As the National Anti-Corruption Commission continues to face criticism over its decision-making, new details have emerged about compliance issues and disclosures at the body.
In the first six months of the National Anti-Corruption Commission’s operation, the body’s key governance officer became so “alarmed” at the behaviour of executives that she decided to leave the fledgling agency rather than continue to fight over disclosures and other processes.
The problems were many and ranged from perceptions of noncompliance to significant issues that affect the credibility of the federal corruption watchdog.
Yesterday a parliamentary oversight committee heard the agency’s decision to appoint an “independent, eminent person” to reconsider its robodebt referral decision will deliberately bypass the same committee, which is supposed to consider recommendations for appointments of deputy commissioners.
The Saturday Paper revealed last week that the NACC had already made one attempt to hire such a person, former solicitor-general Justin Gleeson, SC, as a temporary senior executive – but rescinded the offer before it was announced because it had concerns about how a former Coalition minister referred by the Royal Commission into the Robodebt Scheme would react.
“You take any one of these things in isolation and you have a conflict problem,” a source familiar with the NACC decision told The Saturday Paper.
“But if you take every moment like this and lay it end to end, you have what I think is a very significant cultural problem in an agency that should be the squeakiest of squeaky clean.”
The rift between the then acting director of governance, risk and reporting – who reported to the NACC chief executive, Philip Reed – and the executive is well known within the agency. The senior staff member told colleagues she had concerns over “integrity issues” that had arisen before and after the NACC began official operations.
Among her concerns were that Commissioner Paul Brereton, who had just finished as an appeal judge on the Supreme Court of New South Wales, immediately hired his associate as an executive assistant in circumstances where governance concerns were raised about the selection process.
“There are little things staff found uncomfortable, for example his associate came with him and we had to sit there and say ‘Well, that’s not how it works in the APS…’ ” one NACC source says of the early ructions, as the executive assistant role had not then been advertised.
“It’s a weird dynamic and a big culture change because the APS does not work like that.”
A spokesperson for the NACC told The Saturday Paper that Commissioner Brereton did bring his associate across from the bench, but added a proper process was adhered to in doing so.
“On inception of the commission, there was a vacancy for an executive assistant position,” the spokesperson said.
“In conformity with the Public Service Act 1999, the position was initially filled on a non-ongoing basis, following which an externally advertised competitive merit-based process was undertaken to fill the role permanently.”
One source says Brereton carries the baggage of being a judge in a commissioner’s role. “He’s a very black-letter judge, so what the rules say he can do is what he will do. But it was very difficult to explain to him that the rules might say one thing and the expectation is much different.”
While the fact of the commission’s executive being given invitation-only Qantas Chairman’s Lounge memberships is now well known, a contested account of how these memberships came to be declared in the first place has raised eyebrows.
The NACC denies there was any argument about whether to declare the memberships on the gifts and benefits register.
“Your information is incorrect,” a spokesperson said.
The commission’s executive have all declared Qantas Chairman’s Lounge memberships once, when received, and remain members.
Processes were not a strong suit in the early operations of the corruption watchdog. In its annual report, released on Wednesday, the NACC disclosed “significant non-compliance” with the Public Governance, Performance and Accountability Act after a large sum of money was committed for construction work on an office without formal written approval as required under the law.
To remediate this, the NACC committed to “improving the Commission’s end to end procurement processes and understanding of responsibilities under the PGPA Act, Commonwealth Procurement Rules and other relevant frameworks”.
The Saturday Paper understands there were other misconceptions about the procurement rules, including one where staff mistakenly believed the reporting threshold for Commonwealth AusTender contracts was $100,000 when it is, in fact, $10,000.
The annual report notes that the NACC received 3190 referrals during the 2023-24 year. It saw a potential for corruption – and to a lesser extent, actual corruption – in “3 dominant domains” that stretched across procurement, the interface between public and private institutions and recruitments and promotions.
“In all these domains, the actual or perceived corrupt conduct typically involves preferential treatment of family, friends and associates, and the misuse of information or opportunity to gain an advantage,” the report says.
“These mechanisms produce a subversion of the public decision-making process, to serve a private benefit. Almost invariably, they have their origin in a conflict of interest.”
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Within months of beginning operations, the NACC made its fateful decision on the Robodebt Six referrals – to do nothing with them despite identifying corruption issues – but waited almost a full year before announcing the decision to the public.
