Bryce Edwards: Should we worry about lobbyists’ influence on the Government?

Bryce Edwards: Should we worry about lobbyists’ influence on the Government?

In many other parts of the world, the close relationship between our Prime Minister and a leading business lobbyist would be considered corrupt, but in New Zealand it’s seen as “business as usual”. Does that make it right? Is it in the public interest to have the politicians and lobbyists in each other’s pockets?

The most important case study of the New Zealand lobbying-politician nexus has become that of Prime Minister Jacinda Ardern’s relationship with lobbyist GJ Thompson, who she hired for five months last year as her Chief of Staff. They are friends, she has huge trust in him, and she continues to use him as a confidante.

Her trust in Thompson is so great that Ardern reportedly involved him in choosing who to give ministerial roles to. That’s right, a lobbyist was involved in choosing who became ministers in this government and what portfolios they got. And he got paid for it. Months later he went straight back to his role as a director of his lobbying firm, free to lobby those very same ministers.

In other countries – even in Trump’s Washington – this would almost certainly result in jail time. If you think that’s hyperbole, consider the scandal if we were suddenly to learn that Trump’s first Chief of Staff, Reince Priebus, had been a director and shareholder of a lobbying company drawing income from foreign and domestic clients, not disclosed to the President, while working in that role.

In contrast, here in New Zealand, anything goes. Most of the media turns a blind eye to it all, or even gives their stamp of approval to the existence of these relationships, often because the individuals involved are likable and “trustworthy”.

The particularly brazen relationship between lobbyist GJ Thompson and the Prime Minister has been examined in a new article by Newsroom’s Laura Walters, published a few days ago. It raises some important new information about the continued power of that lobbyist, by virtue of his close links with Ardern – see: Questions over relationship between PM and lobbyist.

The most important revelation to come out of this article is that when Thompson came in to help run Ardern’s government, management of his potential conflicts of interest didn’t seem to occur, despite him remaining a director of his firm Thompson Lewis.

Normally, the most basic attempt at managing these conflicts is for full disclosure to be made of any clients a lobbyist might have. But the PM’s Office confirms that the opposite actually took place: “The Prime Minister and Mr Thompson apply their rule strictly to never discuss his clients or his business”.

As an example of this, Walters reports: “it’s understood the Prime Minister did not know Huawei was a client of Thompson Lewis until her office was approached by Newsroom.”

On Friday, 1News reported Ardern’s explanation of her relationship with Thompson. The PM confirmed the lobbyist is a friend and that she doesn’t check who his clients are: “This just happens to be a case of New Zealand being small and I have an old friend who works in his own company… I already know that GJ works alongside companies external to Government. I don’t know, by in large, what those companies are” – see: Jacinda Ardern’s links with high-powered lobbyist ‘a case of New Zealand being small’.

Ardern also says Huawei is “not even a company I had any familiarity he was working with”, and “New Zealand is a small country, there will from time to time be overlap. The important thing is that we manage ourselves those conflicts. I do not discuss… nor does he discuss with me, his clients’ issues. That would be totally inappropriate.”

This is an even less convincing assurance than at the time I last covered Thompson’s controversial role in the PM’s Office in my Political Roundups last year – see: The Government’s revolving door for lobbyists and Lifting the lid on lobbying in politics. Then, the public was told that the conflicts were being “managed”. But we are now told the PM has never known who Thompson’s clients were and are, which makes this impossible. So, for example, the public might now wonder if the Prime Minister discussed relations with China, and whether Thompson passed those details onto Huawei.

Although at the time the Prime Minister’s Office claimed Thompson had temporarily stepped aside from his lobbying firm to help run the government, crucially he remained a director and shareholder of Thompson Lewis when he was Chief of Staff, with a legal obligation to act in the best interests of the company and with a legal claim on its profits.

The decision by Ardern to use a lobbyist as her most important paid adviser was always a massive problem, even with him claiming he would stand aside from his lobbying roles. You simply cannot take “leave” from these roles. And he and his mobile number remained advertised on his firm’s website as a lobbyist, while he was also Chief of Staff.

So while the Chief of Staff was apparently advising on the appointment of the Cabinet and staff, and possibly had access to all government documents from the likes of Treasury, DPMC, MFAT, SIS etc, his firm retained and profited from private clients, including foreign ones such as Huawei.

