Australian Journalists Risk Money Laundering Charge

Raids by the Australian Federal Police (AFP) on the Canberra home of Ms Annika Smethurst and the Sydney Headquarters of the Australian Broadcasting Corporation (ABC) have sparked an outcry from journalists, the organisations impacted upon and politicians.  In both cases, which the AFP has stated are not connected, concern the investigation into the leaking of information from the Commonwealth.  Concerns have been expressed about the AFP searching a private home and workplaces occupied by journalists and the need for their sources to be protected.  I wonder, if the AFP was searching for the source of a leak involving the unlawful disclosure of private tax records, social security information or Medicare data pertaining to those journalists and politicians, would their outcry and demand for answers be as strong?  I highly doubt it.

Information held by the Commonwealth Government is owned by the Government and it has an obligation to protect it from unlawful disclosure and misuse. Journalists and politicians cannot have it both ways.  There cannot be two investigative approaches and two standards pertaining to the unlawful release of information.  The person/s involved in the leaks must be found.  From a national security perspective, those involved in the leaking would be potential targets for foreign espionage and criminal cultivation.  If a vigorous pursuit of those involved in not undertaken then other potential leakers would be motivated to unlawfully release information.  And what will be the next leak?  The characteristics and capability of our new Attack class submarines? And if that occurred, would senator Rex Patrick from the Centre Alliance claim that any journalist involved in publishing the classified information, was simply performing their public duty?

In relation to the AFP raid on Annika Smethurst's home, the police were seeking the source of a leak of national security information pertaining to a story she wrote in April 2018. According to media reports, the story written by Ms Smethurst included photographs of government documents. While the ABC raid relates to a series of stories known as the Afghan Files which were broadcast in 2017.  The stories revealed allegations of unlawful killings and misconduct by Australian special forces in Afghanistan and were reportedly based on hundreds of pages of secret Department of Defence documents leaked to the ABC.

Commentary has revolved around the right of journalists to protect their sources.  This article does not address that issue.  Missing from the arguments is the potential criminal liability that could arise to the journalists themselves, their managers and their respective media organisations by their direct or indirect handling of stolen or unlawfully obtained Commonwealth information. Mr David Anderson, managing director of the ABC has been quoted as saying the broadcaster will stand by its journalists and will protect its sources.  Well, if he had knowledge of the nature of the information, as opposed to the source, then a question might arise as to who is going to protect him and the ABC? Because as I will outline below, the issue could easily be about the journalists and their managers and not entirely about the sources involved.

 According to the ABC, Mr Porter the Commonwealth Attorney-General has stated that: "The investigation is not about the journalist per se. It's about the disclosure of information." But potentially it could be.  Under Commonwealth Law an employee of the Commonwealth Government can be convicted of an indictable offence if he or she unlawfully discloses information.  And any person can be convicted of stealing intangible property, which includes information, belonging to the Commonwealth.  There is a Commonwealth offence for receiving stolen property and that offence could be applied to any person receiving intangible property stolen from the Commonwealth.  But no similar offence applies to a person who receives information that has been unlawfully provided by a Commonwealth officer or former Commonwealth officer.  In relation to the offence of stealing Commonwealth property, namely the information, any journalist who received it or handled it, would be in no different position to any person who receives stolen tangible goods.

A little known provision in Commonwealth Criminal Law that is relevant in this argument is the money laundering provisions contained Division 400 of the Criminal Code Act.  The provisions are very broad and have extra territorial reach.  While referred to as money laundering, a more accurate description would be property laundering.

A person commits money laundering if he or she directly or indirectly, deals with money or other property that is either proceeds of crime or an instrument of crime.  Proceeds of crime means any money or other property that is wholly or partly derived or realised, directly or indirectly, by any person from the commission of an indictable offence against a law of the Commonwealth, a State, a Territory or a foreign country.  The Commonwealth offence of receiving stolen property and the unlawful release of Commonwealth information by a serving or former Commonwealth employee would be captured by the term Commonwealth indictable offence. Property under the money laundering provision includes intangible property.  Information held by the Commonwealth, regardless of its security classification, would be intangible property.  This would include the classified documents received and held allegedly by Ms Smethurst and ABC journalists Mr Dan Oakes and Mr Sam Clark.  And it does not have to have been communicated or given to them directly by the person who stole the information or who released it unlawfully.  The act would apply if it was conveyed somehow to them by a third party, no matter where in the world they are located. 