The inspector of the NACC, Gail Furness, SC, the only other authority outside the parliamentary oversight committee who has real influence over the watchdog, found the decision was tainted by the perception of bias because Commissioner Brereton had declared a “close association” with one of the referred people but remained involved in the decision-making, which was “comprehensive, before, during and after” an October 19, 2023, meeting when the matter was decided.
Brereton was forced to accept the inspector’s findings that he engaged in officer misconduct as it was technically defined under the NACC Act but has spent most of his time since re-litigating his conduct.
Last Friday, at an Adelaide conference about public trust in government institutions, Brereton told the audience the criticism of his agency was because it had not “pursued the unpopular” on the Robodebt Six.
“I think my record demonstrates that when there is appropriate evidence and a proper legal basis, I won’t hesitate to call out bad behaviour by the powerful and the popular: whether by the wealthiest in the land or by our celebrated special forces,” he said.
“But I will not call individuals corrupt without a proper evidentiary basis, or on some extended notion of the idea of corruption that does not justify the word.
“If there are to be scalps, they must not be the result of an unfair process, or of pressure to produce them. All this requires a commission that can proceed with perseverance and fairness, not persecution and vengeance. This is why calls to produce scalps, publicly and promptly, are unhelpful.”
Brereton said in his address that “broadly, corruption is about the abuse of public power or position for a private purpose”.
The NACC’s own guidance on its website says something subtly but crucially different on a key element, which integrity experts and former judges such as Margaret White say were made out clearly in the robodebt referrals.
“A public official can breach public trust even if they don’t gain any advantage for themselves or someone else,” the commission website says.
“The key element of a breach of public trust is the exercise of an official power other than honestly for the purpose for which it was conferred.”
Similarly, it says, a public official can abuse their office by engaging in “improper acts or omissions” that provide benefit to themselves or “cause a detriment to another person”.
“To commit an abuse of office, a public official must either intend to make something good happen for themselves or someone else (a benefit) or make something bad happen to someone else (a detriment),” the website says.
The NACC legislation itself is explicit: “Conduct involving a public official may be corrupt conduct even if the conduct is not for the person’s personal benefit.”
In his own remarks at the state of the NACC annual report, Brereton writes: “Corruption is essentially about the misuse of public power, position, privilege or property, for private purposes. It results in the diversion of public resources, and the undermining of trust in our public institutions.”
In his speech in Adelaide, Brereton also signalled that he found calls for “individual accountability” to be side issues for the watchdog because that “alone cannot bring about systemic change”.
The kind of corruption the commission does concern itself with is “serious and systemic” – although this isn’t defined in the act and the only guidance note issued by Commissioner Brereton in the past year, seeking to describe it, is one page and just 68 words that says significant corruption is “more than negligible or trivial”.
Last Friday, Brereton rejected calls for his resignation, citing the integrity of the organisation.
“I accept that my judgment in this respect has been found to be mistaken through the prism of the law relating to apprehended bias. But the legal lens is not the only one,” he said.
“There was a balance to be struck between my responsibility as a leader for managing the affairs of the commission and issues that would have lasting implications for it on the one hand, and avoiding the perception that my prior professional relationship with one of the referred persons might influence the decision on the other...
“As to the suggestion that I should resign, I think you will by now have gathered my response. First, if every judge who has been found to have made a mistake of law or fact resigned, there would be none sitting...
“But most importantly, if I were to be deterred from discharging my duties by adverse publicity, the important independence of the commission would be undermined, in no small way. It would be a statement that our yardstick should be popularity, not integrity. It would say that we should avoid making difficult decisions, lest they be unpopular.
“From there it is a short path to becoming an architect of oppression and vehicle of vengeance, rather than an instrument of integrity.”
Former Queensland Court of Appeal judge Margaret White told a Centre for Public Integrity webinar this month that the error of judgement in Brereton’s case was “much more fundamental” than an appeal court deciding a hearing judge made wrong findings of fact.
“It is so serious and so essential, you cannot minimise it in the way in which I think there has been an attempt to do,” she said.
The Saturday Paper reported last week that two former and one current employee of NACC wrote to Inspector Gail Furness “expressing concerns and/or providing information at aspects of the management of the Commission’s operations” and these were communicated back to the agency, although Furness considered the issues raised did not amount to agency maladministration.
A spokesperson for the NACC said: “The commission respects that staff are entitled to opinions that differ from the executive, and provides internal channels, including anonymous feedback, to enable those opinions to be expressed and considered through proper channels.”
This article was first published in the print edition of The Saturday Paper on November 23, 2024 as "Exclusive: NACC integrity officer quits over integrity".