National Integrity Spotlight – April 2024

In this month’s edition of the National Integrity Spotlight, we consider the most recent updates from the NACC, updates from various state-based integrity bodies, the OECD’s recent Outlook report, and recent activities of the Australian Federal Police. 

NACC Update 

Referral and Assessment Update  

The National Anti-Corruption Commission (NACC) continues to provide regular updates on the number of referrals received, the assessment process, and investigations underway. 

Key data from 1 July 2023 through to 5 May 2024 suggests that: 

• 2,888 referrals were received; 
• 2,260 referrals were excluded at the triage stage of assessment as they did not involve a Commonwealth public official or did not raise a corruption issue; 
• 144 referrals are pending triage; 
• 254 referrals are currently under assessment; 
• 2294 referrals have been assessed; and 
• 20 new investigations have been commenced, including five which will be jointly investigated, and three further investigations have been referred to other agencies with oversight from the NACC. 

The NACC has also indicated that: 

• four matters are or have been before the courts, including two that have resulted in convictions, and one that has resulted in committal for trial;  
• two matters are under consideration by the Commonwealth Department of Public Prosecutions;  
• in one matter, the NACC has completed a final report with no corruption finding; and 
• final reports are being prepared in relation to seven further matters with no prosecutions occurring. 

Corruption prevention priorities for 2024 

On 22 April 2024, the NACC released its three areas of focus for corruption prevention and education work in 2024. These priorities are: 

• conflicts of interest: the NACC indicates that there is a conflict of interest involved in most corruption, and that it intends to educate the public sector on appropriate ways to manage conflicts of interest, with practical guidance to be released in the next month; 
• ethical decision-making: the NACC indicated that recent high-profile matters have highlighted the challenges in managing ministerial and government expectations with ethical decision-making. The NACC will endeavour to provide education and support to public decision-makers with respect to making ethical decisions in established, transparent, and fair processes; and 
• the electoral process: the NACC’s focus on the electoral process is to focus on corruption issues and vulnerabilities that may arise with next year’s federal election. This focus will be on education on corruption risks relating to grants, political donations and fundraising, foreign interference, government advertising, and appointments. 

New South Wales Independent Commissioner Against Corruption (NSW ICAC)

ICAC NSW’s statement regarding Mr Timothy Crakanthorp MP 

On 10 April 2024, the NSW ICAC released a statement regarding Mr Timothy Crakanthorp MP. The NSW ICAC had received a referral from the Cabinet Office regarding whether Mr Crakanthorp had failed to declare a conflict of interest as the then-Minister for the Hunter. It then conducted a preliminary investigation and prepared a report of its findings. 

The NSW ICAC was satisfied that there were no reasonable prospects of finding that Mr Crakanthorp’s conduct was sufficiently serious to justify a finding of corrupt conduct. The NSW ICAC ultimately terminated its investigation. The NSW ICAC provided its report to The Cabinet Office, and the Premier of NSW. 

NSW ICAC finds former Inner West Council and Transport for NSW employees and contractors corrupt 

The NSW ICAC recently conducted Operation Hector, which revealed serious corrupt conduct involving former employees and contractors of Inner West Council (IWC) and Transport for NSW (TfNSW). 

Background 

In October 2019, the NSW ICAC received a notification in 2019 from IWC that it had received an anonymous complaint which alleged that Tony Nguyen, a senior project engineer at IWC, had engaged in corrupt conduct. 

Following further information and reporting from IWC, in January 2020, the NSW ICAC began a preliminary investigation. This was escalated to a full investigation in April 2020. In May 2020, the NSW ICAC expanded the scope of the investigation to Nima Abdi, a TfNSW project manager. The investigation’s scope was further expanded on at least five occasions between 2020 and 2023 to include the conduct of various other parties. 

The investigation ultimately examined two principal aspects, being: 

1. the conduct of Mr Nguyen regarding the procurement of subcontractors for building work and the conduct of those subcontractors with Mr Nguyen; and 
2. the procurement of subcontractors by a third party, who was engaged by TfNSW for rail station upgrades. 

There were seven key allegations that the NSW ICAC focused on relating to events which took place between 2014 – 2021 involving Mr Nguyen, Mr Abdi and a number of other individuals. 

Findings 

On 30 April 2024, the NSW ICAC released its findings in its report ‘Investigation into the awarding of Transport for NSW and Inner West Council contracts’. 

