DR BRYCE EDWARDS, director of the Democracy Project, looks into Kris Faafoi’s entry into the lobbying business within a few weeks of his retirement as a cabinet minister and why this is allowed in New Zealand whereas it is illegal in many overseas democracies…
Probably the most corrupt and broken part of the New Zealand political system is the role of corporate lobbyists influencing policy decisions of governments on behalf of vested interests. This is a group of political insiders – usually former politicians, party staffers or senior Beehive officials – who work at the centre of power and then depart with inside knowledge and networks that they can leverage to help corporate clients influence government policy.
It’s known as a “revolving door” in which corporate interests can prosper through having insiders who move backwards and forwards in and out of the Beehive and other positions of influence. It’s a growth industry in Wellington.
The extraordinary thing is New Zealand is unique in having no regulations on this part of the policy process. Corporate lobbyists profit greatly from a “wild west” setting, in a country where Government decisions are often made to benefit the wealthy.
Researchers such as myself have been calling for tighter rules on this for years, because although the revolving door for lobbyist and political insiders looks corrupt, it’s not actually illegal in this country, and it should be.
Kris Faafoi – a case study of the “revolving door”
This week the Herald broke the story that former Cabinet Minister Kris Faafoi has become a lobbyist, setting up a new firm Dialogue22 just weeks after leaving his Ministerial role in Government. For the last three weeks he has been working as CEO of the corporate lobbying firm.
The new lobbying company is owned by Greg Partington, who has a number of different businesses that connect with politics and political insiders. Another of Partington’s businesses, the communications agency “Tatou NZ” is run by the partner of Cabinet Minister Peeni Henare, Skye Kimura.
Faafoi is now running Dialogue22, even though he departed halfway through the Government’s term in office purportedly to spend more time with his family and get out of politics. He justified the unusual departure by explaining he was “over politics”. And yet he’s now gone straight into a heavily political role.
The new company is advertising itself on the basis of Faafoi’s background and networks. It pitches:
“We know how Government works at the highest level… We know why and how journalists ask questions and we know how to be ready to answer them.” It advertises: “We work with clients to get their perspectives ready to be in front of decision-makers, the public and the media.”
Faafoi’s political experience is being explicitly leveraged by Dialogue22:
“As a former senior Parliamentary Press Gallery reporter, Chief Press Secretary to the Leader of the Opposition, Member of Parliament and Cabinet Minister Kris has networks, understanding of the Government and working experience in the media.”
Faafoi has also given interviews this week in which he boasts of his networks and ability to leverage his political relationships and his political career:
“I’ve been in discussions with some people who’ve been keeping in touch with me and wanted to kind of use some of the knowledge and skills in the process that I’ve built up over those years.”
When challenged about the ethics of this, Faafoi has been reported to have “shrugged” and responded,
“I don’t particularly get fussed about that, you know, people are entitled to their opinions but as I said you leave politics and you have to find yourself a career”.
Why Faafoi’s new position looks corrupt
Faafoi’s two-way trip through the revolving door is utterly brazen. There are no other examples in recent New Zealand political history – and probably no other examples in the OECD countries – of such a short period of time between running government policy to then trying to influence them on behalf of private business.
A number of commentators have explained why it’s a conflict of interest for Cabinet ministers to go straight into lobbying roles. For example, rightwing commentator David Farrar makes the following case for why someone like Faafoi will have privileged knowledge:
“They will have sat in Cabinet and Cabinet committees for every major policy item before the Government. They will know what the Government is planning to do. They will know what the advice from officials is. They will know which Ministers are in favour of something, and which Ministers are sceptical. They will know the areas causing the most concern that would be most vulnerable to lobbying. They will be able to tell clients exactly which Ministers to approach, and what arguments to use – based on Cabinet discussions of these issues. Within their own former portfolios, the conflict is even greater. They will have had detailed weekly briefings on every significant policy initiative in these areas. They will be able to advise clients on the best way to get changes made to these policies, in a way no one who wasn’t the Minister ever could.”
Similarly, leftwing commentator Max Rashbrooke says today:
“Faafoi will have been privy to the most important political discussions in the land, compiling a treasure trove of information. And normally that knowledge is held confidential… the vast majority of the information surrounding such discussions – the arguments made for and against in cabinet, the motivations and positions of individual ministers, the political realities that determine a given decision – is kept under wraps. In particular, confidential public information is not supposed to end up in the hands of commercial interests. With good reason, we do not simply sell information about cabinet debates to the highest bidder. That information is supposed to be used for the public good, not to advance private interests.”
Furthermore, there will now be suspicion that many of the decisions that Faafoi made as Minister could have been coloured by an intention to work for vested interests related to his portfolios. Government ministers, if they are allowed to shift straight to working in the sectors that they have been legislating on or regulating, have a natural incentive to make major government decisions that might help them curry favour with prospective clients.
Rashbrooke elaborates on this today:
“If, while still in post, they spy the prospect of a lucrative corporate afterlife, it is hardly inconceivable that they will start to bias their decisions towards – or at least form overly close relationships with – the firms able to deliver that career.”
New Zealand’s shockingly unregulated rules on lobbying
Democratic countries don’t normally allow political insiders like Cabinet Ministers to shift straight into jobs with conflicts of interests. In every other similar country there is a mandatory “cooling off” period for political insiders after they leave their taxpayer-funded positions. Transparency International recommends a minimum of a two-year period. Below are some examples of the “cooling off” time periods in other countries:
• Australia: 18 months
• European Union: 18 months
• United States: 2 years
• United Kingdom: 2 years
• Taiwan: 3 years
• Canada: 5 years
In addition to these time periods, there are sometimes further restrictions on what private-sector activities political insiders can carry out.
