Pork barrelling – the practice of allocating government grants for partisan political purposes – can constitute corrupt conduct, the New South Wales Independent Commission against Corruption has warned, calling for much stricter rules on grants.
In its report on pork barrelling in NSW, Icac said a minister could be engaging in corrupt conduct and open to criminal charges if they engage in pork barrelling.
While the report dealt with the issue of pork barrelling in general terms – it began in 2020 after complaints about the distribution of public money under the stronger communities fund – its findings will be studied carefully by lawyers advising current and former NSW politicians under scrutiny by Icac.
There have also been questions raised in parliament over a range of other grants programs, including community grants, rural grants and sporting grants.
MPs may be facing scrutiny by Icac, which does not disclose its investigations until it holds public hearings or makes a decision.
“In circumstances where pork barrelling is serious and wilful, it may constitute conduct so far below acceptable standards as to amount to an abuse of the public’s trust in the office holder, such that criminal punishment is warranted,” Icac said.
“In issuing this report, the commission intends to make it clear that ministers and their advisers do not have an unfettered discretion to distribute public funds. The exercise of ministerial discretion is subject to the rule of law, which ensures that it must accord with public trust and accountability principles.
Specifically, Icac said pork barrelling could amount to corrupt conduct if the minister influences a public servant to exercise their decision-making powers or urges them to an assessment of the merits of grants in a dishonest or partial way.
Corrupt conduct could occur if the minister applies “downward pressure” to influence a public servant to exercise their decision-making powers in a manner which knowingly involves the public servant in a breach of public trust.
It could occur if the minister conducts a merit-based grants scheme in such a way as to dishonestly favour political and private advantage over merit, and if the minister deliberately exercises a power to approve grants in a manner that favours family members, party donors or party interests in electorates, contrary to the guidelines of a grant program.
Making grants to marginal electorates could amount to corrupt conduct “when this is contrary to the purpose for which the power was given,” Icac said.
Pork barrelling could result in a further breach of the Icac act, if it is conduct amounting to a substantial breach of the ministerial code of conduct, or the members’ code of conduct, or conduct constituting or involving the common law offence of misconduct in public office, Icac said.
However, Icac noted that the principles of public office are not at odds with political reality.
“It should also be recognised that in some areas, such as, in formulating policy, public power may be legitimately exercised in order to satisfy a political objective,” it said.
“A minister may legitimately harbour a hope or expectation of some political (or personal) advantage flowing from their exercise of public power. But they may only legitimately do so if that hope or expectation is in the nature of a ‘side wind’ and not the dominating motivation for the exercise of public power in a manner inconsistent with the public purpose for which that power was granted.”
Icac made 21 recommendations to help prevent or better regulate pork barrelling.
The main recommendation was that whole of government guidelines on grant making should be enshrined in a statutory regulation.
Icac recommended amendements to the NSW Government Sector Finance Act 2018 so that it mirrors the equivalent commonwealth statute and includes obligations that a minister “must not approve expenditure of money unless satisfied that the expenditure would be an efficient, effective, economical and ethical use of the money and that the expenditure represents value for money”.
It recommended clause 6 of the ministerial code of conduct be strengthened and the introduction of pork-barrelling rules – provisions extended to local government to prevent pork barrelling in councils.
Labor’s shadow special minister of state, John Graham, welcomed the report.
“Ministers do not have unfettered power to give grants, but at times in NSW they behave as if they do,” Graham said.
“We want to see an end to the shredding and hyper-politicised grant giving in NSW.”
