Why Gladys Berejiklian won’t face criminal charges

Former NSW treasurer Matt Kean appeared to betray some confusion about the role of the state’s corruption watchdog on Thursday when he tweeted disparagingly that it had taken “two years” for it “to tell us that Gladys Berejiklian has not broken the law”.

The implication seemed to be that the Independent Commission Against Corruption had no work to do unless it ultimately recommended the NSW Director of Public Prosecutions consider criminal charges against targets of its investigation.

While legitimate criticisms may be made about the time taken by the ICAC to release its findings and recommendations, and not only in this inquiry, its statutory role explicitly is not limited to investigating conduct that may constitute a criminal offence.

In its long-awaited report released on Thursday, the ICAC found Berejiklian and her former partner, the former Wagga Wagga Liberal MP Daryl Maguire, had both engaged in serious corrupt conduct, but for different reasons.

The ICAC did not conclude the DPP should be asked to advise about the potential prosecution of Berejiklian for any offence. However, Maguire and two of his business associates may face criminal charges.

The ICAC said there was insufficient evidence to prove to the criminal standard – beyond reasonable doubt – that Berejiklian had the criminal intent required to establish the offence of misconduct in public office. It meant prosecutors would be unable to prove an essential element of the crime in court.

However, it was satisfied to the lower civil standard – on the balance of probabilities – that Berejiklian did act “dishonestly and partially” and it could make a corruption finding against her.

Definition of corrupt conduct

A finding of corrupt conduct, as defined in the ICAC Act, does not require a criminal offence to have taken place or be capable of being proven in court, although sometimes it will dovetail with criminal behaviour.

The definition of corrupt conduct in the ICAC Act is broad. It includes any conduct of a public official “that constitutes or involves the dishonest or partial exercise of any of his or her official functions”, and “any conduct of a public official or former public official that constitutes or involves a breach of public trust”. The conduct must also involve one of the following things: a criminal offence; a disciplinary offence; reasonable grounds for terminating the services of a public official; or a substantial breach of the code of conduct that applies to ministers or MPs.

The ICAC may only make a corruption finding in a report if it considers the conduct in question is “serious corrupt conduct”.

Duty to report

Under section 11 of the ICAC Act, a NSW minister also has a duty to report to the corruption watchdog any matter they suspect on reasonable grounds concerns or may concern corrupt conduct.

Failing to discharge this duty may amount to a breach of the ministerial code of conduct, which requires ministers not to act dishonestly, and to act only in accordance with what they consider to be in the public interest.

Former NSW premier Gladys Berejiklian leaves her home in Sydney on Thursday ahead of the release of the ICAC’s report.Credit: Louise Kennerley

Breach of public trust

The commission found Berejiklian breached public trust and partially exercised her official functions in 2016 and 2017, as treasurer and later premier, when the state government made a $5.5 million grant to the Australian Clay Target Association in Maguire’s electorate. She did not disclose her close personal relationship with Maguire at the time.

It also found Berejiklian breached public trust and partially exercised her official functions in 2018 in connection with $30 million promised to the Riverina Conservatorium of Music for a recital hall, also in Maguire’s electorate. Ultimately, $20 million of that money was not paid.

The ICAC found both of these cases amounted to serious corrupt conduct, but were not “so serious as to merit criminal punishment”, which is an element of the criminal offence of misconduct in public office.

Failure to notify ICAC

Crucially, the commission found Berejiklian also engaged in serious corrupt conduct by “refusing to discharge her duty” under section 11 of the ICAC Act to report her suspicions about Maguire to the corruption watchdog. It concluded Berejiklian had “dishonestly and partially” breached the ministerial code by failing to report Maguire to the ICAC.

“On the Commission’s findings, Ms Berejiklian formed an actual suspicion that Mr Maguire’s conduct concerned, or might have concerned, corrupt conduct. She deliberately refused to report that conduct to the Commission,” the ICAC said.

Former Liberal MP Daryl Maguire, who was a target of Operation Keppel.Credit: AAP

“Ms Berejiklian, in the exercise or performance of her official functions, acted improperly for her private benefit – namely, the benefit in maintaining or advancing her close personal relationship with Mr Maguire.”

It said it was satisfied on the balance of probabilities – a lower standard of proof than the criminal standard of beyond reasonable doubt – “that inferences can be drawn from the facts and circumstances to establish that Ms Berejiklian wilfully failed to comply with her s 11 duty”.

The criminal standard of proof

However, the ICAC said it accepted submissions by Berejiklian’s legal team that obstacles to a prosecution for the criminal offence of misconduct in public office “would be so formidable as to make it reasonably clear that any advice from the DPP ... would be to the effect that no prosecution would be commenced”.

While the commission was satisfied on the balance of probabilities that Berejiklian wilfully failed to comply with her duty to report her suspicions about Maguire to the ICAC, it said there was “insufficient admissible evidence ... for inferences to be drawn that would prove the mens rea [criminal intent] of the offence of misconduct in public office to the required standard of beyond reasonable doubt in any criminal prosecution”.

For this reason, it declined to include a statement that consideration should be given to obtaining the advice of the DPP about any prosecution against Berejiklian.

Berejiklian told the ICAC she had “no knowledge” of wrongdoing by Maguire and did not think she had any information that could have benefited the corruption watchdog.

‘In accordance with the law’

Geoffrey Watson, SC, who was counsel assisting high-profile ICAC inquiries including into members of the Obeid family, said “the finding adverse to Berejiklian is one in accordance with the statutory formulation of ‘corrupt conduct.’”

He said the definition of corrupt conduct included a wide range of conduct that was “undoubtedly reprehensible”, but did “not necessarily constitute a crime”.

“ICAC has made a decision in accordance with that [definition] that is not only correct on the facts, it’s in accordance with the law,” Watson said.

The Morning Edition newsletter is our guide to the day’s most important and interesting stories, analysis and insights. Sign up here.