KEY POINTS:
In the 17 years since its establishment, the Serious Fraud Office has had more than its fair share of critics. According to some, it failed key tests, including the 1990s Winebox imbroglio. Others claim it seized on relatively simple cases to compile an impressive success rate. Thus, there is likely to be relatively little opposition to the Government's decision to scrap the office and give its job to a new specialised police unit, the Organised Crime Agency. That is unfortunate because there is plenty to suggest the SFO should have been retained and strengthened, not dispensed with.
The Government's rationale seems to be that times have changed. Substantial white-collar crime is no longer part of the landscape. And modern fraud, according to Attorney-General Michael Cullen, is so complex, thanks to globalisation, internet and identity access, that the demarcation between it and other forms of organised crime is no longer a clear one. A specialised agency is, therefore, the only way to beat increasingly sophisticated criminal rings.
The Police Association agrees. Its reaction, however, was most notable for its emphasis on what it termed a vacuum in the police's strategic focus. "We are playing catch-up with the gangs, but an Organised Crime Agency working with police has the potential to start to turn that around," said association president Greg O'Connor. Police Minister Annette King reinforced this, saying gangs would be "very much" the agency's focus, although its brief would also cover cyber crime,identity theft, money laundering, extortion, blackmail, fraud and drug making and distribution.
Fraud has never been high on the police's priority list. Given their resources and expertise, it is understandable that crimes involving violence or property have taken precedence. There is nothing to suggest fraud will have much more status in the grab bag of jobs to be tackled by the new agency. Yet it is difficult to attach plausibility to the Government's belief that major corporate fraud is a thing of the past. Indeed, any reduction in its incidence may just owe something to the existence of the SFO. Removing its focus could be viewed as an invitation to those minded to commit fraud.
The problems with the new agency do not end there. It is unlikely to have the special coercive powers that the SFO currently enjoys to obtain information and carry out surveillance. The Government talks of balancing investigative heft with the protection of basic civil liberties. But the omission would be odd, given that the increasing sophistication of criminal rings demands such powers. These may not be needed to tackle gangs but are essential in complex fraud cases. Without them, the Organised Crime Agency could be toothless and ineffective on the rare occasions it ventures into that sphere.
More resources are needed to combat both fraud and organised crime. Those that go to the agency will clearly be directed primarily at gang-related crime. The SFO, for its part, needed reform. Its mandate to investigate and prosecute fraud involving more than $500,000, perpetrated by complex means or affecting the public interest, probably imposed too low a threshold. The office should have been aiming higher, and, in some cases, should have been required to co-operate better with the police.
This could have been addressed simply, and the SFO would have emerged stronger. Scrapping it smacks of a Government keen to be seen to be taking action of some sort. Never mind that the axing of a specialist fraud unit will place the tackling of a particularly difficult type of crime on the backburner.
