opinion
Paul Murray: Stinging rebuke of CCC’s Craig Peacock probe shows watchdog thinks it’s above the law

The WA parliamentary watchdog established to deal with abuses of power by the Corruption and Crime Commission has delivered a searing rebuke to its boss, John McKechnie, about errors in his agency’s report into former longstanding trade emissary to Japan, Craig Peacock. This column last week raised many of the problems with the 2019 CCC report that Peacock had taken to the Parliamentary Inspector, complaining it egregiously ruined his life. PI Matthew Zilko says he was forced to make public his report to correct errors that McKechnie refused to fix. That’s simply unprecedented. Not only did McKechnie deny Zilko’s reasonable demands for accountability, but the commissioner also refused to respond to media questions about the PI’s strong criticisms tabled in State Parliament on Tuesday. This has now become as big a problem as the original sin. Having had his tenure extended against the wishes of the CCC’s other watchdog, the multi-party parliamentary oversight committee, and knowing the Labor Government was prepared to change the law to force his reappointment, McKechnie gives the appearance of being untouchable. And that’s exactly what those who legislated the checks and balances on the CCC’s awesome powers always feared. It might be going too far to say that Attorney-General John Quigley and former premier Mark McGowan created a monster by overturning the committee’s refusal to reappoint McKechnie, but it’s worth considering. If the McKechnie-friendly reconstituted joint parliamentary committee valued real accountability — it no longer contains the principled Greens MP who opposed the commissioner’s extension — it could have come out publicly after its final meeting for the year on Wednesday and rebuked him for his intransigence. But it was mute. So, like J. Edgar Hoover’s FBI, the CCC is becoming a law unto itself. Most of the limited media coverage of Zilko’s report has focused on the CCC’s unsupported accusations of tax evasion by Peacock. More on that later. But not without first repeating the most pungent lines in Zilko’s report on that issue: “The commission’s explanation to me appears to suggest that in a situation where it does not know whether a person has committed a criminal offence, and where it has not conducted sufficient research to determine the matter definitively, the commission nevertheless believes it is acceptable to speculate publicly that the person has ‘possibly’ committed the offence. “This cannot be regarded as a responsible exercise of its power to report to the Parliament.” It is hard to see how any anti-corruption commissioner could avoid further severe censure from his political masters in a properly functioning system. Zilko’s examination of the principal matter the CCC held against Peacock, which sustained most of its opinion of serious misconduct — the allegedly fraudulent double payment of a cost of living allowance — brings that key assertion into serious question. Zilko says the CCC’s own files disclosed that within days of Peacock being informed of a substantial overpayment by the department managing the Japan trade office, he offered in writing to enter into a repayment plan. “This offer was not taken up, and the report contained no reference to it,” Zilko says. “Mr Peacock’s offer does not prove his claim that the overpayment, amounting to nearly $500,000 over a period of 10 years, was an honest mistake, nor does it negate the commission’s opinion of serious misconduct. “In the commission’s view, Mr Peacock’s proposal to set up a repayment plan was ‘self-serving and a false promise’. That may or may not have been the case (there was no evidence that pointed to Mr Peacock’s state of mind when the offer was made). “However, the offer was relevant to the subject matter of the report, and as such it would have been fair and transparent to include it.” So the PI leaves open the prospect that Peacock’s offer of repayment was genuine with his “may or may not have been the case” comment. That then calls into question whether the CCC rushed to judgment that the offer was self-serving. The PI says the offer does not prove Peacock’s claim of genuineness, but it could be evidence of it. Zilko’s exposé on the non-disclosure of the offer therefore suggests the CCC might have been covering its tracks for an over-zealous approach. But what’s absolutely certain now is that there was no attempt by the CCC to give Peacock the benefit of the doubt. Why? Well, a review ordered by the Public Service Commission into the Government’s handling of Peacock’s COLA points the finger at failures by the