Peter Dutton deserves a little sympathy as he indignantly denies any conflict of interest or impropriety over his purchases of banking shares and real estate. Many people always believe the worst of politicians, particularly if there is any suggestion of abuse of position, making money on the side, or personal enrichment.

Dutton has pointed to his high ethical standards, to the fact that he has always disclosed changes in his holdings, and to the improbability of his having any advance or inside knowledge of the Rudd Government’s plans about guaranteeing banking savings at a time when he was in opposition. For some, but not all of these reasons, I believe him. But he has been such a nasty accuser over the years that I wouldn’t be surprised if some didn’t.

Dutton has asserted before that he is a paragon of high standards. After being defeated, first by Malcolm Turnbull, then by Scott Morrison in 2021, he declared that win or lose, he was the more moral man. He said it with a particular glint in the eye that hinted that neither Morrison nor Turnbull were in his class for integrity, though the public was not let in on the basis for this conclusion. That said, I have never seen him enmeshed in obvious conflict of interest in a past in which I have given him little benefit of the doubt. I place great significance on character, but I do not think that racist dog-whistling, or an apparent delight in cruelty to asylum seekers can be said to be ethical, moral or in accord with any conventional mainstream religion.

He is not the only politician whose integrity over business and investment dealings has been criticised over the years. That criticism has come from public records he has created, but merely establishing a theoretical possibility of conflict of interest, insider trading or improper dealings is not enough. I personally think it is wrong, and at the least unwise, for an MP to be a regular investor, because of the wrong impression it could cause. But that’s a standard politicians should aspire to, not one presently in place.

Standards of conduct in Australia have actually improved over time. But they still fall significantly short of standards of which parliament could be proud. That they don’t is because politicians do not seem to want it that way, for no good reason that I can think of. Thus, for example, a politician must declare a purchase of shares, as Dutton did with a 2008 purchase of bank shares at the time of the global financial crisis. But one is not required to disclose how many shares, or at what price. If subsequently, the shares, the house or other investment are sold, the fact of the sale must be disclosed, but the profit, or the change in one’s circumstances (if, say, a mortgage has been discharged) does not have to be declared. It is necessary for an intelligent judgment to be made.

The look of the thing is very important. A wise MP will avoid some behaviour not actually illegal, if only to set an example

In some cases, politicians would have made millions from a share or house transaction, such as the notorious handing out of Comalco shares to Queensland politicians in the 1960s. In other cases, a minor investment may have caused a change in net worth of less than $1000.

Anyone who thinks most politicians are venal might suspect that such a person would be very tempted to do something improper if millions were involved, but be less worried about conflict of interest if only a few thousand were at stake. Even more reason, one would think why the obligation of disclosure was the stronger the greater the sum of money involved. My experience, however, is that many politicians will declare scores of items involving only trivial potential conflicts, while being vague about significant holdings. They will declare membership of bowling clubs, fraternal societies, and umpteen clubs and associations, most of which have been joined only so that the MP will be seen as an active member of the community. The potential for conflict with trusts, farms, trading enterprises and family assets is obvious. But how serious they are depends on value, history and the degree of active management. Conflicts are not always obvious, but those who read the returns should have access to enough information to draw a conclusion. Many politicians on both sides disagree – adding to the general cynicism about the untrustworthiness and trickiness of the whole profession. Some of the information is obscured behind different names, and, in many cases, the trusts or the names are used to avoid tax.

I do not necessarily suggest that trusts exist only for the purpose of minimising tax. But I do think that politicians ought to be particularly careful about the use of such devices, even if others in similar positions are free to do so. It’s the look of the thing. It is not merely a matter of the pub test — though that is relevant — but a question of whether ordinary cynical voters would think it fair that an MP can gain a profit from some taxation avoidance vehicle that would not be available to a person on a salary. We have many rich MPs – I doubt that Dutton with a mere $200 million or so, (according to some commentators) is among the 10 richest. Such wealth might be very handy, whether for harbourside mansions, flash cars, or boarding school fees. But it can be a curse because of the envy it inspires, the cynicism about motives, and the difficulty rich men and women face in pretending to be ordinary folk, to understand general problems, for example about the cost of living, to appear to be “of the people”.

Some think there should be tight limits on what must be disclosed because of privacy considerations. I would not count as a private matter anything politicians, even scumbags, have introduced into political attack. That’s not a very high bar for about half the parliament, including Dutton. But he has drawn it on himself.

MPs, and their wives, are volunteers and have less right to privacy than civilians

Privacy is an issue in the modern day when spouses work and own businesses, and politicians cannot be assumed to have knowledge of any potential conflicts. What right should the public have to know about the shareholdings, dwellings, and businesses of spouses, or children, or others who are not in fact dependent on the politician?

Politics is a game for volunteers, or conscripts. It has yet to be established that we get a better calibre of politician if there is minimal disclosure of assets that might be thought capable of representing a conflict of interest, even if the assets in question are held by a spouse, or child. About 50 years ago, Labor strongly criticised the then Chief Justice, Sir Garfield Barwick, over his dealings with shares on behalf of his own son, and over his sitting on cases in which the outcome could affect the value of the shares. Gareth Evans asked that Sir Garfield stand down in such matters. It was a case which should have gone before the Full Bench, but despite his obvious conflict Sir Garfield thought it a matter he could deal with himself. He then ruled that no reasonable person could think him conflicted because he was acting on behalf of his child, not himself.

