The Corruption Was Never the Real Scandal

When most people read the latest investigation into the collapse of the Australian Border Force’s secret intelligence unit, they will probably focus on one individual. They will read about allegations of corruption, classified intelligence reports, covert operations, failed oversight and an officer accused of abusing one of the most sensitive positions inside Australia’s border security apparatus. Those allegations are undoubtedly serious and deserve to be investigated thoroughly. But I believe they are distracting us from a much bigger story.

The real scandal is not that corruption allegedly occurred. The real scandal is that we continue to act surprised when corruption appears inside a criminal market that public policy has transformed into one of the most profitable businesses in Australia.

For years, governments have described illicit tobacco as a law enforcement problem. The response has followed a familiar pattern: more raids, more seizures, more enforcement funding, more taskforces, more press conferences and more promises that the next operation will finally get the problem under control. Yet despite all of that, the illicit market has continued to expand.

Today, independent estimates suggest that more than half of Australia’s tobacco market is illicit. Around 95 per cent of vaping products are supplied outside the legal pharmacy system. Billions of dollars in excise revenue have disappeared. Hundreds of tobacco stores have been firebombed. Multiple people have lost their lives. Organised crime groups have become wealthier, more sophisticated and more deeply embedded in Australia’s economy. Now we learn that even the agency responsible for protecting Australia’s borders struggled to protect itself. That should not be viewed as an isolated scandal. It should be recognised as another symptom of the same policy failure.

The investigation describes how the Australian Border Force attempted to transform itself into a more sophisticated intelligence organisation. It recognised that traditional border inspections alone were not enough to combat organised crime because criminal networks had become too sophisticated, too adaptable and too deeply embedded within Australia’s supply chains. The solution was to develop a specialist human intelligence capability.

The idea made perfect sense. Technology can intercept shipments. Scanners can detect containers. Data can identify unusual trade patterns. But only people can tell investigators what is happening inside criminal organisations before the shipment arrives. Human intelligence has always been one of the most valuable tools available to law enforcement.

The Border Force hoped to recruit informants within ports, logistics companies, customs brokers and freight operators because it believed those people could provide intelligence that no surveillance technology could ever uncover. In theory, it was exactly the capability Australia needed. Instead, according to the investigation, it collapsed within only a few years. The allegations against one senior officer eventually became the subject of an investigation by the National Anti-Corruption Commission and the entire capability quietly disappeared.

That timing is extraordinary. The specialist intelligence capability designed to penetrate organised crime was abandoned just before Australia’s illicit tobacco market exploded into one of the country’s largest criminal enterprises. Within a short period, Australia experienced something few people had imagined possible. The illicit tobacco trade became associated with hundreds of firebombings. Retailers were threatened with violence. Businesses were extorted. Neighbourhoods were terrorised. Entire shopping strips became targets. Police forces across the country found themselves investigating crimes that looked increasingly like organised gang warfare. The market the intelligence unit had been designed to infiltrate had grown beyond anything policymakers had anticipated.

That is not simply unfortunate timing. It raises a much more uncomfortable question.

What happens when governments create criminal markets that become larger than the institutions responsible for controlling them?

Every illicit market operates according to the same basic principles. Demand creates opportunity. Opportunity creates profit. Profit attracts organised crime. The greater the profit, the greater the competition. The greater the competition, the greater the corruption. Eventually, violence follows.

None of these steps is unusual. They are predictable.

Australia already had demand. Millions of adults continued using nicotine despite decades of successful tobacco control measures that reduced smoking prevalence. Government policy then dramatically increased the financial reward for supplying that demand outside the legal market. Organised crime simply responded to the opportunity.

This is where the public conversation often becomes confused. Recognising that policy created incentives for organised crime is not the same as defending organised crime. It is recognising how markets function. History repeatedly demonstrates that when legal access becomes sufficiently restricted while consumer demand remains strong, illegal suppliers emerge. Whether the product is alcohol during Prohibition, illegal drugs, counterfeit goods or illicit tobacco, the underlying economics remain remarkably consistent. Ignoring those incentives does not make them disappear. It simply hands them to organised crime.

