IN NOVEMBER 2009, the internal audit bureau of the Department of Education, Employment and Workplace Relations received alarming information.
It had received an email that claimed a departmental official had tried to solicit a $300,000 bribe from a college for international students that was found to have breached several departmental guidelines.
If the bribe was paid, according to the email, the officer would turn a blind eye to the non-compliance.
The incident has surfaced in heavily redacted internal documents released to the Herald under freedom of information.
But even the scant information provided demonstrates the institutional weaknesses of the Commonwealth government in combating graft.
Unlike states such as NSW and Queensland, Australia's largest public service has no dedicated corruption-busting agency. Instead, allegations such as this are handled internally by auditors or paid consultants.
Warren Strange, the assistant director of the Crime and Misconduct Commission in Queensland, says the lack of independent oversight in such cases is problematic.
''Internal audit is an important function but it is what it is,'' he says. ''It is internal … You're immediately not at arm's length.''
The department's ''internal fraud investigation report'' for the last quarter of 2009 sets out the actions of its internal investigators after they received the email.
First they tried to find ''potential witnesses'' to the solicitation. There was none, of course, because the alleged invitation to conspiracy was made in private.
Then, it seems the investigators went straight to the subject of the allegation: ''Subsequently, IB approached [redacted]'s legal representatives with additional queries on 15 December 2009.
''No response was received by 15 January 2010, and further attempts to obtain information from these sources has been unsuccessful,'' the confidential files say.
''IB also initiated a recorded conversation (non-admissible) with [redacted] where while denying the allegations, [redacted] did note that there were compliance issues outstanding with [redacted, but likely to be the college].''
''Following these processes, it has been concluded that the allegations related to solicitation of a bribe cannot be substantiated to the criminal standard of proof necessary.''
And that was it. End of the investigation.
The case demonstrates two things. One is the limited power of departmental staff to get to the truth of what might be a complex and deliberately concealed scam.
The other is the extent to which the agency made its inquiries. There seems to have been no full investigation of the background of either party involved in the allegations - no company searches, no property searches, perhaps not even any basic online searches.
Crucially, as no referral was made to the federal police, no one accessed any financial records such as bank statements or overseas fund transfers.
Tim Pigot, a spokesman for the department, said it took all such matters seriously but its inquiries had ''found no evidence of any wrongdoing from the DEEWR employee'' in this matter. It was ''therefore not referred to the AFP''.
In fact, agencies have little capacity or appetite for the real gumshoe work.
Two years ago, the then acting assistant secretary of the Department of Immigration, Benjamin Noyen, conceded to a parliamentary committee that there were ''very few cases where you would be able to obtain sufficient evidence to substantiate the allegation … Obviously we do not have powers that allow certain investigative inquiries to take place.''
This is partly why such agencies put limits on the kinds of allegations they're willing even to explore. Immigration's values and conduct team wrote in a memo - obtained by the Herald - to senior officers that cases were not investigated ''where the allegations are from an anonymous source and there is insufficient information or no identifiable lines of inquiry to pursue the matter''.
Another internal Immigration file revealed that if you're a public servant in Canberra under investigation by your employer, you're practically untouchable if you resign.
The same file said the department was ''unable to close the files as 'substantiated' unless a court has found the employee guilty of a criminal offence or a delegate has made a formal determination/finding as to a breach of the code of conduct''.
''In many cases where an employee resigns, whilst the subject of an investigation of criminal behaviour, the matter is generally not pursued by the department following the employee's resignation, except of course in cases of serious corruption or bribery matters.''
Of about 500 internal investigations conducted within Immigration in the past two years, only six matters were referred to the federal police. In the same period, the Education Department referred two.
And in the past six years investigations into almost 1000 federal bureaucrats were terminated because they resigned midway through the inquiry. Internal audit documents also show some agencies do not take a bloodthirsty approach to investigating misconduct.
Another confidential Immigration file states that ''active discovery such as through internal controls, auditing and data analysis is infrequent'' and instead the agency ''relies on passive discovery of misconduct''.
The executive director of corruption prevention at the Independent Commission Against Corruption in NSW, Robert Waldersee, says such ordinary auditing will often fail to pick up a scam that has been deliberately concealed.
''Internal audit may find documentation does not match up or there's been a breach of compliance …
''Such findings may indicate corruption and should lead to further investigation.
''But if the documentation is in order, then audit will not find anything. Faked documents, favouritism, friendships or commissions will not be detected.''
Do you know more?
investigations@smh.com.au
