In April this year, when Kiri Allan was still Minister of Justice, she launched a review of lobbying. Justice officials were asked to investigate how corporate lobbying might be better regulated, following the controversy of ex-Labour Minister Kris Faafoi setting up a new lobbying firm less than three months after stepping down from his ministerial roles.
On Monday we learned Allan herself has set up a new firm that will essentially be lobbying too. Her KLA Consultancy website advertises that she will help business clients with “legislative and regulatory reform and advice”. Her sales pitch is around her background as a Cabinet Minister and the “extensive networks” she can utilise “to ensure projects succeed”.
In fact, Allan registered her consultancy business only two weeks after resigning as Justice Minister, and while she was still an MP. This looks like a good case study for her former Ministry of Justice officials looking at New Zealand’s politician/lobbyist “revolving door”. In other parts of the world, there is normally a lengthy stand-down period after ministers leave office before they can work as lobbyists, and certainly there are prohibitions against setting up lobbying businesses while still MPs.
Faafoi and Allan are only the most recent examples of senior government figures switching from the Beehive to business. There have been plenty of other recent shifts from Labour into the lobbying industry over their term in government, including David Cunliffe, Iain Lees-Galloway, and Clayton Cosgrove. It’s a well-worn path by MPs on both sides of the House, and if no changes are made it will continue to be.
Following Saturday’s election defeat, a raft of former Labour ministers, MPs, and staffers are preparing to leave their parliamentary and Beehive offices. It’s likely there will be a steady flow into lobbying and other positions supporting vested interests. These individuals will take with them their knowledge, networks and skills from their time in government and freely use them to help business clients navigate power.
Chris Hipkins’ Chief of Staff Andrew Kirton this year shifted straight from working for Anacta Consulting – a transtasman “government relations” firm run by David Talbot (who with political commentator Stephen Mills also provides opinion polling to Labour and corporate clients) – to running the Beehive. It will be interesting to see whether Kirton makes the shift straight back into lobbying. There’s certainly nothing stopping him.
In fact, lobbyists running the Beehive have been a recurring theme for the Ardern-Hipkins administration. When Jacinda Ardern became prime minister in 2017, her existing Chief of Staff, Neale Jones, left to become a lobbyist. She then employed another well-known lobbyist, GJ Thompson, who helped set the Government up, employed staff, and then went back to the private sector to help corporates lobby the Beehive.
This behaviour is referred to as the “revolving door”, in which lobbyists and political insiders frequently trade places, gaining parliamentary and government influence, networks, knowledge, and power, and later using these resources to enrich themselves and the private sector.
Former Napier MP Stuart Nash has also announced a new job, which started on Monday. Photo / Warren Buckland
The Case of Stuart Nash
Stuart Nash had a high-profile fall from grace, being sacked as a minister over his dealings with financial donors to his election campaign. He too has announced a new job, which started on Monday. He’s working as a lobbyist for recruitment company Robert Walters. This is the company that provides more contractor staffing to government departments than any other.
In his new role, Nash could be viewed as having a conflict of interest – albeit one that is entirely legal at the moment. As “Wellington-based commercial director” for Robert Walters he will be “in charge of Government relations” according to the press release put out by the company. The company says: “Stuart Nash will be working closely with senior leaders across the state sector to alleviate challenges they are experiencing as they overcome the current skill shortage.”
The firm also makes it clear that part of the reason they’ve hired him for the position is his “knowledge as an ex-Cabinet minister covering multiple social and economic portfolios, including revenue, economic development and small businesses”.
Herald investigative business journalist Kate MacNamara delved into Nash’s appointment last week and pointed out that his lobbying role raised significant potential conflicts of interest. She found that in the last fiscal year for which figures are available, Nash’s new firm “supplied $64m of contract labour and recruiting services to the 10 public service ministries and departments which spent the most on contractors and consultants”. And a big chunk of that was spent by the Ministry of Business, Innovation and Employment (MBIE), for which Nash, as then Minister for Economic and Regional Development, was responsible.
Furthermore, MacNamara points out that MBIE is responsible for developing and managing public procurement contracts with the likes of Robert Walters. She gives the example of how when Nash was a minister he met with the managing director of Robert Walters, but we don’t have information on what might have been discussed or negotiated.
MacNamara’s objection to Nash’s trip through the “revolving door” is worth quoting at length: “The first problem is that Nash’s quick dash to Robert Walters, a company deeply interested in government policy areas that were just recently Nash’s purview, allows too much scope for public suspicion: the possibility that the former minister could have been offered a job because of the decisions he took during his time in the Government. It is conceivable – though there is no such evidence in Nash’s case – that a minister might, in preparation for departure from government, prepare a soft private sector landing and that this might affect his or her ministerial decisions. In addition, Nash holds privileged information from his recent time in government – of the Cabinet’s decisions and discussions and of other ministers’ views – and there is now the obvious possibility for Robert Walters to make use of this inside knowledge.”
MacNamara also points out that as a lobbyist Nash will likely be dealing with the same people who worked under him as minister. Looking at the bigger picture, she argues that given the major issues at stake, “democracies should guard against the buying of special government knowledge and special government treatment”.
Hopefully, the current Ministry of Justice work on lobbying reform will put forward some fixes for the problem of ministers’ post-employment and the “revolving door”.
However, it’s possible the new National-led administration will water down or even close the lobbying reform programme. After all, this isn’t just a conflict of interest for the outgoing Labour Government, but for all political parties. National ministers might feel that they want to have the same lobbying career opportunities as their predecessors. Public pressure will need to be applied to National so we aren’t having these same conversations when National ministers inevitably depart the Beehive.