Department of Premier and Cabinet. Accounting firm KPMG examines how, until the arrival of the McGowan Labor Government in 2017, DPC ran three of WA’s overseas offices in London, Dubai and Japan and the Department of State Development ran the other five. Under Labor’s Machinery of Government changes to the public service all eight offices ended up in the new Department of Jobs, Tourism, Science and Innovation. “Overall, the review identified that DPC personnel did not consider the supervision of the overseas offices to be a core component of their role and as such their contribution to managing the overseas offices was largely the administration of expenses and employment contracts,” the KPMG report said. “This meant that governance and compliance were not afforded the level of focus they could have been. “Further, the nature of the alleged duplicate claiming of allowances by Mr Peacock was such that a more rigorous review of expenses may have triggered further queries and could have resulted in the matter being identified earlier.” At least KPMG was prepared to state, even after seeing the CCC’s report, that the duplicate claiming of allowances was only “alleged”. The police have since declined to prosecute Peacock over the CCC’s allegations of serious misconduct, leaving the matter as little more than an unsubstantiated assertion. In a response to the KPMG review, then-acting head of DPC, Emily Roper, conceded “the governance shortfalls identified within the report”. KPMG studied the CCC’s report and noted the agency was aware that DPC was “responsible for checking the Japan office’s monthly financial returns to ensure State monies were expended properly”. And KPMG concluded with this telling remark: “However, the report specifically mentions that a question of lack of scrutiny by the DPC is not within the CCC’s jurisdiction.” Why not, if that’s where the impropriety was? Consequently, Peacock was left holding the baby. While Zilko does not dispute the CCC’s opinion of serious misconduct, the handling of the COLA payment — which prompted extraordinary blackguarding of Peacock by Quigley — is one of three areas of the CCC report about which he says “raised substantive concerns for me”. His most serious concerns are about chapter 10, which makes assertions of tax avoidance by Peacock that I examined in last week’s column. The PI also notes that the CCC acknowledged taxation was a matter outside its jurisdiction. But one McKechnie, curiously, was more than happy to pursue. Zilko outlines several comments made about tax avoidance in the CCC report: “Given that tax evasion is a criminal offence, that statement was tantamount to suggesting that Mr Peacock had possibly committed a crime.” This leads to the most remarkable part of Zilko’s report, where he details the CCC’s intransigence in refusing to fix its errors after he established Peacock had not evaded tax. “When my review was complete, I wrote to the commission and suggested that in the circumstances it should table a short supplementary report withdrawing any imputation that Mr Peacock had engaged in tax evasion and acknowledging that he had offered to enter into a repayment plan with the DJTSI,” Zilko says. “The commission did not take up this proposal. Instead, it suggested that I had misunderstood chapter 10 ... “More succinctly, the commission recently emphasised that its focus as regards taxation was, simply, on the ‘many lies’ it alleges Mr Peacock had told about the matter.” But Zilko found they were not lies. He then dismisses the CCC’s rebuttals in one succinct line: “With respect, I do not find this explanation to be satisfactory.” And the PI doubled down, saying that if the CCC’s sole purpose in raising the tax issue was to cast doubt on Peacock’s credibility, it was unnecessary to do so in the language used in the report: “Nor can I find any reason why the report suggested that ‘taxation authorities in Japan and Australia may take an interest in Mr Peacock’s finances’ or why the press release issued on the day of the report’s tabling highlighted his alleged ‘Non-payment of taxes in Australia or Japan since at least 2010’.” That seems to make a case that the CCC went out of its way to blacken Peacock’s name. However, none of Zilko’s argument moved John McKechnie to correct his errors or accept any of the parliamentary watchdog’s criticisms. And that spotlights a powerful government agency that has put itself outside any form of accountability.

opinionPaul Murray: Stinging rebuke of CCC’s Craig Peacock probe shows watchdog thinks it’s above the law

opinion
Paul Murray: Stinging rebuke of CCC’s Craig Peacock probe shows watchdog thinks it’s above the law