Who's afraid of a starving watchdog?

As the prospect of a federal anti-corruption commission becomes ever more likely, thanks to the Greens-led strategy of blaming every instance of impropriety by a federal politician or public servant on the absence of such a commission, ACLEI's role will come into sharper focus. As an existing federal anti-corruption commission, albeit highly circumscribed in its jurisdiction, how will it fit into a new anti-corruption regime? Does its performance carry any lessons for how a federal ICAC should be designed and resourced?

Much will depend on a judgment of how effectively ACLEI has performed so far. On this question, the ANAO report avoids direct comment, ruling out assessment of the commission's operational effectiveness as well as comment on the adequacy of its funding. Instead, in line with its usual methodology, the ANAO confines itself to matters of operational efficiency, not effectiveness, concentrating on identifying issues such as identification of relevant inputs and outputs, the appropriateness of performance measures, the prioritisation and allocation of resources, and the use of benchmarks to assess relative efficiencies. Within these limits, however, the ANAO brings together useful information about ACLEI that can help assess its overall effectiveness.

ACLEI has existed for just over a decade. It was established in 2006 to detect, investivate and prevent corruption in law-enforcement, concentrating on serious and systemic corruption. Its original jurisdiction included the Australian Federal Police and the then Australian Crime Commission. Customs and Border Protection was added in 2011 (since incorporated into the Australian Border Force and now the Department of Home Affairs), with further additions in 2013, including AUSTRAC (the Australian Transaction Reports and Analysis Centre), the (eventual) Australian Criminal Intelligence Commission, and certain quarantine-related functions from the Agriculture Department. Of these agencies, Home Affairs (including the Border Force) and the AFP (including ACT Policing) are by far the largest and occupy the bulk of the agency's attention.

ACLEI's main operations consist of investigating instances of corruption arising from its own inquiries or referred to it either by agencies under its jurisdiction or by individuals. When an issue is referred to it, the commission assesses it to decide whether to investigate it and, if so, whether to investigate on its own or jointly with another agency (more than half of the investigations are conducted jointly). In 2016-17, according to its annual report, the commission worked on more than 100 investigations and was instrumental in five successful prosecutions.

ACLEI is a small agency with a budget in 2016-17 of $10.8 million and about 47 full-time-equivalent staff. Though its budget grew steadily over the past decade, including significant increases to meet periodic extensions of its jurisdiction, its capacity is still constrained considering the extent of its jurisdiction. Setting priorities about what cases to pursue and what to turn down is therefore essential. On this point, the ANAO is particularly critical. It notes that, over the last five years, ACLEI accepted for investigation a growing proportion of issues referred to it, up from about 10 per cent in 2012-13 to over 50 per cent in 2016-17. Over the same time, the proportion of investigations begun but not concluded grew correspondingly (in 2016-17, the commission began investigations of 107 corruption issues but concluded only 14).

The obvious result, as the commission recognises, is that fewer resources are available for each investigation. The problem is compounded by a steady increase in the complexity of investigations and the sophistication of corrupt officers, factors that call for more, not fewer, resources per investigation.

The commission is well aware of these problems of stretched resources and, as the ANAO acknowledges, has taken steps towards managing its caseload better. But, in the ANAO's view, more must be done to impose a more rational allocation of resources, which will bring its activities under better control. It suggests a "more structured" review process for individual investigations, including more formal assessments of potential risk and value in each case. It also proposes regular assessment of ongoing investigations to be triggered by pre-set times or milestones.

The commission, while generally accepting the report's tenor, baulked at some of the recommendations. One relates to performance information. The ANAO, consistent with its drive to make all agencies fully adopt the performance framework set out in the Public Governance, Performance and Accountability Act, deplores what it sees as ACLEI's lack of adequate performance measures to indicate whether it is operating efficiently in terms of outputs produced. ACLEI, in turn, is unrepentant, arguing there are no generally accepted measures of efficiency for policing and anti-corruption agencies. It even obtained an opinion to that effect from international consulting firm McKinsey & Company. (This tactic, incidentally, is a depressing indication of the spurious authority attributed to the big consulting firms, which charge large fees for opinions to order. Why should a small, beleaguered agency spend scarce funds on questionable support for an argument that could easily stand on its own merits?)

Another issue of disagreement concerned the ANAO's view that ACLEI should benchmark its performance against that of other anti-corruption agencies. To demonstrate the value of such an approach, the ANAO itself conducted a brief comparison of ACLEI with four other Australian state-based agencies, including three public sector-wide anti-corruption agencies, in Victoria, NSW and Western Australia, and NSW's Law Enforcement Conduct Commission. Comparison over the last three years for which data are available indicate that ACLEI generally took longer over initial assessments (determining whether to proceed with an investigation), though it improved significantly in the last year. In terms of actual investigations, ACLEI has a much lower ratio of concluded investigations to commenced investigations, which suggests less efficiency.

In response, the commissioner, Michael Griffin, cast doubt on the comparisons' validity, pointing out that different anti-corruption agencies operate in different jurisdictions in different ways. "Complete isomorphism" between agencies that would allow unambiguous comparison was unlikely. The rebuttal was a straw-man knock-down, given the ANAO never suggested the comparisons were perfect nor that context was unimportant. One detects a whiff of the usual Canberra disdain for learning anything from analogous state and territory institutions.

Making due allowance for the ANAO's zealotry over performance information, the overall impression is that ACLEI has been struggling unsuccessfully to keep abreast of the demands put upon it. Though this failure may be partly due to inefficiency in imposing priorities, some blame must also fall on successive governments for under-resourcing the agency while steadily increasing its jurisdiction. It is all very well to insist that ACLEI focus only on serious and systemic corruption, as its legislation requires. But without sufficient staff, even that goal becomes elusive. Though the ANAO explicitly avoids comment on the level of ACLEI's funding, it is hard not to draw the conclusion that resources are inadequate.

One can also question an anti-corruption agency's independence when so many of its investigations are conducted jointly with the agency whose staff are under investigation. It is unsurprising that many agencies within ACLEI's jurisdiction (including ACT Policing) prefer its light touch to that of an independent service-wide anti-corruption commission. The royal commission into banking and financial services is providing a strong reminder about the dangers of regulators that get too close to their regulatees under the comforting delusion that scarce resources are better spent cooperating rather than prosecuting.

There is another important lesson here as governments contemplate establishing a federal anti-corruption commission. Such a commission will fuel high hopes of dealing firmly with every instance of possible corruption that comes to light (the latest example being Peter Dutton's intervention on visas for au pairs). Will the new commission have the resources to handle issues that come within its jurisdiction promptly and effectively? How will that jurisdiction be defined? Without sensible limits, the commission's job will be impossible. But every limit guarantees disappointment for those whose complaints are rejected. For the advocates of a federal ICAC, who are now about to achieve their goal, the next important task will be to start dampening expectations.

Richard Mulgan is an emeritus professor at the ANU's Crawford school of public policy. richard.mulgan@anu.edu.au