One of the most revealing aspects of the investigation is its description of the Australian Border Force before the corruption allegations emerged. Despite being presented as a modern border protection agency, it reportedly lacked many of the capabilities required to independently investigate sophisticated organised crime. It depended heavily on intelligence supplied by partner agencies and lacked many of the surveillance powers available elsewhere. It sought to overcome those limitations by developing human intelligence. That decision demonstrates something important. Even the Australian Border Force recognised that intelligence, not seizures alone, would ultimately determine success because large criminal markets are rarely dismantled by confiscating shipments.

Organised crime expects losses. Seizures are built into the business model. Containers are intercepted. Another shipment replaces them. Arrests occur. Another distributor steps forward. One route closes. A different route opens. The profits remain so enormous that the system continues functioning.

The investigation itself provides a powerful illustration. Military conflict temporarily disrupted shipping routes through the Middle East, contributing to higher illicit cigarette prices in Australia. For a brief period, supply tightened. Within weeks, criminal networks had redirected shipments through alternative ports. The additional transport costs were insignificant compared with the enormous profits generated once those products reached Australia. The market adapted almost immediately because that is what profitable criminal markets do.

This is why announcements about record seizures should always be interpreted carefully. A record seizure can represent successful enforcement, but it can also indicate a rapidly expanding market. Without understanding the total size of the market, seizure statistics alone tell us very little.

The same applies to arrests. Arresting individuals is important. Disrupting organised crime is essential. But if the economic incentives remain unchanged, new participants inevitably replace those removed. It becomes an endless cycle of more enforcement, more seizures, more arrests, more funding, more adaptation and ultimately more organised crime, while the market itself continues expanding.

Perhaps the most disturbing implication of this investigation is not what happened inside the Australian Border Force. It is what may be happening elsewhere.

If one of Australia’s premier border protection agencies found itself vulnerable to corruption risks associated with a multi-billion-dollar illicit market, why would anyone assume other agencies are immune?

The investigation discusses trusted insiders within ports. It discusses logistics companies. It discusses customs processes. It discusses civilian agencies becoming increasingly involved in enforcement. Every expansion of an illicit market increases the number of people exposed to extraordinary financial incentives. Most people will remain honest. Some will not. That is not a criticism of individuals. It is an acknowledgement of human behaviour. Every anti-corruption system ever designed accepts that temptation increases as rewards increase. When billions of dollars become available, the risks inevitably increase alongside them.

This is precisely why shrinking criminal markets matters. Smaller illicit markets create fewer opportunities for corruption. Larger illicit markets create more opportunities for corruption. That principle applies whether the market involves tobacco, narcotics, counterfeit goods or financial crime. The product changes. The incentives do not.

Unfortunately, Australia’s tobacco debate rarely focuses on those incentives. Instead, discussions continue as though organised crime exists independently of policy. It does not. Policy shapes markets. Markets shape criminal opportunity. Criminal opportunity shapes organised crime. Organised crime eventually shapes institutions. That final stage is where Australia now appears to find itself.

The Border Force investigation is not simply about corruption. It is about institutional pressure. It demonstrates that the consequences of policy eventually extend far beyond public health. They reach police, border security, intelligence agencies, anti-corruption commissions, ports, transport companies, retailers, insurance markets, local communities and families. Every year the illicit market expands, those pressures become greater.

That is why I believe this investigation represents a turning point. Not because it reveals corruption. Corruption has existed for as long as organised crime has existed. It matters because it exposes something much larger.

Australia has reached the point where the criminal economy created around illicit tobacco is beginning to place sustained pressure on the very institutions responsible for defending the public.

That should concern everyone, regardless of where they stand on tobacco control.

This is no longer simply a debate about smoking. It is no longer simply a debate about taxation. It is no longer simply a debate about vaping. It has become a debate about governance itself.

How large can an illicit market become before it begins eroding the institutions tasked with controlling it?

How many billions of dollars must flow into organised crime before we stop calling these unintended consequences?

How many more agencies will require larger budgets, additional staff and expanded powers before we acknowledge that enforcement alone cannot solve a market whose underlying incentives remain untouched?

The corruption allegations deserve careful investigation. Those responsible should be held fully accountable. But accountability should not stop with individuals. Public policy should also be held accountable for the markets it creates.

Because the greatest lesson from this investigation is not that one officer allegedly failed. It is that Australia continues to ask law enforcement to solve a problem that public policy continues to make larger.

Until that changes, the next scandal is unlikely to be the last.