When politicians are in bed with vested interests it shapes the world in a particular way. It means that the most powerful and rich in society get their way, and the will of ordinary people is sidelined in a democracy. It means that Governments do the bidding of corporate interests, and political agendas that don’t suit those interests get deprioritised. It means transformational governments start to look very much “business as usual”.
That’s why we absolutely need to know who has the ear of decision-makers. And why, throughout the world at the moment, there is an increased interest in the power of corporate interests in democracies and, in particular, on the oversized influence of lobbyists in the political process.
Here in New Zealand there is a staggering example of corporate lobbying power happening – the employment by Prime Minister Jacinda Ardern of lobbyist GJ Thompson. It’s been an extreme case study in which a lobbyist has been given extraordinary power within a government, access to privileged information and networks, and allowed to continue to utilise this all for the vested interests who pay Thompson’s firm handsomely to get the sort of influence that a lobbyist close to the Prime Minister has.
In the case of GJ Thompson, he was literally a “corporate lobbyist running the government”. As I explained in columns last year, Thompson runs a lobbying firm, and was “seconded” by Jacinda Ardern to come into the Beehive to be her Chief of Staff and help set up the new government – see: The Government’s revolving door for lobbyists and Lifting the lid on lobbying in politics.
The problem was that Ardern hired this corporate lobbyist to come in and run the Beehive, knowing that this would involve choosing the new staff, choosing Cabinet ministers, getting access to all Cabinet papers, and then immediately returning to his lobbying firm where it would be his job to lobby these very same people and try to give corporates the inside advantage on how to influence the new Government.
This would not happen in other parts of the world – certainly not in proper liberal democracies. Such practices are normally outlawed. A conflict of interest of this kind would be labelled “corrupt”.
At the time that the Prime Minister chose to make a corporate lobbyist one of the most powerful figures in the Beehive, the public was told that the conflicts of interest would be appropriately managed. We now know that this wasn’t the case, and you can read about this in yesterday’s expose on the Spinoff website by journalist Asher Emanuel – see: Nothing to declare: new questions in lobbyist-turned-chief-of-staff saga.
This piece of investigative journalism is based on Official Information Act requests which have yielded documents about the details of the lobbyist’s employment in the Beehive and which suggest that no adequate procedures were followed to ensure lobbing conflicts of interest didn’t occur. Yes, some sort of basic contracts to try ensure probity were signed, but they appear lax, and were seemingly not followed in practice.
Emanuel says his investigation shows Thompson “appears to have failed to comply with commitments he made to disclose conflicts of interest on an ongoing basis”. This, he says, raises “questions about a breach of government rules around conduct in the public service.”
Furthermore, the official documents show that Thompson failed to reveal his lobbying clients while running the Beehive: “Neither the prime minister nor Ministerial Services were provided with a list of Thompson’s firm’s clients.”
He comments that: “Without having seen a list of the firm’s clients, and in the absence of Thompson alerting Ministerial Services to any real or potential conflicts related to clients as they arose, it is difficult to see how the prime minister’s office or Ministerial Services could identify or manage any conflict between the interests of his firm’s clients and the interests of the government.”
Not knowing what corporates Thompson was representing while working as the PM’s Chief of Staff, it’s hard to now know if there was a lobbying problem. But Emanuel says: “At least two of the firm’s known clients — Huawei and property developer Darby Partners — seem likely to have had interests affected by government policy.”
Is this a problem? Well, as the article points out, Thompson “had some involvement in the appointment over 100 staff to ministerial offices and access to all Cabinet papers, which range from mundane to critical, and from the essentially public to the literally Top Secret.” And, “After returning to his firm, Thompson’s work would include lobbying the same people he had helped hire.”
Furthermore, the article clarifies that, despite assurances from the Prime Minister that Thompson had resigned from his lobbying firm, the reality was quite different: “Companies Office records show that he did not resign his role as director. A company law expert told the Spinoff it is not possible to take a “leave of absence” from a directorship and that Thompson’s legal duty to act in the best interests of his company would have persisted during his employment as chief of staff.”
Reaction to this story in the blogosphere has been interesting. Leftwing blogger No Right Turn discusses the arrangement and labels it An invitation to corruption. This is not to suggest that anything has been untoward, but that the arrangements mean we won’t know: “While there’s no evidence he behaved corruptly in the role (because we don’t know who his clients were), ignorance isn’t a good enough standard. Our government must not only be honest – it must be seen to be so. And Thompson’s appointment and behaviour simply fails that test.”
The blogger says the Prime Minister and government officials have erred in not protecting the integrity of the political process: “Effectively Ardern and Ministerial Services left it entirely up to Thompson to identify any problems, and he didn’t. Which simply isn’t good enough. With the integrity of our government and political system on the line, I’d expect something a little more proactive – like forcing him to identify his clients, and then firewalling him from anything to do with anything they might be interested in (such as appointments to agencies they lobby).”
The Spinoff’s Alex Braae makes the case that this ongoing controversy should be taken seriously, because although “it could be seen as a minor technical matter”, “it could also be seen as symptomatic of something much wider and more concerning” – see: More questions around lobbyist’s role with Ardern admin.