The investigation uncovered widespread corrupt conduct involving the awarding of contracts and highlighted deficiencies in governance and oversight within both IWC and TfNSW. The NSW ICAC also made findings of serious corrupt conduct against a number of individuals including Mr Nguyen and Mr Abdi amongst others.  

Recommendations 

The NSW ICAC now seeks the advice of the Director of Public Prosecutions (DPP) on whether any prosecution should be commenced.  

The NSW ICAC also made 17 recommendations to IWC, TfNSW and the NSW Government, including: 

• nine corruption prevention recommendations to TfNSW to strengthen accountability, transparency, and integrity in its procurement practices; 
• seven corruption prevention recommendations to IWC, including to improve procurement processes; and 
• one recommendation to the NSW Government to consider the introduction of a debarment scheme to assist public authorities to identify suppliers that have had previous issues with misconduct or breaches of relevant requirements. 

Northern Territory Independent Commissioner Against Corruption (NT ICAC) 

On 26 March 2024, the NT ICAC issued a statement by Commissioner Michael Riches in relation to Operation Beaufort, which is an ongoing joint investigation with NT Police into allegations of improper conduct within the Territory Response Group (TRG) of the Northern Territory Police. 

In his statement, Commissioner Riches stated, on the basis of the evidence before the NT ICAC, the investigation will “consider all awards issued in the period from 2007-present, and the circumstances in which those awards were given.” 

The NT ICAC indicated that, while protection would be provided to current and former police officers who provide first-hand information, this protection would not be extended to those whose conduct may amount to criminal conduct and/or have deleted information from the NT Police systems relating to the subject matter of the investigation. 

Western Australian Parliamentary Inspector releases report on misconduct of former Corruption and Crime Commission officer

On 21 March 2024, the Joint Standing Committee on the Corruption and Crime Commission (WA CCC) tabled the Parliamentary Inspector’s report, entitled ‘Going Rogue: Serious Misconduct by a Commission Officer‘ (the Report), relating to serious misconduct of a former WA CCC officer, which was discovered by the WA CCC and reported to the Parliamentary Inspector. 

The Parliamentary Inspector was notified of allegations about the former officer’s conduct on 27 January 2023, with an investigation undertaken immediately. It was alleged that the officer breached protocols required when handling a human source, with alleged conduct including that the officer: 

• had a level of contact with the human source described as ‘extreme’, consisting of 1,905 audio messages and 7,413 phone calls between October 2018 and March 2023; 
• recorded only 30% of their telephone conversations with the human source between 3 January 2019 and 13 March 2023, and in 2022, only 28 of 437 hours were recorded, despite policy requiring that all conversations be recorded; 
• disclosed intelligence reports to the human source without authorisation to do so; and 
• left a message for the human source in March 2020 that included details of their sexual history, including leaving a voice message in February 2021 that was sexually explicit and ended saying “I miss you, I love you, I can’t wait to talk to you.” 

The Parliamentary Inspector made findings of serious misconduct that: 

• between early 2021 and early 2023, the officer corruptly used their position with the WA CCC, and resources provided to them, to obtain a personal benefit, being an extensive and intimate relationship with one of the WA CCC’s human sources; 
• the officer took multiple steps to deceive the WA CCC, including adopting a pseudonym and failing to record interactions with the human source; 
• on or before 8 May 2021, the officer provided the first names of three WA CCC officers to a human source, despite this information allowing the human source to identify the officers; 
• on three occasions, the officer disclosed official information to a human source without authorisation to do so; and 
• the officer informed the human source of the name and location of a person that had made an anonymous allegation to the WA CCC. 

The conduct of the officer, who has since been dismissed, was stated to be “extremely serious, potentially dangerous, and involved a gross breach of trust.” 

A series of recommendations were made in the Report, including that: 

• the Western Australian Police Force consider whether the individual should be prosecuted; 
• the Attorney-General consider the need for the Parliamentary Inspector be provided with additional resources, or legal or other options to deal with misconduct, particularly in sensitive and resource-intensive matters; and 
• that the WA CCC consider the utility of the Human Source Team, including whether the service could be delivered in another way. 

The Parliamentary Inspector also requested that the WA CCC provide the Committee with its independent review relating to the misconduct of the officer, and a report on the WA CCC’s plan to prevent and minimise future similar misconduct. 

ACT Integrity Commission (AIC) 

On 5 April 2024, the AIC confirmed that it is assessing the corruption allegations against the Hon Walter Sofronoff KC. Mr Sofronoff KC, a former Queensland judge, headed the ACT Board of Inquiry into the Criminal Justice System (the Board of Inquiry).  

