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ICAC ruling puts a criminal cloud over ministerial discretion

At least one member of the NSW parliament has twigged to the implications of last year’s conviction of former Labor minister Ian Macdonald for misconduct in public office.

The Liberal Party’s Peter Phelps spelled out those implications on Tuesday in a statement to the state’s upper house that should send a chill down the spine of all current and aspiring ministers, not just in NSW but around the ­nation.

If Phelps’s analysis of the Macdonald case is right, it means exercises of ministerial discretion can very easily be criminalised, even when the use of such a discretion is authorised by law.

The most startling aspect of Phelps’s statement is this: he believes this case means prosecutions of ministers for misconduct in public office do not need to be accompanied by proof of the ­motive for the impugned decision or proof that the minister received a benefit.

At a time when a federal ICAC is being sought by the Greens and their supporters in Bill Shorten’s Labor Party, the Phelps statement is an appeal to sanity.

Just look at what happened in the Macdonald case.

It needs to be kept in mind that Macdonald’s conviction is subject to appeal. He is serving 10 years because, while minister for mineral resources, he created a coal exploration licence for a company, Doyles Creek Mining, that was chaired by former union official John Maitland, who is serving six years for being an accessory.

Phelps told parliament the Macdonald case had grave implications for all ministers and members of the executive.

Before outlining the risk to ministers, he punctured a few myths about this case and he did so by relying on what the jury was told by Supreme Court judge Christine Adamson.

According to ICAC’s Acacia report, Macdonald and Maitland were mates and Macdonald granted the licence to Doyles Creek Mining because it would benefit Maitland.

This is what Phelps told parliament: “What did Ian Macdonald actually get out of it? If he was acting corruptly, what was the material benefit that he received?

“Fortunately, we have Judge Adamson’s summing up to the jury in his criminal case to look at and identify what the motive might have been. She went through the various things that were raised by the Independent Commission Against Corruption, including friendship, political favouritism and money, and basically debunked them all.

“She said that no evidence was adduced that gives rise to any reasonable suspicion in relation to friendship between Maitland and Macdonald, that they were mates or that he owed some sort of affiliation to Maitland for his preselection prior to 2007.

“There is certainly no evidence that money changed hands or was likely to change hands, nor was there nepotism involved in that decision. Essentially, what one has is a motiveless crime at that point. There was no motive that could be ascribed to Macdonald for the awarding of that exploratory ­licence,” Phelps said.

Macdonald has been criticised for disregarding his department’s advice and awarding the licence without going to public tender.

But according to Phelps: “The argument that he ignored departmental advice in awarding the ­licence is completely disproved by the fact that the brief that was sent to the minister had three options, the first of which was awarding the exploratory licence without the need to go to tender.”

Phelps believes this affair has massive ramifications for every exercise of independent discretion by a minister in circumstances where they either do not receive advice from their department or they use their discretion in a way that does not accord with a departmental recommendation.

He is clearly worried about the vulnerable position in which ministers now find themselves when an exercise of discretion becomes what he describes as “an ICAC-able matter”.

“If that is the nature of corruption in this state, then every ­ministerial discretionary decision is immediately up for grabs,” he said.

“The result of the ICAC investigation Operation Acacia and Justice Adamson’s summation to the jury is that you can effectively have ‘corruption’ where you have no motive and you have clear ­advice from the department that the ministerial discretion was ­allowed,” Phelps told parliament.

Once parliament digests this little time bomb, it might need to look into why the Acacia report to parliament was deliberately skewed on the key point of whether the Doyles Creek project should have gone to cabinet.

Parliament was never told by ICAC that it held transcripts of secret evidence in which former Labor premier Nathan Rees said the allocation of a licence for the Doyles Creek project should “not necessarily” have gone to cabinet.

This was due to the fact that the proposal was for a training mine and, according to Rees’s secret evidence, this meant “you wouldn’t expect significant royalties to be flowing from it”.

The transcripts of ICAC’s secret hearings are covered by permanent suppression orders, which mean parliament and the rest of the community has no idea what other evidence this agency kept to itself during and after the Acacia inquiry.

The only reason parliament now knows it was misled about what Rees made of this affair is because Phelps used parliamentary privilege on February 14 to reveal the contents of those suppressed transcripts.

But for Phelps and parliamentary privilege, nobody would have known that this agency of the executive had used the power entrusted to it by parliament to deceive parliament.

The political aspect of this needs to be kept in mind.

To describe ICAC as independent, after what is now known, is simply laughable.

Documentary evidence published last week in this space shows that all these coal inquiries, which focused on the actions of the former Labor government, were not conducted at arm’s length from the Coalition government that succeeded Labor.

Instead of pointing to the changeable nature of Rees’s evidence, and allowing parliament to draw its own conclusions, ICAC massaged the truth. The Acacia report makes no mention of what Rees said in private and praised the former premier after he said in public that the Doyles Creek project should have gone to cabinet.

Rees has declined an invitation to give his side of this story either by providing a written statement or by taking part in an interview. Parliament, however, has an interest in getting to the bottom of how the Acacia report came to be so misleading about the views of this former premier.

Chris Merritt
Legal Affairs Editor

(WTF) Used with permission

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