ICAC under threat of being silenced

Commentators and senior Liberal figures, publicly and privately, questioned whether the country's first anti-corruption commission had been afforded too much power to ruin reputations before allegations of wrongdoing were proven, and even where no allegations had been made.

''We may need to bring it back a bit,'' former Liberal minister Bruce Baird told the ABC of ICAC's powers on the day his son Mike was sworn in as the state's 44th premier.

As a minister in the Greiner Liberal government - which also lost its premier amid an ICAC inquiry, before the corruption finding was overturned by the Supreme Court - Mr Baird snr supported the 1988 bill setting up the commission but said on Thursday it ''trashes people's reputations''.

Herald journalist Peter Hartcher reported on Thursday that federal Coalition figures were furious, with one federal cabinet minister saying privately to colleagues: ''ICAC is a kangaroo court. It's destroying the lives of innocent people. The moment they're named in ICAC, they're finished, even though there is no accusation, no evidence, nothing.''

There are few witnesses who appear willingly before a corruption inquiry: the mere association with an investigation is unwelcome.

But legal experts are unsettled by calls in some quarters for ICAC to hold its hearings in private, as is the practice in some Australian jurisdictions, to spare witnesses the ignominy.

''If you're going to have an anti-corruption commission, you don't want it to go behind closed doors,'' said Adam Graycar, the director of the Transnational Research Institute on Corruption at the Australian National University.

''You'll end up in a Kafka-esque world where they can't name people or where they can't say what the evidence is. They're out there to test things.''

Professor Graycar said ICAC ''gets about 3000 complaints a year. Of those … about seven-tenths of one per cent, virtually none, go to a public hearing''.

The commission makes ''a very clear judgment about what it decides to hear … and it appears the NSW ICAC makes its judgment in terms of what it sees to be in the public interest and in terms of what it sees as its mission''.

Following Mr O'Farrell's shock resignation, the South Australian government reiterated its commitment to holding hearings in private at its Independent Commission Against Corruption, set up late last year.

As a rule, the Victorian equivalent, which goes by the unwieldy moniker the Independent Broad-Based Anti-Corruption Commission, also holds its hearings in private.

Anne Twomey, an expert in public and constitutional law at the University of Sydney, said it was important to bear in mind that one of the NSW commission's statutory objects was to educate public authorities, officials and members of the public about corruption (another is to expose corruption).

''Its most effective role is preventing corruption,'' Professor Twomey said. ''ICAC works best not when it finds corruption but when it actually potentially prevents 100 other types of corruption because people have seen what happened in ICAC.

''That's happened particularly in areas like local government. You might recall the Wollongong [development] inquiry. I'm sure that put the fear of God, or the fear of ICAC, into local government areas all around NSW. If you put ICAC behind closed doors and private, you lose that public education effect.''

Professor Twomey said she sympathised with people who felt their reputations were affected simply by being called to give evidence at ICAC but ''the higher principle is one about maintaining public confidence in the system and ensuring transparency and accountability through that''.

''Let's face it, if people knew, for example, that something had been referred to ICAC and then all they knew in the end was a report comes out saying 'so-and-so is exonerated' or whatever, people would just lose trust in the system.''

It was also important to remember that, as ''harsh as it may seem'', Mr O'Farrell had dug himself into a political hole.

''It's not a case of ICAC finding him to be corrupt or even suggesting he was corrupt,'' Professor Twomey said. ''The problem really lay with Mr O'Farrell saying things that turned out not to be the case … and also by breaching the code of conduct and the pecuniary interests register by not registering the gift [of a $3000 bottle of wine].

''I don't really think that's a good reason for changing the rules in relation to how ICAC operates.''

The resignation of Mr O'Farrell, a vocal supporter of ICAC and who increased its funding to deal with its growing workload, raised the spectre that future Liberal and Labor governments would cut funding to the commission.

Upper house Greens MP John Kaye said ''cutting funding to ICAC would be a coward's response to the most important accountability mechanism in the state''.

''Any government that threatens the financial integrity of ICAC is displaying its intention to allow the worst kind of corrupt behaviour back into NSW,'' Dr Kaye said.

He said ICAC had ''achieved a good balance between public and private hearings'' and counsel assisting the commission, Geoffrey Watson, SC, had ''behaved to the highest standards of his profession''.

''It's not up to ICAC to claim scalps,'' he said, and it had not. As a creature of an Act of Parliament, ICAC's procedures ultimately would be decided by MPs whose conduct it might be called upon to investigate.

The Law Society of NSW wouldn't be drawn on whether it would support all hearings at the commission being conducted in private.

''It's incumbent upon every Parliament to review its legislation,'' said the society's president, Ros Everett. ''NSW has a specific ICAC Parliamentary Committee, which 'monitors and reviews the exercise by the ICAC and ICAC Inspector of their functions'.

''The instrument for review is there. It's for the committee … and ultimately the Parliament to contemplate whether there is now a need to review the ICAC's standard approach to hearing testimony.''