Responding to these latest revelations, senior investigative Herald journalist Matt Nippert (@MattNippert) has tweeted that “This is honestly jaw-dropping”. He asks if the Prime Minister’s Office is “really saying ignorance is a defence when handling conflicts of interest? The lines need to be clear if you don’t the Prime Minister wandering over them.”

Furthermore, Nippert complains that the Cabinet Manual, in terms of conflicts of interests, “now doesn’t seem to apply to the PM for some reason.”

Laura Walters, has also gone on RNZ to talk about why issues around lobbyists should be taken seriously: “When you’ve got your firm taking on a really sensitive client that is actively courting meetings with ministers and trying to make some big moves in there, trying to influence decisions of those ministers of the government, it does really raise some questions – especially around the disclosure of clients” – you can listen to her 10-minute discussion with Emile Donovan: PM’s connection to lobbyist raises flags.

Donovan suggests that “Someone who has worked closely in terms of actually setting up a government would be a lobbying company’s golden goose”, to which Walters says, “Absolutely”.

Walters’ article also reports on what others in the lobbying industry say about Thompson’s ongoing close relationship with the Prime Minister, with one lobbyist labelling it “totally unprecedented”. Walters reports that “Those in the industry say he is open about the influential role he played in helping pick cabinet ministers and their staff.”

She says that “in reference to the ongoing relationship, and Thompson’s movements between the Beehive and his Auckland office” other lobbyists are uneasy. Although others seem to like and trust Thompson, the lack of rules and procedure in these types of close lobbyist-politician relationships weren’t enough, “especially when it came to transparency and avoiding unwanted accusations of corruption.”

The Prime Minister’s Office responded to concerns raised by Walters about Thompson, saying that “Mr Thompson does not offer any professional advice to the Prime Minister, however like many of her long-term acquaintances, the Prime Minister seeks out Mr Thompson as a sounding board from time to time”.

Herald political editor Audrey Young included Thompson in her profile of “the special crew that Prime Minister Jacinda Ardern turns to most often” – see: Meet Jacinda Ardern’s inner circle – the people she relies on most (paywalled).

Here’s Young’s entry about Thompson: “Gordonjon (GJ) Thompson was a press secretary for Helen Clark at the same time that Ardern worked for Clark, but their relationship was forged in Opposition when Ardern was a first-term MP.  Thompson had moved with Labour to Opposition in 2008, first as Phil Goff’s chief press secretary and later his chief of staff.  He left to take up public relations roles with Fonterra and Sky City then set up his own PR company with David Lewis, another former press secretary to Helen Clark, and later Wayne Eagleson, the long-serving chief of staff to former Prime Minister John Key. Thompson spent five months as Ardern’s chief of staff in the early days of Government, helping with the transition to Government before deciding to return to Auckland to run Thompson Lewis.”

Some in the media agree with the Prime Minister that there is no need for questions to be asked about Thompson and the unregulated nature of New Zealand’s lobbying industry in general. For example, on Saturday the Dominion Post published an editorial in support of Ardern and Thompson – see: Lobbying – trust in the system, but maintain a close watch. The editorial says Thompson’s relationship is on a par with “almost five million lobbyists in this country” and we are all free to see MPs and “chew their ears” on issues we feel passionate about.

However, there is likely to be ongoing concern about the precedent set by Ardern in the various ways she has utilised her lobbyist friend. As an example, on the Reddit social media site, one person with apparent expertise in handling potential conflicts of interest discusses the Walters article, and argues that it should be investigated by the Auditor General – see: Questions over relationship between PM Jacinda Ardern and high-powered lobbyist.

That person also explains what measures should have been taken when the lobbyist was employed by Ardern: “As a minimum I would expect to see: A list of all clients he represents; A risk assessment of where those clients deliver to government and to what portfolios; A review of the work he was doing; A management plan; A deed of confidentiality for him and his company; A plan detailing how he could firewall information (which in reality he couldn’t). The acid test for COI is really is there a fiduciary interest and since he is being paid by his clients to lobby there is one.”

Finally, there is some good news about lobbying transparency, with the release last week of the first batch of records of who ministers have been meeting with. For the best coverage of this, see Tim Watkin and Kate Newton’s Ministerial diaries: Who influences those in power? It’s worth noting that one of the lobbyists who “stands out” as meeting with Ministers more than most is “former press secretary for Helen Clark, David Lewis”, who is the business partner of GJ Thompson.