Political Roundup: The Budget hack 'cock up or conspiracy' debate continues

COMMENT:

Political commentators are divided over whether the Government's terrible handling of the so-called "Budget hack" is a "cock up" or a "conspiracy". It's still not clear which, and nor is it clear who is responsible. But there is growing agreement that the Government's handling of the issue was in error, as it was a bizarre mistake for the police to be called in, and for the public to be given the impression that National had been complicit in some sort of criminal attack on Treasury.

The "cock up or conspiracy" debate was vividly explored yesterday in RNZ's weekly Nine-to-Noon Politics show, with a clash between rightwing commentator Matthew Hooton putting forward the "conspiracy" arguments, against leftwing commentator Stephen Mills arguing for a "cock up".

Hooton put the case that the Minister of Finance, Grant Robertson, had been complicit in dirty politics, and explained why he might take such a risk: "Because he was extremely angry… He thought 'I've got an opportunity to attack the National Party using the Police and false allegations of hacking and I can turn the story around'. And it worked."

According to Hooton's theory, the conspiracy involves many in the Beehive: "This involves the Office of the Prime Minister, the Office of the Finance Minister, the office of the head of the spy agencies, Andrew Little, and the Treasury secretary – who have told lies to the public".

In contrast, although Mills agreed that a conspiracy is always a possible explanation, he replied to Hooton: "I know that you're psychologically kind of framed to believe it's a conspiracy, but I think that the evidence is almost always that it's a cock-up". Hooton hit back, saying "I think that you're part of the cover-up Stephen because you're deeply involved in the Labour Party, and you're close friends with all the people in this who are in fact telling lies". It's a fascinating piece of political debate – listen (from about the ten-minute mark) here: Political commentators Mills and Hooton.

Hooton's theory is explained at length in his Herald column from Friday, in which he paints what has happened as "the sort of thing that might happen in a quasi-democracy like Russia, or in House of Cards" because "making up a false allegation about the Opposition and calling in the police" is what we normally associate with despotic governments rather than our own – see: Truth gets lost in hacking claims (paywalled).

The idea that Treasury Secretary Gabriel Makhlouf was acting alone and without the complicity of at least some in the Beehive is scoffed at by Hooton: "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."

According to Hooton, Makhlouf appears to be taking the hit, when it is "deeply implausible" that the Government had no knowledge of his actions until afterwards. For example, Hooton says: "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 Hooton's favour, the Herald's Derek Cheng also broke the story on Friday that the head of the GCSB had contacted the Beehive on the Tuesday when the scandal was first unfolding, to communicate that no hacking had in fact taken place – see: Budget Bungle: the Govt was told there was no hacking but kept tight-lipped (paywalled).

According to Cheng, "Andrew Hampton, head of the Government Communications Security Bureau, made an urgent call to GCSB Minister Andrew Little in an attempt to stop Treasury Secretary Gabriel Makhlouf from publicly saying that his department had been hacked". And he reports "National deputy leader Paula Bennett said it was inconceivable that Little didn't pass that information on to Robertson and Ardern straight away, and they should have immediately revealed the advice that there had been no hacking."

The exact timing and details of this GCSB communication to the Beehive informing them that Treasury was wrong to suggest any hacking is now vital to working out whether there was a cock up or a conspiracy, and who was responsible.

Robertson went on TVNZ's Q+A last night to defend his handling of the scandal, and explained why he got it wrong in his own public statement about the Budget leak: "We were relying on the advice that we had at the time. We didn't know what had happened. That's what the police were looking into" – see 1News' 'The advice we had' – Grant Robertson defends his initial description of pre-Budget release as hacking.

In his interview with Jack Tame, Robertson was asked about whether he sufficiently challenged the advice from Treasury about the "hack", and he replied "I'm on record as saying that Mr Makhlouf was very clear in his description to me of what he described as 2000 or so attempts to hack into the Treasury system".

