AT AUSTRALIA's Customs and Border Protection Service, 2009 and 2010 were good years to be bad. Several state police probes or employee background checks had unearthed nuggets of information suggesting some customs officers who wore the agency's light blue shirt by day were, out of hours, running with outlaw bikie gangs and Middle Eastern crime groups. But there was no corruption watchdog to join the dots. Several years before, the government had decided there was no need for Australia's national anti-corruption agency to stick its nose into customs affairs.
But by 2010, the failure to give the Australian Commission for Law Enforcement Integrity, or ACLEI, jurisdiction over customs was troubling customs chief Michael Carmody. If he had once been slow to see the risks, Carmody, a clever but cautious career bureaucrat, had quickly twigged that his agency's focus on trade facilitation was delivering dividends to drug traffickers, who were exploiting lax border control systems designed to meet the needs of the legitimate importer. The boom in drug importing, and easy money that came with it, also created a serious corruption threat.
By September 2010, Carmody feared he had a problem in his own ranks that he couldn't ignore. But given there was no watchdog to call on and his own internal affairs unit wasn't capable of running in-depth probes, Carmody had few options. For those suspected to be up to no good, it was business as usual.
In January 2011, when the federal government finally granted the law enforcement integrity commission the power to scrutinise customs, Carmody was ready and waiting. Within days, he dispatched a secret list to Law Enforcement Integrity Commissioner Philip Moss. Topping this list were the names of customs officers working at Sydney airport.
According to one source, an integrity commission official told colleagues after analysing the customs information: ''This is going to make our name as an agency.''
But rooting out what was festering inside customs wouldn't be that easy. While the commission had the power to plant listening devices in suspects' cars, tap phones and covertly follow targets, it lacked the manpower, expertise and infrastructure to perform any of these labour-intensive tasks.
The problem that once belonged to Carmody - how to unearth and combat corruption - now belonged to the corruption busting commission.
As the scale of customs' underbelly became clearer, it became apparent that the number of officials that could need investigating might well outnumber the entire workforce of Australia's national corruption watchdog, which in 2011 totalled around 24.
This time around it was the commission's boss who reached out for help. He called on the Australian Federal Police, the Australian Crime Commission and customs to do what the commission, despite its best intentions, could not do alone: run a lengthy investigation into a growing network of suspect federal officials.
In August 2012, more than two years after intelligence about customs corruption began to mount, federal police charged customs officer Paul Katralis with taking bribes while giving drug couriers unhindered passage through the airport (he pleaded guilty this month).
On December 19, within hours of Fairfax exposing the scale of customs corruption - up to 30 officers allegedly involved in drug trafficking, bribery, money laundering or lesser misconduct - the federal government held a news conference to announce a customs reform panel to be headed by former judge James Wood.
A bullish Home Affairs Minister, Jason Clare, told the conference: ''You find corruption when you go hunting for it, and we are hunting for it.''
But many well-placed observers across a range of agencies, including sources close to the integrity commission, say the hunt has long been compromised. Six years after its formation in December 2006, its minimal resourcing means the commission is still unable to run large corruption probes without the help of those it is meant to oversee. And due to jurisdictional limits on how far it can cast its gaze, several other vulnerable agencies aren't scrutinised by any corruption watchdog.
AUSTRALIA'S national graft buster was formed on the run and announced by a press release. It was 2004 and the doyen of Australian investigative journalism, Chris Masters, had just exposed corruption involving two state police officers seconded to the Australian Crime Commission. Within hours, the Coalition government released a one-page missive promising a new watchdog.
According to Professor A. J. Brown, a former employee of the Commonwealth Ombudsman's office and now an academic specialising in integrity in government, the move was ''a totally political, knee-jerk reaction. The rhetoric of what they promised was almost immediately whittled away.''
When the commission began overseeing the Australian Federal Police and Australian Crime Commission in 2007, it had just nine staff and a budget of $2 million.
To justify its minimal resourcing and the initial failure to give it jurisdiction over certain agencies, the Coalition and, from November 2007, Labor have argued that there is no evidence that the Commonwealth has a major corruption problem. This effectively trapped the integrity commission in a catch-22 situation: without more resources, it could not find the corruption that could justify more resources.
Recognising this, in 2007 the commission's interim commissioner, then Commonwealth ombudsman John McMillan, issued a public call for the corruption buster to be given at least 50 staff. The appeal remains ignored.
Now, with an annual budget of $6 million and a staff of about 30 (it averaged 24 last year, with just seven investigators) the commission is dwarfed by its state counterparts. The NSW Police Integrity Commission and Victoria's Office of Police Integrity each have budgets of about $20 million and more than 100 staff. Victoria's new broad-based anti-corruption body will have a four-year budget of $180 million.
Admittedly, these state agencies have greater responsibilities than does the commission, dealing not only with corruption but misconduct complaints and reviews (a remit which has arguably led to expensive and unjustified inquiries).
But the integrity commission's sparse resourcing means it can't fully use its broad range of powers without help. For example, it has to call on state and federal agencies for surveillance operatives. To plant a bug, it does the same. It uses other agencies' phone tapping equipment, which it can monitor from a secure office in its small Canberra headquarters.
Using its coercive powers, in which suspects must answer questions truthfully in a confidential hearing or face jail, is another drain on resources which, until 2011, were used sparingly, albeit to great effect.
