Operation Keppel

On Thursday 29 June 2023, the Independent Commission Against Corruption (ICAC) released its findings in relation to long-running Operation Keppel. The corruption watchdog has made serious corrupt conduct findings against former NSW premier, Gladys Berejiklian and her now former partner Wagga Wagga MP, Daryl Maguire.

The Operation Keppel Report can be found here: https://www.icac.nsw.gov.au/investigations/past-investigations/2023/former-nsw-mp-for-wagga-wagga-operation-keppel/operation-keppel-investigation-report

In 2017 ICAC commenced an investigation regarding Mr Maguire’s dealings with overseas developers which was extended to include the approval of public grants (using public monies) to a number of organisations and associations in Mr Maguire’s local area. It became evident during the ICAC investigation that Mr Maguire and Ms Berejiklian were in an intimate personal relationship and that she sat on the Expenditure Review Committee or presided over panels responsible for approving the grants. It was stated that Mr Maguire was a “enthusiastic advocate” for the grants.  The report Fact Sheet states:

“The investigation revealed them discussing aspects of Mr Maguire’s conduct that the Commission was investigating and Ms Berejiklian’s participation in grant decisions favoring projects in his electorate. As the investigation progressed, it was apparent to the Commission that her acts and omissions gave rise to questions as to where she had: seriously misused her public offices; breached the NSW Ministerial Code of Conduct; failed to exercise her duty under section 11 of the ICAC Act to report any matter that she suspected on reasonable grounds, or may concern corrupt conduct in relation to the conduct of Mr Maguire; and engaged in conduct that was liable to allow or encourage the occurrence of corrupt conduct by Mr Maguire such as could constitute serious corrupt conduct within the meaning of the ICAC Act..”[1]

Some of the key findings announced on Thursday against Ms Berejiklian was that the former premier had:

  • Breached public trust in 2016 and 2017 by exercising her official functions in relation to $5.5 million awarded to the Australian Clay Target Association in Mr Maguire’s electorate without disclosing her close personal interest with Mr Maguire when there was a conflict of interest between her public duty and her private interest. The ICAC found that this “objectively have the potential to influence the performance of her public duty”.
  • Partially exercised her official functions in connection with funding promised to the Clay Target Association, influenced by the existence of her close personal relationship with Maguire.
  • Partially exercised her official functions in 2018 in connection with millions of dollars in funding promised and awarded for a proposal to build a recital hall for the Riverina Conservation of Music, which is also located in Mr Maguire’s electorate.
  • Engaged in serious corrupt conduct by refusing to discharge her duty under section 11 of the ICAC Act to notify the commission of her suspicion that Mr Maguire has engaged in activities which concerned or might have concerned corrupt conduct.

While it may sound like common sense to members of the public and certainly to long time public servants, the ICAC Report regarding the conduct of Ms Berejiklian highlights the importance of those in public service roles, declaring and managing any perceived or actual ‘conflicts of interest’. This obligation did not cease at any time for the person who went on to hold the State’s highest public service position as Premier of NSW.

Codes of Conduct across all government sectors largely define a conflict of interest as existing when a reasonable person might perceive that your personal interests could be favoured or have influence over your public duties. Conflicts of interest can be:

  • Actual – a conflict currently exists between your work duties and your personal interests
  • Potential – no conflict currently exists, but circumstances do exist that mean there could be a conflict in the future.
  • Perceived – there is not actual or potential conflict, but any reasonable person might perceive or believe that a conflict exists.[2]

Once a conflict of interest is identified it should be declared and managed effectively. It can be difficult to objectively assess (on some occasions) if your own personal interests’ conflict with your work duties, responsibilities and obligations. It is often suggested that “if in doubt, declare”. An example of managing a conflict is removing oneself from any involvement or decision making around matters relating to the public duty or work that the interest involves. The NSW Department of Enterprise, Investment and Trade provides the following advice to avoid conflicts of interest, which is relevant to all public servants and is reflected in other Codes of Conduct:

  • Avoid assignments and tasks that could conflict with your private interests (which you should discuss with your manager)
  • Avoid investments of financial arrangements that could relate to your duties
  • Avoid commercial dealings with suppliers and other stakeholders that are not on a normal arm’s length basis
  • Avoid situations in which professional relationships could develop into personal relationships
  • Avoid social media activities that could be perceived as compromising your impartiality.[3]

The ICAC Operation Keppel Report, makes a series of relevant recommendations following the investigation. Recommendation 2 states:

“That the NSW Parliament, in conjunction with the Commission, develops a comprehensive framework applicable to members that address the avoidance, disclosure and management of conflicts of interest. The framework should provide members with practical guidance about how to avoid, disclose and manage common conflicts of interest.”[4]

Again, while this may sound like a relatively simple proposition, that a framework would exist that assists Members of Parliament to identify, declare and manage everyday conflicts of interest, this investigations demonstrates how the absence of meaningful and accessible guidance can facilitate poor behaviour and flawed governance.   

It may be a timely reminder for Public Sector managers, directors and executive directors to ensure that their staff are aware of their obligations to declare and manage conflicts of interest…and more importantly that they are acutely aware of, and have been trained in identifying, those ‘grey’ areas where it is not always so clear that your personal interest may influence or be perceived to influence your public duties – there is a reason the saying ‘love is blind’ exists.

Author: Luke Naividi, Principal Consultant, is an experienced workplace investigator and lawyer with a strong background investigating allegations of corruption, maladministration, bullying, harassment and sexual misconduct across all levels of government and non-government sectors.      

[1] https://www.smh.com.au/interactive/hub/media/tearout-excerpt/18045/Operation-Keppel-report-fact-sheet.pdf 

[2] https://www.nsw.gov.au/enterprise-investment-trade/policy/conflict-of-interest#:~:text=A%20conflict%20of%20interest%20exists,duties%20and%20your%20personal%20interests.

[3] Ibid.

[4] Investigation into the Conduct of the then Member of Parliament for Wagga Wagga and then Premier and others Report – Vol 2 – Page 332