Political Roundup: The role of corporate lobbying in NZ's political process

COMMENT:

Debate about the role of corporate lobbying in New Zealand's political process continues in 2019.

Political commentator and newly-declared lobbyist Mike Williams was at the centre of a minor dispute over the influence of lobbyists in New Zealand last week.

The debate arose out of story on RNZ's Checkpoint about the battle over Lime scooters on the streets of Auckland, in which it was revealed that Williams, a former Labour Party president, now mostly known as a political commentator, had been hired by the US-scooter company to help negotiate with the New Zealand politicians and officials regulating transport issues in this country. You can see this here: Lime told to prove safety of e-scooters, or remove them.

According to RNZ, "former Labour Party president and lobbyist Mike Williams had smoothed the way for the Lime roll out. Mr Williams confirmed to Checkpoint that he was paid by Lime to introduce their representatives to Auckland Transport staff and another key contact – Transport Minister Phil Twyford." The chair of the Auckland Transport Agency, Lester Levy, is interviewed about this, responding that "I'm quite uncomfortable with many aspects of this".

Subsequently, the Herald's Chris Keall asked for comment on Williams' lobbying role, and I responded that it should "alarm anyone with an interest in defending democracy and good political processes in New Zealand" – see: Mike Williams' lobbying work for Lime alarming: academic.

My argument is this: "It seems that Williams has many different roles in New Zealand politics, and we now know that one of these roles involves working for corporate interests – and that company has clearly benefitted from Williams' insider knowledge and contacts, which it now appears he is using to make money out of".

I outline how this type of activity is seriously frowned upon in other parts of the world, as unfair and bad for the political process: "In many democracies, they call this the 'revolving door' of influence – whereby political insiders shift easily between government jobs or positions and lobbying work in the private sector. It's seen to cause serious inequalities of power – because lobbyists and their clients are able to get more influence and power due to their connections and backgrounds. They can easily get 'behind the scenes' in ways that ordinary people can't."

On Thursday Newstalk ZB broadcaster Mike Hosking responded in one of his "Mike's minute" videos, colourfully suggesting that I was over-reacting: "Settle down Bryce, you sound like you have a sieve on your head, and you think the aliens are coming" – see: Supposed conflicts of interest in the limelight.

Mike Williams is a former Labour Party president.

Hosking argues that New Zealand is "one of the most clean, clear, and uncorrupted economies in the world" and that "What we really need to be worried about is the quality of decision-making. No matter who rings who, who sets up meetings with whoever, the real issue is: are the decisions good, honest and sensible?"

For Hosking, arguments over conflicts of interest are too esoteric, and we must accept there will always be powerful political players shifting between roles: "Bryce has been reading too many conspiracy theories, he's too wrapped up in the cloistered world of academia, and its many weird and wonder fantastical theories about how life is supposed to be operating versus how it really operates.

"There are Mike Williams type figures all over business and politics – and always have been. Politicians who go to the private sector, do they have a conflict of interest? Former prime ministers on boards, from Jim Bolger, to Sir Michael Cullen, to Dame Jenny Shipley, to Sir John Key – do they have a conflict of interest? Former government press secretaries who move into the corporate world with their contacts and knowledge – do they have a conflict of interest?"

Well, yes Mike, they do have potential conflicts of interests, actually. And I've written extensively about problems with former politicians, political commentators and journalists being involved in lobbying.

Columns over the last year include: , Vested interests in political commentary , The Government's revolving door for lobbyists, Unfettered lobbyists under suspicion, and The stealthy power of lobbying in New Zealand.

One of the main points of these columns is how conflicts of interest are not fleeting, but enduring – just because an individual leaves one position of influence before going onto another doesn't mean that conflicts of interest suddenly dissolve. And, furthermore, the lobbying problems can be worse when they involve opinion leaders in the media, and especially if these aren't thoroughly declared.

Of course, Hosking is no stranger to complaints about conflicts of interest, and it's likely this has influenced his view on lobbying. Back in 2012 Hosking was revealed to have received $48,000 from Auckland's SkyCity Casino, during which time he wrote articles defending the company. And in 2013 he was the master of ceremonies for Prime Minister John Key's state of the nation speech, which he strongly endorsed.

Hosking's 2019 views on lobbying are reminiscent of those expressed last year by the Herald's John Roughan in the wake of the controversy over then-Broadcasting Minister Clare Curran holding an undeclared and inappropriate meeting with RNZ's Carol Hirschfeld, both of whom lost their jobs over the matter because of concerns about political process. Roughan responded to the controversy by declaring this an example of "intimate democracy" working well – see: Lobbying today oils the wheels of power for the better.

Roughan argues that politicians "in this country are not corrupt" and the intimate working relationship of business, politicians and lobbyists "means people in powerful or influential roles get to know each other and can work with those whose professionalism, skills and judgment they respect".

He argues that such an intimate and efficient democracy "could be undermined by" those arguing for "monastic purity", especially "political academics who work in just such a rarefied environment, dealing with written research and theoretical propositions rather than people outside their bubble". He worries that this "feeds the crude suspicion that any confidential meeting with a minister must be a conspiracy against the public interest."

Roughan and Hosking's worries about the public becoming suspicious of lobbyists is probably far too late. There is clearly a public discomfort building about inequality of power in politics, and about insiders having their fingers in too many pies.

Many countries (Australia, Canada, France, US, Denmark, Austria, France, Ireland, Israel, Lithuania, Macedonia, Netherlands, Poland, Slovenia, Taiwan and Hungary) have a compulsory registers of lobbyists, while others (UK, Germany and the EU) have voluntary registers and are under pressure to make them compulsory. New Zealand simply has no formal mechanisms for transparency.

