Why is Misuse of Public Office so Serious?

A notable case of misuse of public office is one that recently hit the news. Two men were recently caught out in an illegal activity involving the misuse of a public office. One of the men worked at the Australian Bureau of Statistics and the other worked at NAB.

The men, both in their mid 20s used sensitive information gained from statistics produced by the Australian Bureau of Statistics for some profitable insider training. The mastermind appears to be Lukas Kamazy, a 26-year-old worker employee – now former employee – at NAB. Information he received from his 24-year-old university friend helped him to accurately predict the fluctuation of the Australian dollar in the currency market.

In the months between August 2013 and May this year they had been lining their pockets with $7 million in this way.

Most of the money made its way to Kamay, who shared just $60,000 with his friend for providing the confidential information. Kamay pocketed the majority of the $7 million himself.

Perhaps the pair were not aware that their suspicious trading made them a target for police investigation after suspicious trading was noticed and monitored.

NAB was not involved in the insider trading and unaware that it was happening. They have since sacked Kamay. This was the first time that the ABS had ever had an incident with staff leaking data. Although they have not fired the 24-year-old employee who leaked confidential information, they have suspended him.

A misuse of public office put simply is: when someone who holds a public office uses this position to act dishonestly either for gain or to make someone else suffer loss.

Public officers is a broad category and ranges from politicians, judicial officers, members of the police force right across to anyone who performs work for the government.

Anyone who holds a public office and

• Exercises any influence in their capacity as a Commonwealth official;
• Engages in any conduct in the exercise of their duties as such; or
• Uses any information they used in their capacity

in order to dishonestly benefit themselves or another person or to cause detriment to another person is guilty of an offence, according to section 142.2 of the Criminal Code Act, 1995. This legislation is national so it operates Australia-wide.

The maximum penalty is five years imprisonment.

It is possible to be guilty of this charge even if the person in question has stopped holding their position of public office, if they use any information that they gained while working there to dishonestly gain a benefit for themselves or someone else, or dishonestly causes detriment to someone else.

The maximum penalty is also five years imprisonment.

Like other offences there is a mental element and a physical element. Here the mental element is when the public official commits an act with the intention of inflicting injury or with the knowledge that they don’t have the authority to do so. Reckless indifference is also sufficient.

This legislation is similar to several other offences, such as bribery of a commonwealth official or customs officials taking advantage of their unique position to import drugs into Australia.

Bribing or attempting to bribe a public official, even a foreign public official, are very serious and are considered very serious.

While it is unlikely that a $7 million operation like the one operated by Lukas Kamay would have a noticeable affect on the currency market, it can significantly undermine public confidence.

By virtue of their position, it is imperative that public officials are not supposed to act in their own self-interest but should reflect the responsibility they hold as public servants and acting in a way that furthers the public interest. Activities like insider trading damage the integrity and trust in our financial markets.

Australia does have a good anti-corruption record, but it is important to have strong deterrents to keep it this way.