Former anti-corruption bosses have called the Baird government's changes to ICAC 'scandalous' and 'payback'

ICAC commissioner Megan Latham has been sacked by the NSW government just months after issuing a report critical of Coalition MPs.

NSW premier Mike Baird announced changes to the Independent Commission Against Corruption (ICAC) yesterday in the biggest shakeup for the state’s anti-corruption watchdog since it was introduced by former Liberal premier Nick Greiner in 1988.

The changes were passed in the NSW parliament’s lower house within hours of being revealed, stripping commissioner Megan Latham of her autonomous powers halfway through her tenure.

But the changes have alarmed experts in the fight against corruption in politics, with former commissioner David Ipp and former assistant commissioner Anthony Whealy speaking out against the changes, while Latham issued her own scathing rebuttal of the government’s plans.

Ipp told ABC radio it was “a scandalous move” designed to get rid of Latham and weaken the ICAC.

“It’s outrageous and shameful. This is a means of dampening down the ICAC and removing its powers,” Ipp said, who was ICAC commissioner between 2009 and 2013 before he resigned due to ill health.

During his tenure, Ipp investigated corruption by several former MPs and government ministers, including disgraced ALP powerbroker Eddie Obeid, who in September lost a Supreme Court case against the ICAC and Ipp, in which he claimed his family had been denied procedural fairness

Today Ipp said Baird’s changes, which include replacing Latham with a full-time chief commissioner and two part-time commissioners, will not make the ICAC stronger. Latham has been invited to reapply for one of the roles.

“I think it will be much weaker and will make it much more difficult to operate,” he told the ABC.

“There will be an inability for it to make quick, strong decisions and there’s simply no need for it, the ICAC has never been stronger.”

Former ICAC assistant commissioner Whealy, who is also chairman of Transparency International Australia, called the changes “the worst attack on the fight against corruption that I have encountered”, adding that they did not seem to be justified.

“It will look like payback from a vengeful government,” he told ABC radio.

“If we read about this in a third world country – a public inquiry into politicians behaving badly, donations being made illegally and secretly, a report published and then the government brings forward legislation to get rid of the head of the organisation which published the report and tries to dilute the powers of that person, you’d say … well, same old, same old, it’s corrupt.

Whealy labelled the changes “very wrong and very harmful” with the potential to damage the Baird government.

“The attack on the sitting commissioner and her independence and the watering down of her powers and control of her own organisation are really scandalous,” he said.

“The legislation effectively strips full power away from the chief commissioner and appoints two other commissioners who could be, for all we know, government stooges who would effectively stymie the operation of the ICAC.”

The changes come just four months after an ICAC investigation into prohibited political donations during the 2011 election, Operation Spicer, which saw 10 Coalition MPs stand aside or resign, and cost former premier Barry O’Farrell his job, concluded that senior Liberal politicians Michael Gallacher and Christopher Hartcher acted with the intention of evading the election funding laws.

Gallacher, the former police minister, remains in parliament.

O’Farrell’s resignation, after he failed to recall the donation of a $3000 bottle of Penfold’s Grange, saw Baird become premier.

Baird’s announcement that the government will back the 35 recommendations of a parliamentary committee investigating the ICAC comes following a botched 2014 investigation into NSW deputy crown prosecutor Margaret Cunneen for allegedly perverting the course of justice, and a damning report by ICAC inspector, David Levine, which accused it of acting unlawfully, abuse of power and maladministration.

Levine called for an end to public hearings to “prevent the undeserved trashing of reputations”.

Under Baird’s changes, holding a public inquiry will need to be authorised by the chief commissioner and at least one other commissioner.

The premier says the changes “will deliver a stronger and fairer anti-corruption watchdog”.

But despite the ALP offering bipartisan support for the parliamentary committee’s recommendations, Opposition leader Luke Foley called Baird’s handling of the issue “tawdry and disgraceful”.

“The government is railroading Ms Latham out of a job because she inquired into corruption in the ranks of the Liberal Party.”

Latham issued the following statement yesterday evening following the government’s announcement. She argues that Baird’s proposal does not align with the committee’s recommendations and will weaken ICAC’s investigative abilities.

At 3:30pm this afternoon, the Commission was provided with a copy of the Independent Commission Against Corruption Amendment Bill 2016. The Bill is inconsistent with the need for a strong ICAC and creates a fundamentally weaker organisation.

By significantly altering the structure and governance of the Commission, the Bill represents an unprecedented attack on the independence and effectiveness of the Commission as a leading anti-corruption agency.

