the decision to hold the public inquiry
in [in the matter of Margaret Mary] Cunneen. That is an insufficient basis to
recommend a change.⁸

Endorsement of public hearings

The use of public hearings has been endorsed by former Chief Justices of the High Court, and former IBAC and ICAC Commissioners. In the Royal Commission into the Builders Labourers Federation (BLF) in the 1980s, the issue of public hearings
was raised in the High Court. Then Chief Justice Anthony Mason stated that an order that a commission proceed in private:

… seriously undermines the value of the inquiry. It shrouds the proceedings with a cloak of secrecy; denying to them the public character which to my mind is an essential element in public acceptance of an inquiry of this kind and of its report. An atmosphere of secrecy readily breeds the suspicion that the inquiry is unfair or oppressive. ….

The denial of public proceedings immediately brings in its train other detriments. Potential witnesses …, lacking knowledge of the course of proceedings, are less likely to come forward. And the public, kept in ignorance of developments which it has a legitimate interest in knowing, is left to speculate on the course of events.

… Here the ultimate worth of the Royal Commission is bound up with the publicity that the proceedings attract and the public has a substantial and
legitimate interest in knowing what is happening before the Commissioner.⁹

Former Victorian IBAC Commissioner Stephen O’Bryan QC has said that public hearings are key to exposing corruption:

Public examinations are vital to IBAC in fulfilling its primary function of
exposing public sector corruption and police misconduct. I consider them an
invaluable tool for informing the public sector and the community about the
detrimental impacts of corruption and police misconduct, and highlighting
ways in which it can be prevented. Public examinations also help deter further
wrongdoing, not only for potentially corrupt individuals, but also for public
sector agencies which are prompted to examine their own processes and
activities.¹⁰

Former NSW ICAC Assistant Commissioner Anthony Whealy QC has said:

There are many people out there in the public arena who will have information
that’s very important to the investigation. If you conduct the investigation
behind closed doors, they never hear of it and the valuable information they
have will be lost.¹¹

Former NSW ICAC Commissioner David Ipp AO QC has said that:

Its main function is exposing corruption; this cannot be done without public hearings.¹¹

Recommendation

After preliminary private hearings, a National Integrity Commission requires the ability to open hearings to the public. This ability may be used in cases where the Commissioner believe it is in the public interest to do so, and will be make the
investigation to which it relates more effective.

1. For the purposes of an investigation, the Commission may, if it is satisfied that it is in the public interest to do so, conduct a public inquiry.
2. Without limiting the factors that it may take into account in determining whether or not it is in the public interest to conduct a public inquiry, the Commission may consider the following:
   1. the benefit of exposing to the public, and making it aware, of corrupt conduct,
   2. the seriousness of the allegation or complaint being investigated,
   3. whether conducting a public inquiry will make the investigation to which it relates more effective,
   4. any risk of undue prejudice to a person’s reputation (including prejudice that might arise from not holding an inquiry),
   5. whether the public interest in exposing the matter is outweighed by the public interest in preserving the privacy of the persons concerned.

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References

4 IBAC, Operation Watts, accessed 15/12/2021, https://www.ibac.vic.gov.au/investigating-
corruption/IBAC-examinations/operation-watts

5 The Guardian, 12 October 2021, https://www.theguardian.com/australia-news/2021/oct/12/ibac-
branch-stacking-inquiry-told-publicly-funded-staffer-spent-80-of-time-on-factional-work

6 IBAC, Operation Ord, accessed 15/12/2021 https://www.ibac.vic.gov.au/investigating-corruption/IBAC-
examinations/operation-ord

7 Gleeson and McClintock (2015), Report – Independent Panel Review of the Jurisdiction of NSW ICAC

8 Gleeson and McClintock (2015), Report – Independent Panel Review of the Jurisdiction of NSW ICAC pp
60-61

9 In Victoria v Australian Building Construction Employees and Builders Labourers Federation (1982) 152
CLR 25 at 97.

10 Independent Broad-based Anti-corruption Commission (2015), Annual Report

11 Gerathy (2016), ICAC inspector calls for end to public hearings to stop ‘trashing of reputations’, http://www.abc.net.au/news/2016-05-12/icac-inspector-david-levine-calls-for-end-to-public-
hearings/7409126

12 Ibid.