Prime Minister Jacinda Ardern has until now been reluctant to comment on the crucial timings involved, with the justification that the whole issue is now the subject of the State Services Commission investigation. However she has now come out to say that the GCSB contact with the Beehive came after Robertson and the Treasury made their public statements about the "hack" – see Derek Cheng's Prime Minister Jacinda Ardern: Ministers didn't know GCSB advice when they said Treasury was 'hacked'.

Nonetheless, questions remain as to why the Government didn't correct the record the next day. Cheng reports: "The following day, neither Ardern or Robertson revealed the GCSB advice despite being questioned repeatedly in the House about the so-called hack and despite National leader Simon Bridges calling Robertson a 'liar' for saying that the Treasury had been 'hacked'."

Commentators continue to question why Robertson or even the Prime Minister failed to act. According to Fran O'Sullivan, the Government could have saved everyone a lot of hassle by being up front: "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" – see: Pomp and trying circumstances for a Gabriel Makhlouf farewell (paywalled).

Gordon Campbell writes that, when the truth became apparent in the Beehive, this "should have galvanized Robertson to go on the front foot and (a) publically clarify the likely nature of the leak (b) re-assure the public of its limited nature and thereby (c) begin to distance the government from Treasury's overcooked initial "explanation" as to what had happened. As we now know, Robertson did none of the above. As a result, the government now remains ensnared with Treasury's mishandling of its information" – see: On how the Treasury debacle reflects New Zealand's wider security problems.

Similarly, Herald political editor Audrey Young says that Robertson is now vulnerable on this question, and today's Parliamentary Question Time might allow some clarification on this – see: GCSB advice shifts focus from Makhlouf to ministers (paywalled).

Young thinks, however, that clarity is unlikely to be forthcoming today: "Unfortunately for National, the rules of the debating chamber mean that any minister, including the Prime Minister, is able to decline to answer a question if he or she believes it is the public interest not to do so. Ministers need simply say that because it is the subject of an SSC investigation, they do not believe it is in the public interest to answer. Speaker Trevor Mallard may indirectly criticise such judgment calls but he cannot override them." See also, Barry Soper's Jacinda Ardern will need her flak jacket over Budget debacle during question time.

Andrew Little is one of the ministers who could help clarify what happened, but he's currently overseas. And according to Richard Harman, "the Prime Minister will be in Hamilton at the Field Days on Wednesday and the deputy Prime Minister, Winston Peters will substitute for her. That is unlikely to make anything any clearer" – see: Budget leak spotlight turns on the spies.

According to Harman, there are also still questions about whether GCSB acted fast enough in the scandal, when they could have possibly corrected the public's misinformation: "There are questions about why the GCSB kept the information about what had happened at Treasury to itself and did not see fit to advise its own Minister about what had happened even though the issue was dominating news headlines all through Tuesday. If it was a straightforward human error, as National sources are saying, then why wasn't the GCSB able to say so?"

The whole episode has shown "politics at its ugliest, most naked, worst" according to Tracy Watkins who also says the official State Services Commission inquiry "seems designed to shut down questions" – see: Farewell speeches for outgoing Treasury boss likely to be short.

Watkins wonders if the scandal might end up damaging Ardern, because "Labour's danger is it starts to wash up against 'brand Jacinda', which is supposed to be above all this. Why do politicians never seem to learn that the cover up is almost always worse than the crime?"

She also points out that it appears that the leaking to the media of details of the GCSB call to the Beehive is also dodgy: "there can only have been one purpose in leaking details of that phone call – to hang Makhlouf out to dry. The higher the stakes, the dirtier and more desperate the tactics look."

This is something that Fran O'Sullivan has also commented on: "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."

Of course, it's still possible that the whole scandal could be both a cock up and a conspiracy – which is nicely conveyed in Steve Braunias' Secret diary of the Budget hack (paywalled).

Finally, for anyone who still thinks that the Government's handling of the "Budget hack" is a non-story, Danyl Mclauchlan thinks this is probably because you're a partisan hack yourself, and he implores the left to take seriously issues of accountability and ethics, rather than mindlessly cheering on your own side – see: Why calling the Treasury data scandal a 'beltway issue' is basically bollocks.