Corruption and Crime Commission Inquiry

The inquiry by the Corruption and Crime Commission (CCC) into the lobbying activities of Brian Burke and Julian Grill had all the makings of a great story: the resurrection of a disgraced Premier, a Minister receiving instructions on the floor of Parliament, the rewriting of a parliamentary report at the behest of a mining company, the regular breaching of cabinet confidentiality and the attempted assembling of a cross-factional ‘dream team’ that would extend the influence of the two svengalis into the future. The media impact was heightened by the sensational surveillance tapes – who would seriously ask a Minister “so, how’d Cabinet go?”? – and of course, the sunglasses, Panama hat and dinners at Perugino’s.

And then, as the session of the CCC inquiry entered its final week, things turned weird: the scandal leached into national politics. The media declared that Kevin Rudd’s honeymoon period – in this sound-bite age, a narrative imposed on new leaders unthinkingly – was over. Any contact with the lobbyists was reprehensible and reflected poor judgment on the politician agreeing to the meeting. Senator Campbell, the Minister for Human Services, was sacrificed in the interests of extending the relentless attack against Rudd by a further day or two.

In this atmosphere of relentless personal attacks based merely on associations with an individual, it is worth asking the question: what exactly was it about the activities of Burke and Grill that deserves condemnation? In my view, it is the enrichment of sections of the community through secret deal-making that people are rightfully repulsed by. Bound up in this proposition are three separate components that are defensible, if not necessarily admirable, in isolation: transactional politics, a lack of openness, and the pursuit of private interests. All three components are present when Burke or Grill are engaged by private clients to gain concessions from the government, when in furtherance of this aim they make deals with parliamentarians by drawing down on their factional influence, and when those deals are out of the public spotlight, unable to be scrutinized in the media or parliament.

Lobbying on behalf of private clients is not in itself reprehensible if it is conducted in the full glare of the media and is framed in terms of advancing the public interest. These two conditions are frequently mutually reinforcing. A private organization making a submission to a public inquiry or a parliamentary committee is forced, at the risk of its credibility, to frame its arguments in terms of the common good. If the representations by Precious Metals Australia to Minister Bowler had been made publicly, rather than secretly through lobbyists, the Minister would have been assisted in arriving at a decision that was in the common good and publicly defensible.

Transactional politics is not necessarily objectionable if it is conducted in the open and is in the service of public, rather than private interests. Take the example of the expansion of an airport. All the residents of a city and its surrounding areas benefit from the airport’s increased capacity, but the costs in terms of aircraft noise are necessarily distributed unevenly. Some residents experience direct annoyance at the aircraft noise and indirect loss due to reduced property prices. A government would be unwise to ignore the concerns of local residents and argue simply that the expanded airport benefits everyone. A compensation package negotiated publicly for local residents should be factored in as part of the cost of the expansion project. Of course, it would be cheaper for the government to secretly ‘buy off’ the noisiest residents, neutralizing the political effect of any local action groups. Such a strategy would solve the problem in the short-term at the expense of creating long-term resentment and hostility amongst residents. The ‘divide and conquer’ strategy thereby becomes the issue, rather than the benefits of the expanded airport. The legitimacy of such ‘open transactional politics’ is predicated on the existence of a broader public benefit, for example the efficiently functioning airport. Open transactional politics is less justifiable when the only winners are the shareholders of private companies.

The Burke and Grill saga is a study in closed transactional politics. Their effectiveness as lobbyists depended on their ability to establish networks of patronage within the ALP. While such networks were rooted in existing factional politics, it should be noted that Burke attempted to assemble a ‘cross factional dream team’ of candidates to run for Labor seats¹. This attempt should serve to remind us that it is not factions per se that are the problem, but the way power is wielded within them. In closed transactional politics, decisions are explained by secret deal-making, the amassing and then spending of political capital, and the granting of favours to powerful individuals in the expectation that the favours will be returned at some indeterminate point in the future. When Paul Keating, explaining how Burke and Grill were able to wield such enormous influence, referred to the fact that they were smarter than the rest of the WA Labor Party put together², it is adeptness at closed transactional politics that he is adverting to. Yet Keating’s answer only gets so far: it doesn’t address the question, why the WA ALP?

In my view, a number of additional conditions were necessary for Burke and Grill to operate effectively:

1. Membership of a political party currently in government.
2. A political party with a very small membership as a proportion of the population and an even smaller proportion of members who are actively involved in internal party processes.
3. A political party with factions based on personal allegiances rather than ideological affiliations.
4. A system of government regulation that allows for a high degree of rent-seeking, particularly in the areas of town planning and resource development.
5. A booming economy.