The Board of Inquiry scrutinised the framework for progressing criminal investigations and prosecutions in the ACT, particularly in the trial of R v Lehrmann. The findings were critical of Shane Drumgold SC, the then DPP in the ACT, who subsequently resigned.  

The AIC confirmed that the allegations against Mr Sofronoff KC stem from disclosures he made to media representatives during the inquiry, including a premature release of his report to the media, and communications with media as recently disclosed in the ACT Supreme Court matter of Drumgold v Board of Inquiry and Ors. In this litigation, Shane Drumgold SC requested for the Board of Inquiry’s report, or its decisions concerning him, to be declared invalid or unlawful.  

It is standard practice for the AIC to refrain from confirming or denying the referral or investigation of corruption allegations. However, given the exceptional circumstances surrounding these allegations, the AIC deemed it necessary to disclose its assessment, citing the significant public interest and widespread media coverage of the issues.  

The Integrity Commissioner clarified that the media release does not imply any adverse findings against  Mr Sofronoff KC, however, the appointment of Mr John McMillan AO to assess these allegations underscores the seriousness with which the AIC is approaching the allegations. 

OECD release Anti-Corruption and Integrity 2024 Outlook  

On 26 March 2024, the Organisation for Economic Co-operation and Development (OECD) released its Anti-Corruption and Integrity Outlook (Outlook) for 2024. 

This is the first edition of the Outlook, intended to be released every two years, and was prepared to support OECD nations’ efforts to address corruption and uphold integrity.  

The Outlook draws on data in the OECD Public Integrity Indicators and explores how current global challenges will heighten pressure on anti-corruption frameworks, particularly in areas of weakness. Additionally, the Outlook discusses how deficiencies in anti-corruption systems can impede countries’ responses to these challenges and identifies improvement areas. 

The Outlook includes chapters which focus on a range of areas, including lobbying, conflict of interest, the green transition, artificial intelligence, political finance and foreign interference. 

Key findings 

The Outlook found that OECD countries continue to improve towards the goal of achieving comprehensive anti-corruption and integrity frameworks. However, there are issues with implementation of elements of these frameworks. For example, the OECD found that while most OECD nations have adopted strategic approaches to anti-corruption and integrity, on average, around 33% of planned actions have not been implemented. 

The OECD also commented that many OECD nations are not adequately collecting data regarding the implementation of their anti-corruption and integrity frameworks, which limits the ability to monitor the efficacy of their policies and processes. The Outlook noted that strengthening national data collection efforts is crucial for evaluating existing systems and achieving improvements. 

The Outlook also made several findings in relation to expanding the scope of action in anti-corruption and integrity efforts, such as: 

• it is necessary to be proactive in addressing emerging risks, such as those relating to the green transition, where there is increased engagement between government and business; 
• leveraging artificial intelligence can enhance anti-corruption efforts; 
• OECD nations must urgently consider the risks posed by foreign interference and strategic corruption in their approaches to anti-corruption and integrity; and 
• it is important to adjust policies surrounding lobbying, conflict of interest and political finance policies to safeguard the democratic systems of OECD nations.  

Australian Federal Police 

A joint operation between the Australian Federal Police (AFP) and the Australian Taxation Office (ATO) that forms part of the Serious Financial Crime Taskforce resulted in the seizure of $500,000 from a Sydney based cheque cashing entity suspected of laundering more than $1 billion to facilitate tax fraud.  

It was suspected that the entity was providing false invoicing arrangements to a range of industries. It received business funds in electronic or cheque form and purported to provide goods and services in return, pursuant to fraudulent invoices. Funds were then returned in cash, minus a commission.  

The AFP executed search warrants at seven residential and business properties on 5 April 2024. In addition to the cash seizure, financial documents, electronic devices and mobile phones were taken. The ATO supplemented the AFP operation and made Access Without Notice visits to five sites in NSW and Victoria.  

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Authored by:
Cinzia Donald, Partner (Lavan)
Kelly Griffiths, Partner
Daniel Maroske, Partner
Kathy Merrick, Partner
Jack Tipple, Special Counsel
Anna Fanelli, Senior Associate
Kasia Jaruzelska, Senior Associate 
Gabrielle Shina, Associate
Jin Lim, Lawyer 
Ellie Pitcher-Willmott, Paralegal