Matthew Hooton: Truth gets lost in hacking claims

The sequel to the Budget 'hack' is like something dreamed up by House of Cards' Frank Underwood. Photo / Supplied

COMMENT:

When oppositions obtain information that governments wish to control, the Beehive response is highly personal and emotional, especially when it disrupts an announcement central to its agenda.

For those responsible for the planned announcement, there is a sense of shock, even violation, and of having let the side down. There is a thirst for revenge. This is not a good state in which to make rational decisions.

After Simon Bridges released Budget titbits last Tuesday, it appears a near-immediate decision was made somewhere in Wellington to invent a story that the Treasury had been hacked, to make a spurious complaint to the police and to imply criminal wrongdoing by the Opposition.

It is the sort of thing that might happen in a quasi-democracy like Russia, or in House of Cards.

It was obvious as soon as the Treasury and Finance Minister's office went public with the whole fantasy that it could not possibly be true.

Treasuries of developed economies are under almost constant attack by hackers, both state actors and others.

As the world's 50th largest economy with the 10th most traded currency, and as a member of the Five Eyes spy network, New Zealand is a prime target. A successful hack of a nation's Treasury would give access to information relating to most other areas of government, including security, defence and foreign affairs.

Thanks to the work of agencies like the Government Communications Security Bureau (GCSB), this never happens in Wellington or any other capital.

Treasury Secretary Gabriel Makhlouf. Photo / File

Treasury Secretary Gabriel Makhlouf's media statement last Tuesday night reporting that his department had been "deliberately and systematically hacked" and claiming the matter had been referred to the police on the advice of the GCSB's National Cyber Security Centre therefore had huge global implications.

Had the statement been correct, any prudent Treasury would have immediately released all economically or commercially sensitive Budget information and, with the Ministry of Foreign Affairs and intelligence agencies, launched an enormous global effort to reassure friends and allies and find the culprit.

None of this happened, with the only reassurance being that it was business as usual for Thursday's Budget and all other government activity.

It has since been revealed that well before he made his "hack" statement, Makhlouf had already been advised by GCSB that Treasury's systems had not been compromised.

The police, who normally take months or years to investigate political matters, then rejected Makhlouf's referral in less than 24 hours.

What would prompt Makhlouf, an uber-bureaucrat with decades of experience in Whitehall, including as principal private secretary to Chancellor of the Exchequer Gordon Brown, chair of the OECD's tax-policy committee and head of the UK's Debt Management & Banking Directorate, to make such claims?

The story from the Beehive, which has turned on the author of its Living Standards Framework, is that Makhlouf acted alone and then provided it with poor advice.

It was Makhlouf, the Beehive claims, who decided to call the use of the Treasury's own search bar a hack despite the GCSB's advice; Makhlouf who chose to call the police; and Makhlouf who advised the Beehive of a link to the Opposition.

If this is true, it is inexplicable Makhlouf is still in his job as the Government's chief economic and financial adviser rather than on gardening leave, and irresponsible for Minister of Finance Grant Robertson not to have called Irish Finance Minister Paschal Donohoe to advise him the incoming governor of the Central Bank of Ireland has gone troppo.

But just like the initial claim of a hack, the Beehive's story of a suddenly rogue Treasury Secretary doesn't ring true.

Treasury Secretaries simply don't, of their own accord, recklessly use inflammatory words like "hack" to describe searches of their own websites, or call in the police to investigate matters involving the Opposition, especially when already advised by the GCSB there had in fact been no breach of security.

These are things politicians and their party-aligned Beehive staff are inclined to do.
Robertson and Ardern adamantly deny knowing anything about any of this until after it was all done by Makhlouf without notifying anyone in the Beehive. They claim Robertson linking the fake "hack" story to the National Party was also based on Treasury advice.

Like everything else the Government has said about this whole affair, that is, at best, deeply implausible.

Simon Bridges released Budget titbits last Tuesday. Photo / File

First, Wellington's infamous "no surprises" rule in practice operates as a "prior approval" rule. More importantly, Beehive staffers are in almost constant real-time contact with people in departments, including through private communication channels like WhatsApp and SnapChat in an effort to thwart the Official Information Act.

In the context of an Opposition releasing Budget material, the Treasury alleging a hack and the police being called, it is not even slightly in the realms of possibility that no one in the Beehive was involved.

That a classic Kiwi cover-up is under way is evidenced by the State Services Commission (SSC) inquiry being limited to Makhlouf and his team. The actions, communications and behaviour of ministers and their staff are excluded.

The best bet is that the SSC inquiry will find that there was a miscommunication but that it is impossible to identify quite where blame lies; Makhlouf will be given an additional payout in exchange for a further non-disclosure agreement; and most of the Wellington media will decide that the public never cared about it anyway, so best to let sleeping dogs lie.

After all, making up a false allegation about the Opposition and calling in the police isn't so bad. It's no worse than something Vladimir Putin or Frank Underwood would do.

- Matthew Hooton is managing director of PR and corporate affairs firm Exceltium.

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