The Bill effectively strips the Commission of the authority of a “Chief Commissioner”, and vests significant operational decisions and powers in each of the three commissioners which may be exercised independently of each other.

The most significant practical consequences of the provisions were not the subject of any discussion or submission before the ICAC Parliamentary Committee (or in any other forum) and find no expression in the Committee’s report.

Given that the Bill represents a radical re-structure of the Commission and a complete departure from the constitution and functional operation of the Commission as it was originally conceived, there should have been a broad consultation process that included distribution of a draft Bill to relevant stakeholders, such as that undertaken for the purposes of the Law Enforcement Conduct Commission (LECC), before the introduction of the Bill into Parliament.

The ICAC Act currently provides that a commissioner can only be removed on particular grounds, none of which apply in the present circumstances. This Bill introduces a mechanism whereby any commissioner may be removed from office on the basis of amending legislation which purports to re-structure the Commission.

The Bill provides that upon commencement of the amending legislation, I would cease to hold office as Commissioner. There is no justification for this and none has been suggested. This is a significant matter that was not raised with the Commission by the Parliamentary Committee and has never been raised by the Premier.

The Bill should provide that the person holding office as Commissioner immediately before the commencement of the amending legislation is taken to have been appointed for the balance of his or her term of office as Chief Commissioner.

Structural consequences
The Bill makes provision for each of the commissioners, severally, to exercise all of the powers and functions of the Commission. The only matters that are reserved for the Chief Commissioner are:

     agreement to the appointment of an Assistant Commissioner.
     the actual appointment of the CEO, but only after consultation with the two part-time commissioners
     the appointment of the staff of the Commission, including conditions of appointment
     the appointment of Counsel Assisting the Commission.

The ICAC was established to investigate, expose and minimise corruption in the NSW public sector which includes government departments, statutory authorities, local councils and public officials such as politicians and the judiciary.

With the exception of the decision to hold a public inquiry, each commissioner may independently exercise the Commission’s principal functions and powers relating to investigations, including the assessment of complaints, the decision to investigate a matter, not investigate a matter, cease investigating a matter, the disclosure of information and the furnishing of a report under s 14(2) of the ICAC Act or the furnishing of a public report under s 74 of the ICAC Act.

Also, any commissioner may delegate any of their delegable powers and functions to any officer of the Commission. All commissioners may independently direct the CEO and staff of the Commission, control the resources of the Commission, including make arrangements for the use of services of other government departmental staff. The office of Chief Commissioner is essentially illusory. The proposed subsection 6(6) in the Bill, providing that the decision of the Chief Commissioner prevails in the event of any inconsistency in the decisions of the commissioners, is meaningless and practically unworkable because it assumes the Chief Commissioner is informed of every decision before it is made and that in some way the Chief Commissioner is able to remedy any damage that may be done in consequence of an imprudent decision after the damage has been done.

The functions and powers of the part-time commissioners ought only to be exercised upon the delegation of the Chief Commissioner. Further, the functions of the part-time commissioners ought not be extended to the independent direction of the Commission’s staff, its general and day-to-day operations and resources. Otherwise, the arrangements proposed in the Bill will:

     substantially impact on the efficiency and functioning of the Commission
     fracture the accountability of the Commission and undermine consistency in the Commission’s decision making
     allow each commissioner to adopt independent and potentially inconsistent processes and procedures for the exercise of the Commission’s functions and powers, and
     create a real risk that the Commission will become dysfunctional and internally competitive, by setting each commissioner up as an independent authority for the direction of the Commission’s staff, resources and exercise of powers.

There is no precedent for such a structure or power sharing arrangement for the head of any other anti-corruption commission within Australia or in any other government department or body.

Appointment of Commissioners
The Bill provides that the two commissioners who are not the Chief Commissioner may only be appointed after consultation with the Chief Commissioner.

By contrast, the Law Enforcement Conduct Commission Act 2016 (s 18(2)) provides that the appointment of the two commissioners must only be with the concurrence of the Chief Commissioner. It is not clear why such a provision has been omitted from this Bill.

The need for the concurrence of the Chief Commissioner to any appointment of another commissioner preserves the Commission’s actual and perceived independence given the extensive powers conferred on the two part-time commissioners, is essential otherwise there exists the appearance – if not the reality – of political considerations impacting on the appointment of. It is critical that the Chief Commissioner has complete confidence in the ability of part-time commissioners to fulfil their responsibilities.

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