It doesn't mean that the likes of Mike Williams can't be both paid lobbyists and political commentators, but unless they declare these roles or are outed by other media, the public simply never knows. Do listeners know when they listen to Williams on RNZ's Nine-to-Noon programme that he is also a corporate lobbyist? Would they benefit from knowing this and who he is lobbying on behalf of?

It's the conflicts of interests we don't find out about that are the bigger problem, and if he and RNZ won't declare these sorts of interests, then New Zealand, like many other countries, needs to make sure that information is available.

Of course, there will always be political insiders who have crucial positions inside the democratic establishment, who then leverage their former positions, knowledge and contacts in the future as lobbyists. This shouldn't necessarily be prevented. But some transparency wouldn't go amiss. Knowing more about how central some lobbyist-commentators are to the political process is useful to understanding how modern democracy works.

It also worth noting that the politician who is responsible for providing lobbyists with free access to Parliament, Speaker Trevor Mallard, also climbed into the Mike Williams controversy a few days ago. Mallard, who is a former colleague of Williams, published a number of aggressive tweets defending Williams and strongly admonishing my position.

This earned a rebuke from Tau Henare that in his role as Speaker Mallard ought to stand above the fray. And the Herald's Chris Keall, who wrote the original piece covering the controversy said: "Our of order, Mr Speaker. More transparency is always better. @bryce_edwards' reference to a register of lobbying activity (as in the US and many other countries) will appeal to anyone who wants to know who's greasing govt wheels for Lime, big pharma, Fonterra etc etc".

Continued doubts about the role of lobby groups and corporates in the public process have been raised in a number of recent media articles. On Friday, for example, it was revealed that the New Zealand China Council, which is mostly funded by government departments, also receives resources from the national airline: "A lobby group focused on keeping New Zealand onside with China has received more than $1.5 million in taxpayer funding since 2016 and gets 'travel funding' from Air New Zealand to fly regularly to China" – see: John Anthony's Air New Zealand gives handouts to taxpayer funded lobby group New Zealand China Council.

In terms of the current debate over capital gains tax proposals, there is also a suspicion that wealthy lobby groups have an unfair advantage in defeating the ideas – see Damien Venuto's How lobby groups stole the capital gains tax debate.

In this article, Massey University public relations specialist Chris Galloway is quoted: "A problem with public relations more generally is that the people who can afford to pay for its services tend to be the business elite… Your average community group might use PR techniques but doesn't have the money to pay for expert advice. The danger of it is that the people with the deepest pockets get the most say."

There are ongoing suspicions, too, about the influence of "film heavyweight Sir Peter Jackson" on the political process. Last year Jackson managed to get the Government "to reject official advice recommending surging taxpayer support for the sector be curbed" – see Matt Nippert's recent article: PM Jacinda Ardern canned film subsidy curbs after meeting Peter Jackson.

Even Parliament's Speaker Trevor Mallard climbed into the Mike Williams controversy.

And a prominent lobby group has also been in the news because it's partially funded by British American Tobacco: "A right-wing lobbying group which has railed against cigarette tax increases and plain packaging laws in New Zealand counts a tobacco giant among its corporate funders. The NZ Taxpayers' Union has not disclosed its financial support from tobacco companies in its reports or press releases, with one public health academic calling on it to be more transparent about its donors" – see Sam Sachdeva's Taxpayers' Union backed by tobacco giant.

Sachdeva labels it an "egregious lack of transparency", especially for an organisation whose motto is "lower taxes, less waste, more transparency" – see: Tobacco ties undermine Taxpayers' Union.

But he believes that the revelation will damage the organisation: "With the Taxpayers' Union digging in over the secrecy of its donors, media and the public will struggle to take its work at face value when there could be industry money funding (at least in part) any piece of research. While only time will tell, its credibility may have suffered fatal damage."

Earlier this year, the NBR ran a three-part series on lobbyists by journalist Nathan Smith, involving interviews with three leading participants in the industry. The most interesting was former Labour Party chief of staff Neale Jones, who now works as a lobbyist helping business deal with the Labour-led Government – see: Lobbying is a key ingredient in democracy, Hawker Britton says (paywalled).

See my Political Roundup outlining the problems with Jones working at a very senior level in Labour one week and for a lobbying firm the next here: The rise of the hyper-partisan lobbyists in Wellington.

As to the "revolving door" issue of whether there needs to be a "cooling down" period for politicians and senior officials like Jones before they take up lobbying jobs in the private sector, Jones isn't keen, because "people need to make a living and have jobs and, when you've worked in Parliament, there are only so many places you can work afterward." The article comments that this is "because the status quo seems to be working for him".

Overall, Jones speaks very favourably about the role of the lobbying business in democracy, and points out: "Lobbying represents a crucial gear in the machinery of democracy as it improves access to lawmakers for those hoping to both keep them honest and offer their opinion on proposed regulations or legislation. The government doesn't always understand business and business doesn't always understand the government". And the role is crucial, because "Often, a small change in legislation will have millions of dollars of impact on a business."

According to another new lobbyist, Holly Bennett, who has shifted from working under the previous National government to advising business interests, the power of her contacts are vital, and business shouldn't "under-rate personal contact" with politicians. The article reports: "Bennett says without her time spent working in the Ministry of Justice and other ministerial services, she wouldn't have the access to MPs her clients need" – see: Lobbying is about navigating a 'vast bureaucracy,' says Holly Bennett (paywalled).

Finally, for the latest academic research into lobbying and its regulation in New Zealand, see Grease or sand in the wheels of democracy? The market for lobbying in New Zealand by Thomas Anderson and Simon Chapple of Victoria University of Wellington.

They examine who currently is doing the lobbying, and conclude that there is a need "to shine a brighter light on a currently shadowy industry which has significant long-term potential to corrode the integrity of the democratic process."