Australian and NZ anti-corruption bosses embroiled in 'chaos' at ICAC PNG

Australia Broadcast Center

2 days ago

Papua New Guinea's peak anti-corruption body is on the brink of implosion, senior staff say, as its three commissioners, who hail from Australia and New Zealand, level criminal allegations at each other.
The country's Independent Commission Against Corruption (ICAC) began operating in 2023 but has been hamstrung by feverish leadership tensions.
Deputy commissioners Graham Gill and Daniel Baulch have accused commissioner Andrew Forbes of suspected corruption and abuse of power, alleging in a letter that he secretly manipulated ICAC legislation to give himself exclusive power over key agency functions.
Meanwhile, Mr Forbes has referred his deputies to police for alleged misconduct involving the authorisation of travel and accommodation costs.
Several sources have told the ABC almost all the agency's expatriate staff, including multiple Australians, are likely to resign, stripping the organisation of expertise needed to fight corruption.
They have described an environment of "chaos".
One staff member, who spoke on the condition of anonymity, said the situation was "disgraceful" and the organisation had become "completely dysfunctional".
It comes at a crucial time, as Papua New Guinea fights desperately to avoid being grey-listed by an international anti-money laundering and counter-terrorism financing watchdog.
Kerenga Kua, an opposition MP and former head of the PNG law society, told the ABC the paralysation of ICAC was disappointing for PNG, which may lose more than a billion dollars to corruption each year.
"After many, many years of decay and decadence at the hands of white-collar crime … we were looking forward to a bigger, better and brighter future," Mr Kua said.
"The whole thing, the way it's been handled at the ICAC level and at the Appointments Committee level is truly regrettable."
When the ICAC was set up two years ago, there were high hopes it would mark a turning point for PNG in combating corruption.
The commissioners were selected by a group — chaired by PNG Prime Minister James Marape with representatives from the opposition, the judiciary, the Public Services Commission and churches — known as the Appointments Committee.
But things at PNG ICAC turned south when the agency began to investigate its own commissioner, Andrew Forbes, early last year.
"We reasonably suspect that the commissioner has engaged in a course of corrupt conduct," Mr Gill and Mr Baulch wrote in a letter to the Appointments Committee last July.
The next month, ICAC PNG commenced a formal investigation into Mr Forbes, codenamed "Operation North".
The investigation culminated in an arrest warrant being authorised last November, accusing Mr Forbes of abusing "the authority of his office".
Operation North alleged Mr Forbes misused his position to secretly change laws, effectively giving himself exclusive power to probe politicians and public officials, according to a copy of the warrant seen by the ABC.
The warrant said Mr Forbes allegedly changed the wording of key ICAC regulations so that only qualified lawyers could conduct hearings and make orders, directions and summons.
Mr Forbes was the only commission member who fit that description, the warrant said, which meant those changes effectively gave him singular powers and stripped the ability of the deputy commissioners to carry out core responsibilities.
It further alleged that Mr Forbes deliberately concealed the changes to the regulations from the deputy commissioners and other ICAC staff.
The letter to the Appointments Committee also accused Mr Forbes of using his personal email address to message a senior public servant who was being investigated by the commission.
The commissioner did not respond to the ABC's request for comment.
Mr Forbes is a lawyer from Brisbane who was previously a partner at the commercial law firm Turks Legal and has no apparent prior experience in anti-corruption work.
His LinkedIn page states that his areas of expertise include commercial litigation, administrative and regulatory law.
After the arrest warrant was authorised, Mr Forbes obtained a court injunction stopping ICAC and the police from arresting him and conducting investigations into the matter while it was before the Appointments Committee.
Over the weekend, Mr Forbes reported deputy commissioners Graham Gill and Dan Baulch to police for alleged financial misconduct.
The ABC understands Mr Gill and Mr Baulch have since left PNG.
Mr Baulch is a former detective with Victoria Police in Australia and Mr Gill was a senior executive in charge of evaluation, intelligence and corporate affairs at the Serious Fraud Office in New Zealand.
The fraud and anti-corruption squad confirmed it was investigating "serious allegations" related to fraudulent approval of travel and accommodation expenses.
In a written response to the ABC, the deputy commissioners said they believed they had been "subjected to retaliatory behaviour" and that they would strongly defend the allegations".
In a media release, Mr Forbes said he "did not tolerate misconduct at any level" but did not provide further details about the deputies' alleged misconduct.
It is not the first accusation levelled against a deputy commissioner.
In August last year, two weeks after the complaint against him was lodged, Mr Forbes referred Mr Baulch to the Appointments Committee.
He claimed Mr Baulch failed to disclose a prior criminal charge in his application for a PNG visa and other immigration documents.
He also accused Mr Baulch of bullying and harassing Mr Forbes's assistant when she was interviewed by Mr Baulch as part of the Operation North investigation.
The commissioner further claimed Mr Baulch falsely made out he was authorised to approve ICAC requisitions and expenses.
Almost a year since the matters against Mr Forbes and Mr Baulch were referred to the Appointments Committee, no decision has been reached.
Several ICAC insiders have told the ABC they believe the Appointments Committee failed disastrously in its handling of the allegations against the deputy commissioners.
"It's been terribly handled," one source said, speaking anonymously.
"I think if they'd done their job properly then it wouldn't have got to the extent is has."
Peter Aitsi, who chairs anti-corruption organisation Transparency International PNG, said when serious allegations of misconduct are made, the "right thing for individuals to do is step aside".
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Mr Aitsi said an oversight committee should be appointed to resolve the issues as quickly as possible and restore ICAC's functions.
Prime Minister James Marape did not respond directly to the ABC's questions.
In a public media statement, he said the Appointments Committee had asked for a detailed report and legal review to be submitted to PNG's cabinet for consideration.
"Once recommendations are endorsed, cabinet will take swift and responsible action to restore stability within ICAC," he said.
"This institution must not fall. It was created to be a cornerstone in the fight against corruption — not a battleground of personalities and power struggles."
Many are concerned the recent issues within ICAC could worsen PNG's already-bleak chances of being grey-listed by the international anti-money laundering watchdog, the Financial Action Task Force (FATF).
FATF "grey lists" countries it believes have weaknesses in its regimes for combating money laundering and terrorist financing.
The country has already been put on notice by FATF and faces a review in October this year.
Stephen Howes, an economist at the Lowy Institute in Australia, said PNG was grey-listed in 2014 — but removed quickly because it passed legislation the following year to strengthen the anti-corruption framework in the financial sector.
"But now the view is that not enough has been done to implement that legislation," he said.
"The recent ICAC implosion will do nothing to dispel that impression."
Professor Howes said being grey-listed would make it harder for PNG's new banks to operate internationally.
Grey-listing would also be a reputational blow for PNG, which marks its 50th anniversary of Independence in September this year.
Despite the concerns, Transparency International's Peter Aitsi said the PNG public still had a strong belief in the value of ICAC.
"We need to work quickly to reset and restore that trust again," he said.