Dealing in money or other property can be undertaken many ways, but for the purposes of this issue, it includes receiving, possessing or concealing of property.  It is a matter for a court to decide if the provision has been satisfied by a course of action.  However, the handling of an envelope or storage device containing classified documents or receipt of an email etc might constitute receiving.  Uploading of the material to another device, computer or the cloud would amount to possessing the items and if the information was later encrypted or password protected or both by a journalist, then those actions might amount to an act of concealment. 

Commonwealth money laundering law has three levels of mental complicity. To satisfy the mental element, a person must have had full knowledge of the facts or was reckless or negligent at the time they were involved in the dealing.  All of these elements would be easy to prove if the documents in question contained security classifications.  The presence of which would alert any prudent journalist that the person releasing the information to them, would not be entitled to do so.  And it is important to note, that the prosecution does not have to prove that the journalist knew if the stolen or unlawfully released information related to a Commonwealth, State, Territory or foreign indictable offence.  The crown only needs to prove that the act of releasing the information was a crime.

There also exists in the money laundering provisions two offences where the prosecution does not have to prove a mental element.  A journalist could be convicted of dealing in property that is “reasonably suspected of being the proceeds of crime”.  Reasonable suspicion would be established by the presence of a security classification supported by other marks for example: name of the department involved.

To ground a money laundering charge, a value for the property must be established, including the provision dealing with reasonable suspicion.  However, Commonwealth money laundering law enables a charge to be laid where the property in question is “any value”.  That section does not apply to the reasonable suspicion provision.  Even a hard copy of a photograph or a printed report has extrinsic value, albeit if it is minor.  Though the prosecutor might argue that the intrinsic value of the documents was far greater and attempt to assign a higher value which would result in a person being charged with a money laundering offence that carries a higher penalty. 

But where assigning a value to proceeds of crime was not possible, an instrument of crime includes any money or property used in the commission of an indictable offence or used to facilitate an indictable offence.  Mobile telephones, laptops, computers, storage devices, etc used by journalists and media organisations to receive, store, communicate and publish stolen or unlawfully obtained Commonwealth information would be instruments of crime.  Any vehicle used by a journalist to meet with any person considering communicating information obtained unlawfully or to receive such information would be an instrument of crime.  A journalist could be prosecuted for money laundering if any of the equipment was used by them to possess or to receive or conceal information stolen or unlawfully obtained from the Commonwealth.

While managers and chief executive officers of media organisations, who are not directly involved in the dealing of proceeds of crime or an instrument of crime could not be charged with money laundering.  They could be liable for aiding and abetting the receiving of stolen property or aiding and abetting money laundering if they had knowledge of the facts or were reckless or negligent, and provided assistance in relation to the dealing in the property.  While not suggesting in any way that Mr Gaven Morris, the ABC’s director of News, was involved in any criminal activity, it is worth noting that the AFP chose to name him in the search warrant.              

Any decision to prosecute any person for money laundering vests in the Office of the Commonwealth Director of Public Prosecutions.  And it is probably unlikely the AFP would consider pursuing any journalist for money laundering or for receiving stolen Commonwealth property.  However, journalists and their managers need to be aware that the Commonwealth has many options available to it, to pursue matters involving the theft or unlawful disclosure of Commonwealth information.  A major function of the AFP is to “safeguard Commonwealth interests”.  It would be a mistake to under estimate the extent the AFP would go to lawfully, to protect those interests.

Chris Douglas is a Director at Malkara Consulting Pty Ltd in Australia. He is a former member of the Australian Federal Police (AFP) for 31 years. Whilst there, he was involved in drug trafficking, people smuggling, human trafficking, corruption, organised crime and fraud investigations. His extensive experience in the investigation of money laundering and in the conduct of conviction based and civil forfeiture based investigations. His experience with investigating money laundering schemes pre-dates the introduction of AML/CTF legislation in Australia.