He points out that Thompson’s privileged position makes him powerful, and asks: “is this how a democratic government should work?” And he’s got a good question for many of those complaining that this is a non-story: “for supporters of the government who don’t see anything to be concerned about with this – would you feel the same way if the PM in question was John Key?”
On Twitter, others have debated whether this should be taken seriously as a scandal. Morgan Godfery (@MorganGodfery) has said: “Usually when people say ‘if John Key did it the left would be outraged’ I shrug but in this case I really do think if John Key did it we’d be calling it corruption. Now we’re just shrugging (including myself, a hypocrite, btw).”
Continuing this point, National Party blogger David Farrar blogs to say: “think if the situation was reversed. Say Simon Bridges became Prime Minister and appointed Matthew Hooton as his Acting Chief of Staff for six months, with Matthew remaining a Director of Exceltium while hiring all the Beehive staff and seeing all Cabinet papers. There would be non-stop media coverage” – see: Imagine the outcry if this was a National PM’s Office.
Today in the Herald, Claire Trevett agrees with this sort of argument: “National-aligned commentators have argued that had National employed one of its friendly lobbyists in the same circumstances, there would have been a riot of raised eyebrows. They are not wrong. Key rode through such criticisms untouched, as Ardern is now doing. Such issues rarely get resonance with the wider public. That does not mean they should be ignored. Nor should they be overstated. All governments have mixed records when it comes to transparency” – see: Labour’s transparency drive falters in dance of many hats.
Trevett is also dismissive of the Prime Minister’s defence of her role in this scandal so far: “The general gist of Ardern’s defence was that Thompson was a mate of hers and so could be trusted. It highlights the difficulty politicians have in applying the ‘if the shoe was on the other foot’ test. They tend to take the assumption everybody will see the ‘other side’ as a bit dodgy, while they can get away with the same thing because they are beyond reproach.”
Jacinda Ardern and authorities are still dodging questions about their role in the arrangements. But Ardern’s main response on the issue is akin to that of John Key’s classic response to scandals, in which he would express that he was “relaxed” about the controversy – it was reported yesterday that she is “comfortable” with the arrangements – see Henry Cooke’s PM Jacinda Ardern says lobbyist chief of staff matter handled appropriately.
The article reports that “Ardern and Thompson are known to be friends.” And Ardern gives her defence about employing a lobbyist friend to run her government: “It’s not easy to find someone who has the level of knowledge and experience, of course Gordon Jon Thompson had worked in this building before and was able to take a short period of leave.”
Cooke also reports on National’s low-key response to the ongoing scandal, saying that Simon Bridges “was quite restrained in his criticism of the matter.” He justifies not campaigning on this issue by saying “National is not going to wade into every situation we see, but it does seem wrong”. Perhaps more importantly, however, the same article points out that “Wayne Eagleson, the former chief of staff to John Key and Bill English, joined the [Thompson Lewis] company after National left government.”
Yesterday, Thompson himself responded to the controversy, putting out a statement to suggest that “any potential conflicts of interests were declared and managed at the time” and that “I took a leave of absence from the firm. The arrangements made reflected the short-term nature of the role” – see Jason Walls’ PM Jacinda Ardern confident a potential conflict of interest with former chief of staff managed appropriately.
This article also reports that “He told The Herald the idea that he hadn’t done everything by the book was ‘erroneous’. Asked if he had declared his clients to Ministerial Services, Thompson did not directly answer the question, only saying: ‘I did what was required by Ministerial Services to manage the conflict’.”
Although the Green Party used to be much stronger on lobbying issues, now that they are part of the Government they have gone quiet. Instead, it’s now Act Party leader David Seymour who is alone in pushing this lobbying issue. He has been asking questions in Parliament – see Zane Small’s Jacinda Ardern facing questions over former chief of staff’s lobbyist role.
Here’s the main point: “Seymour raised the conflict of interest issue in Parliament on Thursday. He asked Ardern why she said Thompson took a leave of absence from his company during his tenure as interim chief of staff, when there’s no record of it. Deputy Prime Minister Winston Peters, standing in for Ardern, replied: ‘On behalf of the Prime Minister, because it was and is a fact’.” Seymour has replied to this, saying “What’s really offensive here, is that the Prime Minister has said, actually he stepped down from those roles, when very clearly he didn’t”.
You can also watch Seymour’s exchange with both Winston Peters and Speaker Trevor Mallard: Question 4 – David Seymour to the Prime Minister.
This article above also cites the Cabinet Manual stating that care should be taken “to avoid creating a perception that representatives or lobbyists from any one organisation or group enjoy an unfair advantage with the government”. It points to the website of the Thompson Lewis lobbying company, which describes the firm as having “considerable understanding of Wellington and its processes, having spent significant time in senior roles in Government and Opposition, and working with the public sector”.
Finally, there’s another side to the story, from someone else with close connections to politicians and lobbyists. Bill Ralston says the “notion that the Government is being led astray by lobbyists insults its intelligence” and that as someone close to “three previous prime ministers” he can report that “there was little evidence that they listened to the well-meaning advice I gave them” – see: Stop kidding yourself, the Govt isn’t falling for spin doctors.