In New Zealand there are no limits whatsoever. We are out on our own in terms of what is considered international “best practice”.
It’s past time for a debate on what those limits should be. Rashbrooke recommends a three-year period – to reflect the parliamentary cycle.
Why Labour isn’t interested in regulating lobbying
There are several commentators calling for the Labour Government to introduce new rules about lobbying and particularly the revolving door. The problem is that it’s not in Labour’s interests to tighten up the rules. At the moment they’re the worst offenders, so why would they want to introduce tighter laws that would impact negatively on themselves?
The current Government has a very close connection with lobbyists, partly because lots of senior staff have moved backwards and forwards into such jobs. For example, corporate lobbyist Neale Jones, who runs the firm Capital Relations, was previously Jacinda Ardern’s Chief of Staff, but left the job in 2017, to immediate set up a lobbying business, utilising his connections in the Beehive.
Soon after Jones departed, Ardern asked another lobbyist, GJ Thompson to come and fill the empty Chief of Staff position for a few months. He was told he could simply “suspend” his lobbying activities at his firm Thompson Lewis, help set up the new government and then go back to working as a lobbyist, taking with him all of his new connections, his inside information on the new administration, and the benefits of having hired half of the new staff.
Industry insiders said that this was a boon for Thompson, who would then be able to charge his clients much more due to his extraordinary connections and knowledge. What should have been a major scandal barely raised a mention in the media.
There are plenty of other lobbyists around the Labour Government profiting from their connections. Neale Jones and Clint Smith, for example, are effectively “the privatised wing of the Labour Party”. Not only do they play a “communications” role of getting the messages from corporations into the Beehive, they also play a central role of getting the Government’s messages and spin out to the public.
No opposition from the National Opposition or the Greens
Don’t expect other political parties to campaign and raise these issues with the public. They are all in a similar situation and therefore it’s not in their interests to blow the whistle or to pressure Labour to reform this part of the political system.
When National was in government last, we saw many similar versions of lobbying and fundraising that match Labour’s. What’s more, many of their MPs and former staff are now lobbying too – some of them work in the same lobbying firms as the Labour-aligned lobbyists. For example, working alongside GJ Thompson in his lobbying firm is John Key’s long-time Chief of Staff Wayne Eagleson.
And if you look at the current National Party you will see a lot of former lobbyists involved – many MPs have backgrounds in “Government relations” for corporates. Chris Bishop was even a lobbyist for tobacco company Philip Morris. And his partner, who has helped run his election campaigns, shifted from working in the Beehive to being a lobbyist.
And there are other parallels to Faafoi’s journey. This year, Simon Bridges left halfway through his parliamentary term, causing a $1.2m by-election for the taxpayer, taking up a role as the head of the Auckland Chamber of Commerce – effectively a lobbying position.
So, MPs and staff in National are also constantly benefitting from being able to freely go backwards and forwards through the revolving door.
Even the Green Party seems to have become more lobbyist-friendly lately. Its own Chief of Staff Tory Whanau recently left to become a lobbyist with the firm run by Neale Jones, and is currently running for Mayor in Wellington with the endorsement of her party.
What can be done immediately about the lobbying problem
There are a large number of regulations that need to be brought in to clean up lobbying in New Zealand. Few politicians are going to be interested in bringing in such legislation and, if they did, it will require a large amount of work and time to make such rules robust and with limited potential for unforeseen consequences, such as limiting the involvement of everyday citizens in lobbying politicians.
However, that shouldn’t stop the public, watchdogs, and the media from scrutinising lobbyists and the revolving door. Some things can be done immediately to improve the situation.
Most importantly, the media need to increase scrutiny of the Government over the involvement of lobbyists in the decision-making process. There might be a tendency for the parliamentary press gallery to avoid scrutinising lobbying activity – perhaps keeping in mind that it’s also common for journalists to go straight into from the press gallery. Journalists often also often free pressured to stay on side with all useful sources of information. But the media need to rise to the occasion on this issue.
The media need to ask the Prime Minister how comfortable she is with a cabinet minister quitting his job to immediately become a lobbyist who will be trying to persuade his former colleagues on behalf of vested interests.
Furthermore, does she set any expectations amongst her ministers and staff that they won’t use their government privileges to leverage lucrative private sector careers in lobbying? There is nothing to stop Ardern establishing a “Code of conduct” for her ministers, staff, or even her MPs that includes an agreement not to become lobbyists in the three years after they depart their jobs.
Perhaps the media has a responsibility to stop using lobbyists so much as commentators or authoritative news sources. In recent times, lobbyists have become a central part of political analysis in New Zealand, as if they are the most authoritative voices due to their links with their political parties.
It’s probably not too long before Kris Faafoi pops up as a media commentator. And, of course, he won’t be described as a “lobbyist” – the media tend to give them job titles such as “PR” or “Communications”.
What is therefore immediately needed is greater transparency. The most important demand that could be made of lobbyists is for full public disclosure of their clients. The problem is that for lobbyists, this secrecy, appears to be a central part of their business model. But it’s one that increasingly looks corrupt.
Others who have written about Faafoi and lobbying
Max Rashbrooke (Spinoff): Kris Faafoi and the revolving door
Karl du Fresne: Is this what we’ve come to?
David Farrar (Patreon): Why Ministers should not be allowed to immediately become lobbyists (paywalled)
- Dr Bryce Edwards is Political Analyst in Residence at Victoria University of Wellington. He is the director of the Democracy Project.