In an October 2010 speech, Moss, who replaced McMillan in 2007 as boss, noted that the lack of ''concern or perception on the part of the government of a serious problem with corruption'' in federal law enforcement agencies meant his agency was ''smaller'' and ''cast in a different mould'' to other corruption fighters. But the government's view on its corruption exposure is increasingly under attack, especially in light of the customs scandal.
The chairman of Transparency International in Australia, former federal court judge Roger Gyles, says the notion that federal agencies don't have the same corruption problems or risks as those seen in state agencies simply ''doesn't pass the common sense test''.
Moss, a respected career public servant, says drawing on the federal police and the Australian Crime Commission's organised crime fighting expertise and resources is sensible, given organised crime poses the greatest corruption threat. In this sensitive area, Moss believes megaphone graft busting may be counter-productive. ''ACLEI's focus has been on investigation in private and avoiding the sensationalism that can sometimes accompany public corruption investigations,'' he said in 2010's speech.
In his tenure of almost six years as Australia's chief integrity officer, Moss has never given a media interview (also declining a request for this article), preferring his corruption inquiry reports to speak for themselves. But even his supporters acknowledge that the reports have, to date, said relatively little.
One inquiry dealt with a junior federal police officer in Canberra who engaged in a range of questionable behaviour - including flushing a small bag of ecstasy pills down a toilet rather than properly processing them - none of which was found to be corrupt.
An early integrity commission public report examined the crime commission's sacking of one of its officers, but cleared the agency of any wrong-doing.
Before the customs inquiry, the integrity commission's work had not led to a single criminal charge, although several are believed to be under consideration
By the middle of this year, the commission's staffing should rise to 35 to help deal with the expansion of its jurisdiction to include the quarantine service, anti-money-laundering agency AUSTRAC and criminal database agency CrimTrac. Combined with the federal police, crime commission and customs, it will be overseeing up to 13,500 officers.
Even its increased staffing levels will fall far short of what was called for by McMillan. By 2014, the agency will be about half the size of the 68-member taskforce Victoria Police was running in 2005 to investigate more than two dozen drug squad officers - about the same number of officers who are now under investigation at customs.
Labor MP Melissa Parke, who chairs the integrity commission's parliamentary committee, notes the agency ''is still in the relatively early stages of its development'' but says she ''supports John McMillan's original ballpark assessment of the nature and scale of resources that would be needed''.
Says Parke:''It is logical to say that ACLEI will perform best if it is resourced adequately to carry out its investigative and oversight roles in a timely way and without having to 'borrow' from other organisations to any great degree, especially where those organisations are the ones subject to ACLEI's oversight.''
Brown agrees, saying ''it is extremely hard to see how so few people can maintain and develop the momentum they need to have'', especially in light of the scale of the problems at customs.
While many senior police and corruption watchers agree that the commission is doing a good job as a ''lean, mean fighting machine'', some senior officials who work with it have told Fairfax they believe the agency is (in the words of one) ''seriously undercooked''. Criticism has also come from within.
In May 2011, Moss hired former senior public servant Jeff Lamond to assess complaints from a small number of investigators and secondees about the commission's effectiveness. The agency declined to release the Lamond report or a summary of its findings, stating only that ''the process informed ACLEI's learning and development strategy''.
The commission also said its resourcing is ''consistent with independent evaluations'' conducted by two federal government-commissioned reviews.
Only last month, Moss told Parke's parliamentary committee that he remained ''very reliant on the goodwill'' of the agencies he oversees to give his watchdog support and resources.
One well-informed source says this allows the commission to focus on the ''bigger picture'' while, as in the case of the customs probe, using the federal police to do the heavy lifting.
But clearly the arrangement can have its drawbacks. The commission's inquiry into customs has relied on dozens of federal police, a small number of customs staff and, occasionally, NSW police.
When the seconded customs officials discovered that a potential target was a relative of one of their bosses, now acting chief executive of customs, Mike Pezzullo (who ordinarily would be briefed on all internal corruption matters), extra measures had to be taken to freeze Pezzullo out of the inquiry.
More Chinese walls were built when it was discovered that another customs target was related to a federal police officer. Yet another target was dating a NSW policeman. There were no leaks, but the risks were clear. (To deal with similar risks, the Police Integrity Commission has a rule about never employing local police.)
An unrelated corruption probe overseen by the integrity commission, but which was led by the federal police, used surveillance operatives who once worked with the probe's suspects.
Minimal resourcing has also contributed to a growing backlog of cases. It took the agency until December last year to publicly report on the case of a junior federal police officer who was suspended in early 2010 after his ties to crime figures were discovered months earlier.
''Some issues have been pushed back and are getting a little long because of that, but I have not lost sight of them and I hope to return to them before too long,'' Moss told the parliamentary committee last month.
Australia's leading anti-corruption experts say that even if the commission gets the firepower it badly needs, the nation will still be badly exposed. The Immigration Department, the Tax Office, corporate watchdog ASIC and many other public agencies have no corruption watchdog looking over them. Politicians also face no such scrutiny.
Gyles, Parke and Brown all agree that there is merit in introducing a broad-based national anti-corruption body. But Gyles is far from hopeful, pointing out that even the government's promise to commit to a national anti-corruption plan appears to be a marginal priority. ''There just seems to be a freeze in this area,'' he says.
Even with the small, incoming bump in resourcing that will see it recruit five more staff in July - to a total of 35 - the commission's hold on the title of smallest anti-corruption agency in the nation won't be under any threat for some time.