ATO employs incompetent ACC, again


The Tax Office is again employing the Australian Crime Commission. Last time, it cost Australia a fortune. When will the ATO learn…or do due diligence inquiries before contracting?

ATO employs incompetent ACC, again

Here we go again. Will the Australian Tax Office never learn?

It has contracted the Australian Crime Commission to undertake $2m work over two years (see Crikey report below).

You would think the ATO would look at its own records. The ACC is the body which almost single-handedly destroyed the ATO’s huge, decade-long investigation called Project Wickenby, costing the ATO billions of dollars in outgoings and absence of incomings.

Wickenby was supposed to catch the ‘Mr Bigs’ of tax crime. Remember how they hounded Paul Hogan as a high profile ‘catch’? He won, defeating both the ATO and the ACC. But he was just one of dozens let off the hook by how incompetently the ACC did its work.

Wickenby petered out when the Supreme Court of NSW eventually ruled that the ACC broke the law:   Here’s some of what the court said:

“Supreme Court judge Peter Garling stayed the Commonwealth Department of Public Prosecution case because ‘any trial would not be fair’.

“The Australian Crime Commission had shared evidence with the CDPP (prosecutor), collected under extensive powers. The ACC has special laws in gathering evidence allowing it to skirt the privilege against self-incrimination…

“By making that evidence available to the prosecutor, the ACC took a critical misstep. That act was not authorised by its governing laws, the judge said, and ‘compromised rather than ensured’ a fair trial. A failure to grant a stay would ‘lead to an erosion of public confidence because the court’s processes may lend themselves to oppression and injustice’.

“Justice Garling rejected ACC claims that an ‘administrative oversight’ was to blame. There was no evidence of this, he said, and the close relationship between the two offices suggested ‘an early and intentional decision was made to share all available information’.”

In simple terms, the judge found that the ACC decided to break the law. Its own law. The act under which it operated.

The ACC should have been prosecuted: one or more of its executives should have faced charges. But, in the cosy way government departments and agencies look after each other, it wasn’t charged for breaking the law. Neither were any of its directors.

About the same time, the Australian National Audit Office investigated how well the ACC did its job in the Wickenby probe. Here’s some of what it said:

“ACC investigations were completed in an average 49 months (compared to the planned 18 months), and AFP investigations 36 months (compared to the planned 12 months).

“Operationally, both agencies, but particularly the ACC, could improve elements of their investigation planning and case management, including recording the approval of, and rationale for, critical decisions.

“Major investigation plans generally lacked specific risk assessment and mitigation, and significantly underestimated the resource requirements. The incomplete recording on both agencies’ electronic case management system of key investigation management documents, such as investigation and tactical plans, poses a risk to the effectiveness of investigations, given the complexity and extent of challenge experienced. The ACC’s document management system had substantial functionality limitations for supporting major criminal investigations,

“Of the nine ACC investigation plans assessed: only one specifically addressed risks and identified mitigation strategies; none considered costs; three had been updated; and none were signed and dated or had a record of formal approval.

“The ACC funding allocation has not covered the costs of conducting Project Wickenby investigations. The ACC had spent $47.8 million on these investigations by the end of the sixth year (2010–11), which was 80 per cent more than the total funding allocation of $26.5 million.


So, in other words, the ANAO said the ACC was massively late, planned and managed badly, couldn’t assess the resources needed accurately, didn’t record work properly, and ignored the need for formal approvals and signatures. Oh, and it overspent to blazes, like getting on for double the money allocated.

If that sounds to you like a competent body which the ATO should enter into contract with, it doesn’t to us.

Here is what Civil Liberties Australia said about the ACC early in 2013.

 CLA comments:

Given a choice, Civil Liberties Australia would not employ the Australian Crime Commission, based on what the auditors say above in terms of ACC’s practices, management, following of the rules, sticking to budget and delivering on time.  Would you?

But the ATO has decided to re-employ the ACC. How dumb can the ATO get?

Apparently, the ATO’s due diligence inquiry (if any), before granting the ACC the new $2m contract, overlooked the ATO’s own records of previous partnerships, and the ANAO’s comments.

When – not if – the new ACC work on behalf of the ATO goes pear-shaped, there should be a full investigation into how the ATO came to award this contract.

If the ACC was a private-sector body with a similar track record, the ATO would be incompetent for awarding it a $2m contract, based on the ACC’s appalling record.

And that is quite independent of fact that the ACC engages in scare-mongering and beat-ups, as evidenced by the “Drugs in Sport” vaudeville of its then CEO, John Lawler, in February 2013. That performance managed to do billions of dollars worth of gratuitous and unnecessary damage to Australia’s sporting reputation around the world.

The ACC hasn’t been prosecuted for that either.  All flair and no responsibility might be a good motto for the ACC.

The problem from a civil liberties viewpoint is that we can only access ACC incompetence when something like Wickenby or Drugs in Sport goes dramatically wrong.

But the high likelihood – almost 100% likely – is that ACC incompetence has permeated every aspect of its work over the past decade.

How many people have suffered because there’s no ANAO in the criminal field to check up on whether the ACC is competent, or even acceptable? How many people are in jail, or have suffered massive financial penalties, because the ACC overstepped the mark, broke its laws, or was just plain incompetent?

There is an urgent need for an Australian criminal review organisation (CRO) to review the work of agencies in the crime field – ACC, federal and state police, etc – just as the ANAO is responsible for highlighting incompetence and trying to maintain acceptable standards in the civil field.

Crikey reports:

A note to paranoid tax cheats: they probably are following you. In an historic first, the Australian Crime Commission has entered into a $2 million two-year contract with the Australian Taxation Office to supply static and mobile surveillance to catch out tax cheats.

The new contract appears to have slipped through during the election period without any parliamentary scrutiny.

And it comes as the United States Internal Revenue Service is under increased political scrutiny for conducting secret surveillance on Tea Party-aligned groups, searching and seizing citizens’ digital communications without a warrant and purchasing surveillance equipment – including coffee trays and plants with hidden cameras.

The new ATO surveillance team will be directed towards key focus areas of tax crime, according to statements from both the ATO and ACC  –  Chris Seage

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