His intervention, and probably to avoid the censure of his colleagues (which would have been forthcoming), was strongly criticised. Professor Geoff Sawer, a distinguished constitutional lawyer, wrote in The Canberra Times that in his experience judges would often do clearly improper things on behalf of relatives that they would not dream of doing for themselves.

There has been a long and loving tradition of plain old corruption, bribery and blatant breach of conflict-of-interest rules over the past four centuries in Britain and the US. In the first two of those centuries there was an open trade in paid appointments or royal pensions for those who supported the government. Famous judges, including Sir Francis Bacon, accepted “gifts” from litigants, but often would not stay bought. Politicians and ministers often took kickbacks from government contracts. Even in the present day in England, MPs often work on the side, as consultants to various businesses, and some have been caught asking questions, or conducting paid lobbying campaigns, for clients. In Australia’s 200 years we have built on British traditions, but that would or should be seen as totally corrupt here.

It is also, of course, commonplace in the US. The corruption often extends to effective bribes via donations to political action groups. It has also led to open politicisation of the courts, and the receipt of enormous sums of money by some Supreme Court justices. None of the worst offenders appears to have any shame for how they deal with conflict.

The national and state parliaments in Australia have now established anti-corruption agencies. In theory, parliamentary privileges committees can support their work by investigating compliance with disclosure of conflict-of-interest laws, or other abuses of power and duty. No doubt, standards are thought to be very high, and the parliament is thought to be very focused on ethical behaviour, transparency, accountability and the reputation of the parliament. That devotion may account for the fact that very few politicians or public officials have ever been found to have breached their obligations. In the US, where corruption is often blatant, there have been scores of criminal charges, some by the FBI, and scores more Congressional committees on ethical behaviour, with Congressmen losing their seats and going to jail. In Great Britain, there have been scores of hearings about breaches of disclosure rules, or ethical violations. Again, these have seen parliamentarians thrown out of parliament. Can it seriously be suggested that Australia is a more perfect society because it has better mechanisms?

I do not believe that the level of corruption in Australia is as bad as in the US. Indeed, the advent of the Trump Government has virtually institutionalised blatant corruption and conflict of interest, all the way up to POTUS. Trump is openly determined to punish his enemies and reward his cronies. He has intimidated and sacked judges, lawyers and regulators, and effectively created transactional politics whereby tribute is required from those seeking government favours.

In Australia, an emerging weakness is the lack of effective management of the system of identifying conflict of interest, or even punishment if it is established. Strictly, ministers and other high officials of government report on potential conflicts of interest to prime ministers, ministers and more senior officials. But the public is not told about these potential conflicts, or how they are dealt with. No body of precedent has been established, and the tendency of a partisan system — of defending or excusing the conduct of colleagues — has ruined protection against conflicts as much as it has the once important principle of ministerial responsibility. Investigation and enforcement should be at arm’s length.

Once straightforward understandings of conflict of interest have been confused by self-serving judicial rulings by which judges are examining their own consciences in clear cases of conflict before deciding that no one would think them biased. The judges are all too kind to themselves and over-estimate the respect they and their institution deserve. Amazingly, a good many judges prefer their own interpretation of the appearance of conflict of interest. These have included former Justice Paul Brereton, of the National Crime Commission and Dyson Heydon, once of the High Court, who could not see that addressing a Liberal Party function could and would be perceived as a political act.

Politicians accused of being in conflict of interests are like judges in wanting to be the final arbiters of their own fates. They will declare their complete innocence and suggest that it is a blatantly political accusation. They will call on colleagues to agree about their integrity. They will do their utmost to see that only one side or the other will vote for investigation, then use that outcome to insist that it is all blatantly partisan. Senior leaders of the other side will recognise the dangers and lose enthusiasm for following it through. In many cases, particularly with unpopular politicians, the throwing of mud is sufficient anyway.

Officials should get out of activities with a potential for conflict

Politicians, judges, agency heads and senior officials are well paid. They should be devoted only to their public duties. They should not have other employment or hold academic, recreational or personal appointments capable of giving rise to conflict of interest.

As ordinary citizens, they should be entitled to own houses, cars and other items in reasonable numbers, appropriate to family needs, but not as passive investments. When it comes to other property, including shares, they should realise the cash value of investments and hand the realised value to a blind trustee.

Disclosure statements should be updated within a month of significant transactions. And failure to do so should be prima facie evidence of misconduct. In line with the general principle that governments should not vote themselves powers they do not mean to exercise and enforce, the department of finance should monitor compliance with the requirements and ensure that all disclosures are promptly put online.

It is no coincidence that the bar is set much lower than that. It is not only a matter of the reluctance of politicians to have a genuinely working system. The two big parties do not want to be subject to discipline that means something. This is in much the same manner that party machine people collude to weaken disclosure of election donations.

Even politicians who occasionally get bitten by the watchdogs tend to have reservations about setting higher standards, and a system of checking compliance. That’s because the quid pro quo is passing control from the party system to a more independent, accountable and transparent body. And who would want that? Well, anybody who wants a better class of politician.

https://johnmenadue.com/the-public-is-slow-to-believe-the-best-of-politicians/

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