Point 1 is perhaps rather obvious, but it should be remembered that Burke and Grill were allowed to remain members of the ALP despite their connections to the WA Inc scandal of the late 1980s and early 1990s. Neither party rules nor legislation forbade them from being active members of the ALP as well as professional lobbyists. Former Premier Gallop’s injunction against Cabinet ministers associating with Burke and Grill did not have the force of law. As Peter van Onselen has correctly pointed out:

The conflated role of being an ‘independent’ lobbyist and an internal party heavyweight is an inappropriate mix. Links between lobbyists and party organizational involvement on either side of politics should be severed. Links between lobbyists and political fundraising should also be severed³.

Points 2 and 3 are mutually reinforcing. Face-to-face member relations are simply not possible in a political party with a large number of active members. Any internal party divisions are therefore likely to be based on impersonal, ideological attachments. A faction member in such a party is unlikely to personally know everyone else in his or her faction, but could reliably predict their stances on, say, foreign policy, environmental issues, or the causes of poverty. Increasing membership and enhancing opportunities for participation for those members invariably threatens established power blocs within a party. And yet this strategy is the only means by which the grip of patronage politics is likely to be loosened.
Point 4 gives some clue as to why the Local Government, Resources and Environment Ministers became involved with Burke and Grill. Ministerial decisions made within these portfolios have the potential to advantage or disadvantage private organizations to a significant degree, particularly in the context of point 5.

Given the pathologies of closed transactional politics that have been revealed by the CCC inquiry, what alternative visions should guide the behaviour of ministers? I wish to focus, by way of conclusion, on two alternative visions.
The first might be called the ‘Bristol’ model, in honour of a speech given to its electors by that other Burke – Edmund - following his election as their representative in 1774. Referring to the duty of an MP to his electors, Burke declared that:

It is his duty to sacrifice his repose, his pleasures, his satisfactions, to theirs; and above all, ever, and in all cases, to prefer their interest to his own. But his unbiased opinion, his mature judgement, his enlightened conscience, he ought not to sacrifice to you, to any man, or to any set of men living… Your representative owes you, not his industry only, but his judgement; and he betrays, instead of serving you, if he sacrifices it to your opinion.

Much like the standards within a profession, the MP is not to put his own interests before his electors. But unlike members of a profession, Burke is not proposing a relationship of agency: rather, electors entrust their MP to exercise his powers according to his conscience and in the interests of the nation, rather than the parochial interests (the “opinions”) of the people of Bristol. Under the Bristol model, an MP who considers the good of the whole polity, by definition does not think of ‘returning favours’ or ‘building up political capital’ when voting or making decisions. The Bristol model is not necessarily inconsistent with ideological attachments, as it should be accepted that if an issue is in the public realm, there are no ‘right answers’, and if the issue is reduced to its basic principles, that these are bound to be ‘essentially contested’.
The second alternative to closed transactional politics is a variant on the administrative law concept of procedural fairness, or natural justice. This model is underpinned by the idea of giving a fair hearing to all parties, seeking representations from all affected by a decision and having decision-makers untainted by bias or the perception of bias. A Minister who ensures that the decision-making process is governed by these principles, by definition guarantees that notions of ‘returning favours’ or ‘building up political capital’ are removed from the process.

Adherence to the strict tenets of procedural fairness is often not possible in the political realm, but as a general rule, it will increase the quality and legitimacy of decisions. The open transactional solution to the airport expansion problem discussed above is a variant of a process infused with procedural fairness. On the face of it, there was nothing improper about Minister Campbell taking a meeting with a lobbyist acting for a private organization if the meeting was in the context of the seeking of representations from all relevant stakeholders and if the Minister reserved his judgment until all sides of the argument were heard.

In conclusion, I have attempted to isolate what is worthy of condemnation in the activities of Burke and Grill that have come to light in the CCC inquiry. In identifying what I have called ‘closed transactional politics’, perhaps equally condemnatory behaviour can be recognized when cloaked in a different guise – without the long lunches and dark sunglasses, or less glibly, in different political contexts. I have tried to argue that the scandal was not simply the product of two political masterminds – as Paul Keating would have it – but that certain conditions had to be in place for the lobbyists to thrive. And finally, I have offered two alternative visions – the Bristol model and a variant of procedural fairness – that challenge the basis of closed transactional politics.

1. Elizabeth Grosch, “Tapes reveal backroom manoeuvring” The Australian, 2 March 2007, p 2.
2. "Keating criticises ALP over compulsory super plan" The World Today - Monday, 5 March , 2007  12:14:00  https://www.abc.net.au/worldtoday/content/2007/s1863256.htm
3. Peter van Onselen, The Australian, 26 February 2007.