Here’s the dirt on body that’s meant to clean up the joint
Could Mark Dreyfus be high on the list of people to be referred to a newly created national anti-corruption commission?
Dreyfus, after all, has a tawdry history of referring Liberal ministers to the Australian Federal Police during the term of the last Coalition government. Few spheres of behaviour do karma as obsessively as politics.
As Labor tries to steamroll the bill through parliament this year, Dreyfus and indeed other Labor MPs should consider what amendments, specifically what sorts of protections, are needed if any of their actions are referred to this federal anti-corruption body.
Because, as sure as night follows day, a Labor MP, perhaps a Labor minister, will come before the NACC at some point.
In answering what we will call the Dreyfus question, one must start with the dangerously broad definition of corrupt conduct. As currently drafted, clause 8 sets down a broad list of behaviours that amount to corrupt conduct.
It includes conduct of any person (whether or not a public official) that adversely affects, or could adversely affect, directly or indirectly, the honest or impartial exercise of any public official’s power or the honest or impartial performance of any public official’s functions or duties as a public official. The “could adversely affect” is a kicker, giving the NACC power over conduct that has not yet, but could, adversely affect a public official in the manner set out in clause 8.
Sensibly, Labor has agreed to remove clause 8(1)(e) that would have extended the definition of corrupt conduct to include “corruption of any other kind”. Even with this change, when you combine the breadth of the current definition to its retrospective reach, all MPs should rethink the bill as drafted.
There is a particular danger for Labor. First, the NACC could investigate past questionable conduct of former Labor MPs. For example, the NACC might decide to delve into the behaviour of Sam Dastyari, who resigned in 2017, after receiving funds and hospitality paid for by companies linked to the Chinese government. Dastyari adopted positions contrary to the then Labor government foreign policy and warned Chinese Communist Party-linked Huang Xiangmo that his phone was likely being tapped by counterintelligence authorities.
The second risk is that the NACC, at some stage, might investigate Labor ministers in the Albanese government. It would be a stupendous failure of imagination by Labor MPs who are excited about an NACC investigating past grants by the former Coalition government not to consider Labor’s Achilles heel of cash-for-policy. A newly created NACC might decide to investigate whether Labor, in government, settled on policies that favoured unions, union officials, industry super funds, class-action law firms and litigation funding because money from each of these areas flowed to Labor directly or indirectly.
Under the definition of corrupt conduct, it wouldn’t require much for the NACC to decide that if union officials offered the Labor Party money in return for policies that suited union officials, and if Labor MPs agreed to take that money, it necessarily impeded a minister’s ability to determine policy in an impartial manner.
The newly formed NACC might explore the structures set up to send money to Labor, not just directly from unions but also indirectly where money flowed from industry funds to union officials and unions, and, in turn, reached Labor’s coffers. Money that flowed from litigation funders to class-action law firms, and on to Labor, might similarly raise eyebrows at an NACC when matched against Labor policies on class actions
Given the shrinking size of the union movement and its growing influence on the Labor Party, under the bill as drafted, this flow of cash-for-policy might be a prima facie case of “serious or systemic” corruption giving rise to “exceptional circumstances” that could warrant a public inquiry by the NACC.
Here is a list of possible investigations that may be referred to a future NACC for investigation.
Start with Dreyfus. The Attorney-General, overseeing the drafting and passage of the NACC Bill, has, in clause 12 of the NACC Bill, carved out officials “of a registered industrial organisation” who exercise a power under a federal law. In other words, union officials exercising powers under a federal law are exempt from investigation by the NACC.
The Attorney-General and the Prime Minister have struggled to answer why military personnel and NDIS workers will be covered by the NACC but union officials will enjoy the benefit of this curious carve-out. That exemption only makes political sense when one considers the rivers of gold that flow from unions to Labor.
Labor’s cash-for-policy problem doesn’t end with Dreyfus.
Consider Tony Burke’s determination to abolish the Australian Building & Construction Commission. The ABCC has prosecuted the CFMEU for serious breaches of the Fair Work Act, including intimidation and bullying. Numerous judges have condemned the construction arm of the union as one of the country’s worst recidivists. Abolishing the ABCC against a backdrop of CFMEU lawbreaking only makes sense when one considers the rivers of gold flowing from the CFMEU to Labor. Indeed, Burke’s suite of workplace policies that brazenly boost union power to the delight of Labor’s paymasters in the union movement may also deserve scrutiny by a NACC.
Consider also how new Financial Services Minister Stephen Jones scrambled after the May election to kill off new transparency rules for superannuation funds enacted by the Coalition. Not unreasonably, these reforms would have required itemised disclosure of sponsorships, gifts and political donations and payments to related and affiliated entities.
Labor’s haste to remove even basic transparency concerning the flow of money from super funds to unions only makes sense when one follows the money from industry super funds to unions and all the way to Labor.
For example, the CFMEU is the biggest beneficiary of payments from industry funds. In the last financial year, the union received $6,147,986 from industry funds. Labor is the ultimate beneficiary; the CFMEU and the new body created when the CFMEU merged with the MUA sent $7m directly to Labor between 1998-99 and 2019-20.
Jones could be in the dock for also unwinding reforms to Australia’s class action regime. Who are the biggest beneficiaries of Labor’s new policy?
The life of a litigation funder will be less regulated under Labor’s policy changes. These firms will no longer have to hold an Australian financial services licence or comply with the rules for managed investment schemes.
Maurice Blackburn, the Melbourne law firm with the largest slice of class actions in this country, rakes in tens of millions of dollars from litigation funders who paid their legal fees in class action cases.
The same firm has its eye on the prize of contingency fees. Given that the Law Council has warned against contingency fees because “enabling lawyers to hold a direct financial interest in the outcome of their client’s case creates a serious risk of compromising a practitioner’s fundamental obligations to the court and their clients”, why would Labor consider contingency fees? The flow of donations from Maurice Blackburn to Labor over the past decade might answer that question.
One day in the future, the NACC might need to staff an entire division called Follow The Money, which investigated cash-for-policy. Both parties engage in cash-for-policy at some level. But Labor does it with more chutzpah.
As opposition legal affairs spokesman Julian Leeser said in September when the Labor government announced policies that would enrich class-action lawyers: “Labor’s three biggest donors are the unions, the industry super funds and class-action law firms. The first actions of the Albanese government have been to reduce accountability and transparency in relation to each.”
On Friday, Leeser asked the critical question of Labor: “How is it that John Setka wouldn’t have to answer to this (NACC legislation) but NDIS workers around the country would? If it’s good enough for NDIS contractors, aged care workers and ADF members, it should be good enough for union officials. Yet again, Labor can’t help doing special deals for unions.”
Labor MPs past and present, union officials and sundry other funders of Labor, both direct and indirect, may wish to look again at the breadth and retrospective reach of the NACC bill. Not to mention the spectacle of a public show trial when a future NACC decides there are exceptional circumstances. In fact, there are many provisions in the current NACC bill that need to be reconsidered to ensure that the NACC does not become a star chamber.
Labor won’t always control who runs the NACC. Politics is a dirty business, and it might get dirtier with the creation of a body that, paradoxically, is meant to clean up the joint.
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Could Mark Dreyfus be high on the list of people to be referred to a newly created national anti-corruption commission? If not soon, could the Attorney-General be referred to the NACC later when there is a change of government?