GEORGE RENNIE. The Revolving Door at the Infrastructure Club

Feb 1, 2018

The revolving door of politics represents a particularly difficult problem for modern democracies. And when senior public servants leave their positions to work as lobbyists for the infrastructure industry – an industry that takes a lion’s share of government spending, and is afforded substantive protection from scrutiny by “commercial confidentiality” – that problem grows substantially.  

A recent Fairfax story on Adrian Dwyer’s move to Infrastructure Partnerships Australia (IPA) again demonstrates the significant turnover of senior public servants moving to the private sector. Dwyer was the director of policy and research at Infrastructure Australia, the peak government body for assessing public infrastructure projects.

It’s a win for IPA, a think tank that represents the infrastructure industry and seeks to “unite the key decision makers from across Australia’s governments and from the private sector.” To secure the services of a senior, highly knowledgeable member of the public service brings numerous benefits to IPA, but it also highlights the vulnerabilities with Australia’s lobbying regulations.

Dwyer, like the vast majority of those who leave government positions to work in the private sector, has broken no laws, and his role potentially allows him to contribute his knowledge to infrastructure research. Further, under the (albeit very flimsy) federal Lobbying Code, he is not considered a lobbyist.

However, therein lies the major problems with those who go through the revolving door: far more than in other democracies, Australia has not properly considered who is and isn’t a “lobbyist”, and have given even less thought to the implications, and permissibility, of the revolving door.

The first problem identified rests on how narrowly Australia defines a “lobbyist” in its code, (those who are in-turn required to be registered on a publicly accessible database). The current official definition captures third party lobbyists only – those who are paid by corporations to lobby on their behalf.

A more meaningful definition of a “lobbyist” would include anyone who seeks an advantage or benefit from government. This is useful to consider, as it recognises that a CEO can play the same role as a third-party professional lobbyist, but with far greater institutional power. Yet the CEO isn’t captured, the professional is.

To that end, when Gina Rinehart met with (then Trade Minister) Andrew Robb for a private dinner, she wasn’t subject to the code… similarly, her interactions with Barnaby Joyce (presumably their conversations are limited to their shared love of Akubra hats).

So, those who work for think tanks, even those think tanks self-describe as “uniting [government] and the private sector”, are not technically lobbyists, even though they define themselves as such. Under our current arrangements, even directors of registered lobbying firms are not, per se, “lobbyists”.

The second problem, that of the poorly considered implications of the revolving door, is far more complex.

Revolving door scholarship has often focused on the problems that arise from senior members of government having contacts and information that others do not. This gives them a significant advantage, as they might use that advantage to benefit new employers.

That alone is a problem: the former minister or department head who becomes a lobbyist may be able to exert persuasive or coercive pressure on their former colleagues or subordinates in government.

But there is also the problem of “intemperate conflicts of interest”, wherein members of government may be biased in their decision making by the knowledge that they are likely to be employed by those who benefit from their decision-making.

For instance, a majority of Australia’s recently retired former ministers go on to work as directors or lobbyists for companies that they directly benefitted in their role, by awarding of government contracts. It is less common, but not strictly “uncommon” for senior members of the public service to do the same (to be absolutely clear: no accusation is being made against Mr Dwyer to that end).

Consider where a decision maker knows they are very likely to receive a sizable salary if they stay on the “good side” of a corporation: how is this different from receiving a briefcase full of cash for the same decision? Our laws only adequately capture the latter scenario.

In this space, infrastructure companies, as with logistics and defense, stand to win sizable and often poorly scrutinised contracts from governments. So getting on the good side of a minister or senior public servant, who plays a significant role in the awarding of contracts, can deliver a significant benefit to the company, albeit at great cost cost to the taxpayer.

The problem of these intemperate conflicts of interest raises the sticky question of “permissibility”: should democracies even allow senior members of government to enter the revolving door? Or, should democracies merely attempt to limit the speed at which they enter it?

The Australian Code prohibits a former minister from becoming a lobbyist within 18 months of leaving office, or within 12 months for a former executive of the public service.

Again, the definition of “lobbyist” is critical: most of those who lobby are not legally defined as such. Further, the code itself is all but unenforceable. As it stands, the only remedy for breaches is either a stern telling off from the Department of Prime Minister and Cabinet and/or deregistration from the lobbyist register. As a rather important juxtaposition: breaches of the code in other jurisdictions, such as the US or Canada carry the threat of fines and/or imprisonment.

It is clear that Australia needs reform. Recent efforts by the senate cross bench, recently joined by the Labor Party, to introduce an integrity commission should be cautiously welcomed. Yet if the NSW Independent Commission on Corruption (ICAC) is the model for an Australian version, it is insufficient. ICAC, for all of its headline-grabbing triumphs, is all-but-powerless when it comes to policing the revolving door. Very clearly, a federal body would need a greater remit.

The revolving door, becoming ever more encompassing, requires greater scrutiny and regulation.

George Rennie is a lecturer in lobbying strategies and American politics at the University of Melbourne

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