Buried treasures: Officials often in dark over political blessing for deals

By FRAN O'SULLIVAN

Government chief executives know well who usually gets blamed when controversy erupts over ill-judged state loans to the private sector.

But making a judgment on "reputation or political controversy" risks - as organisations are required to do under Treasury funding guidelines - is difficult if Cabinet ministers have been personally lobbied by an MP to give cash for pet projects.

"There's little in the rulebooks that cover these sorts of issues," said one Government departmental CEO this week, speaking on condition of anonymity. ''You've just got to grow some backbone and deal tactfully with the Beehive, because if you get it wrong it's your neck on the line."

Parliament's Speaker, Jonathan Hunt, last year ruled that former Act MP Donna Awatere Huata had solicited funds for the "Four Minute Reading Programme" from former National Treasurer Sir William Birch in return for supporting Government legislation. Two other ministers were also lobbied.

But Mr Hunt said the MP's conduct would become a contempt of Parliament only if she had solicited a benefit for herself or persons close to herself.

While the Cabinet Office Manual indicates it is proper for MPs to make representations to ministers on issues of concern to them in their electorates, it still does not directly address the difficulties presented by an MMP environment where an MP offers to trade their vote to gain a benefit for an organisation with which they are associated, or the personal benefit that might occur for the minister through playing this game.

But the affair is a cautionary tale for ministers and Speaker alike.

The Auditor-General revealed the MP later negotiated extensively with Government officials on the Pipi Foundation's behalf and did not remain at "arm's length" .

"They [officials] thought, but did not know for certain, that the decision had been made at a political level ... in accordance with political neutrality it was their job to ensure the appropriate contractual arrangements were put in place."

But the MP went on to threaten officials she would be "knocking on [the minister's] door" if they did not agree to her proposed contractual terms.

The officials told the minister (Nick Smith); he advised them to "play it straight".

Officials admit much embarrassment would have been saved if she had simply been shown the door.