Gabriel Makhlouf has a mixed record as Treasury Secretary but was widely viewed as unflappable. Photo / File
Gabriel Makhlouf has a mixed record as Treasury Secretary but was widely viewed as unflappable. Photo / File
COMMENT:
Invitations went out this week from the Beehive for an exclusive farewell for Gabriel Makhlouf, who departs the Treasury on June 27 to take up the plum role of governor of the Central Bank of Ireland.
On the guest list are former National Cabinet ministers who dealt with Makhloufduring their period in Government. He served them as Treasury Secretary from 2011 to 2017.
Others who would be natural candidates for the invitation list include current National leader Simon Bridges, significant players from the Wellington beltway firmament, and Prime Minister Jacinda Ardern joining host Finance Minister Grant Robertson.
It is the first time that "tout Wellington" will turn out to send off a Treasury Secretary who is the subject of a current State Services Commission investigation.
That this will add a certain frisson to the celebratory event is an understatement.
Some believe the department was dumbed down under his period as chief executive and that a more single-minded focus on productivity, for instance, would have done more to underwrite the nation's living standards than a wellbeing framework. This is a view I share.
Some Treasury observers feel that Makhlouf rather too obviously left the impression he was the "smartest guy in the room". But irrespective, he was viewed by ministers as unflappable.
Which is why there is such intense interest in how a top bureaucrat, on track to be a major player in European central banking, has come unstuck at the apex of his career.
The inevitable side talk at the Makhlouf soiree will not just be focused on the Treasury Secretary's inexplicable shortcomings.
Finance Minister Grant Robertson. Photo / File
It is now very clear indeed that if the commission's inquiry is to have integrity, the actions of others — apart from Makhlouf — should be considered, particularly if natural justice is to be seen to be observed.
Yesterday it became obvious that the giant short the Beehive has sunk under Makhlouf's career has backfired, putting Cabinet ministers squarely in the frame for failing to reveal earlier that they knew National had not "hacked" the Budget.
Incisive investigations by Herald political journalist Derek Cheng exclusively revealed that the Government Communications Security Bureau (GCSB) had urgently tried to stop the Treasury Secretary from saying publicly that his department had been hacked.
It is unclear when that urgent message from GCSB head Andrew Hampton to his Minister Andrew Little was conveyed to either Makhlouf or Robertson.
But Robertson went on to endorse Makhlouf's press statement that there had been "deliberate and systematic hacking" of Treasury's website.
Once Little, Hampton, Robertson and Makhlouf knew an error had been committed — and that there was no substance to the hacking claims — they should have simply 'fessed up all round: issued a correction (accompanied by an apology by Makhlouf) and pulled back from the politicking.
There would have been political embarrassment. But that would have been transitory.
Instead, they allowed a wrongful claim to persist, for 36 hours, that National had hacked Budget information.
It should have been abundantly obvious to the Cabinet ministers that the police would reject the Treasury complaint that the website had been unlawfully breached.
But it was left to Makhlouf to front the volte-face after Bridges said he would reveal how National accessed Budget information from the Treasury website.
As National dug in this week, Makhlouf was again hung out to dry to face a personal investigation by the State Services Commission.
The commission's inquiry does not focus on the actions of Cabinet ministers. But deputy state services commissioner John Ombler, who will lead the investigation, should ascertain whether the GCSB Minister — or for that matter the GSCB itself — did go direct to Makhlouf and ask him to pull his press release and modify its content before publication. Or, if that was not possible, to issue a new press statement.
And if neither the GCSB, nor its minister did that, then, why not?
It should have been abundantly obvious to the Cabinet ministers that the police would reject the Treasury complaint that the website had been unlawfully breached. Photo / File
Robertson — via a press secretary — has said he did not know about the GCSB phone call before he put out his own press release.
This comedy of errors has another sad twist.
The Beehive did not wait for Ombler's inquiry to be finalised before briefing a journalist over the GCSB's urgent warning. This made for a great Herald scoop and revealed material that should have been in the public domain earlier.
But in my view, it has the capacity to taint the inquiry as Makhlouf is under an obligation of confidence while Ombler's probe continues.
Ardern — who has made fairness a defining principle for her leadership — should ensure a ministerial inquiry also takes place to examine the role Cabinet ministers and their political staff have played in not bringing the debacle to a quick and honest end.
Those on the Beehive guest list for the Makhlouf soiree would expect nothing less.
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