JACK WATERFORD. Pyne turning public role to private profit (Canberra Times 29.6.2017)

Jul 1, 2019

Australia yet again at the bottom of the democracies for standards of public conduct, and the will to enforce them.  

What is there about modern Australian politicians which allows them to think that it is perfectly all right to spend their post-political careers prostituting their intimate knowledge of government, government thinking,  colleagues still in power and old mates who will still answer one’s phone calls? Aren’t there decent and honourable jobs out of the political game not involving seeking to enrich oneself by putting knowledge one acquired on the public tit to personal enrichment.

Christopher Pyne is the latest outrage on this front, having announced that he will now work for Ernst and Young advising its clients of remunerative defence opportunities, particularly in his home state of South Australia. But he is in a long line of politicians on both sides of the fence who have dishonoured politicians generally, their parties, and their own reputations by acting as if politics was but a stepping stone to a new career where they concentrate on harvesting the big bucks by selling inside knowledge and privileged access.

Many of them do so with contempt for broad guidelines, contained in documents such as codes of ministerial standards, asking that they at least allow some passage of time before harassing their old colleagues and employing their inside knowledge for their own personal profit. Pyne has used a technical argument – that he will not be lobbying governments so much as briefing corporations wanting to make favourable deals with government. But it won’t wash – at least as conformity with the spirit of the rules, if they can be dignified with such a name. It turns out, of course, that the claims by prime ministers on either side of politics that they set and enforce high standards of public behaviour, especially by ministers, involves moral pressure only – even though the rules could be made enforceable.

It’s not a vice confined to the Liberal Party.  Any number of former Labor politicians and operatives, many of whom, in their public careers,  have spoken piteously about their devotion to the common man, have “retired” to make money advising billionaires on how to better exploit their old constituents. The Labor Party speciality is perhaps the more contemptible, given its magnetic attraction to vice, particularly gambling and liquor interests, and the perpetuation of special government privileges, licences and monopolies for moguls with strong historic antipathy to the Labor Party.  Thus Stephen Conroy, erstwhile party numbers man and minister for TV licences, is now head of a new industry body for on-line bookmakers. With the typical sort of deception parodied in the seminal Thank You for Smoking (by Christopher Buckley), the lobby is called Responsible Wagering Australia. Graham Richardson and a host of other former Labor hacks, particularly associated with the Sussex Street Sydney NSW Right, lobby for, and give strategic and tactical advice to James Packer’s gambling operation as it hectors and bullies concessions from state and federal governments. Others lobby for the registered clubs industry, and for major property developers.

Even before he became Defence Minister, Christopher Pyne has been a close student of defence procurement, and the personalities and the processes associated with  decisions about who would build our ships and submarines, and where they would be built. Pyne, who was apparently not paying attention on the day that his cabinet colleagues decided to close down the Australian car industry, became alarmed at the economic problems of his native South Australia, and became a fierce advocate of a South Australian build,  whatever the cost [generally thought to be a premium of at least 30 per cent on what it would cost anywhere else]. The government’s political problems in his state allowed him to help make the primary  purpose of the Australian defence budget an industry policy for South Australia, with security (at an extra cost) almost a serendipitous by-product.

No doubt Pyne intends to continue his noble spruiking of his state, drawing to the attention of Ernst and Young clients some of the contracts and opportunities that all of this defence expenditure creates.

In this, no doubt entirely by coincidence, he is in the position of the classic insider trader. He has sat in the highest councils of the nation, at which overall defence policy, and procurement priorities have been hammered out. He is fully briefed on Top Secret information informing this, including about decisions or understandings already in operation but not yet shared with the public. He has sat with all of the defence and military bureaucrats who are involving in establishing the case for new defence industry equipment, in evaluating needs, assessing different bids, and in conducting the arguments about alternatives.  He knows how they think. He’s got their telephone numbers, and, if he has the decency not to lobby them himself, there is nothing, except his judgment and good sense, to stop him passing them on to his clients. He has continuing relationships with his Cabinet, ministerial and party colleagues, and, even if he does not ring them to directly lobby them over a particular tender, there is nothing, except his common sense,  stopping him from ringing up for a chat, or an exchange of gossip about politics generally but then planting an idea or two on behalf of the folks paying him the big bucks.

Before him, if nearly 15 years before, Peter Reith was in much the same position as minister for defence until he stepped down to almost immediately take up a position with a major defence contractor. In his case, for what it was worth, one always knew who his client was, beyond his own self-interest. Pyne has, if he wants, the shelter of passing on his inside knowledge through his employer, and he will no doubt be advising many clients at once. Some players, indeed, may wonder if they can afford not to have his insights, his contacts and his access.

It’s not a problem confined to defence, either. Most of the major firms of lobbyists are full of former politicians now willing to advise clients about government thinking, and their own links and access into the system. Other former ministers, and not a few former senior public servants, are to be found on consultant panels on the big six law firms, or the big five accountancy firms. Almost all of these thrive on government contracts, not least in these days of efficiency dividends, the winding down of bureaucratic policy and program expertise, and government antipathy to actually independent advice.  In some cases, such as with Malcolm Turnbull’s plans for reviving Sydney, more than $100 million was set aside for divvying up on consultancies.

We can be thankful that Pyne has some sense of moderation. But the expansion of the post-political lobbying career creates real risks that politicians, including ministers, will do some of their decision making with an eye to jobs after they get out of politics. That is quite apart from the fact that the intimacies between buyers and sellers, the lobbiers and the lobbied, the consulters and the consultants can quickly lead to group think of the sort that sees favoured consultants get most of the work, in part because they know exactly what is wanted. These relationships, and the quality (and value for money) of the relevant advice is not subject to any of the contestability, or checks and balances of advice from the public administration. Nor, often, is it free of conflict of interest, or special pleading.

Australia has had the slackest standards, even on paper, of any first-world government about this modern incestuousness. That’s quite apart from the fact that there are no enforcement procedures, even it seems from overt prime ministerial disapproval. One might think that a strong statement might either shame a colleague reaching for the big bucks, or otherwise make potential clients cautious about engaging them. And perhaps shy of consultancy companies that lure them on their letterheads.

It has been generally thought that the spirit of the rules required that former ministers avoid using their inside knowledge for their private personal profit for at least 18 months after they stand down. By then, it is too readily assumed, their inside knowledge lacks currency.

But there’s a loophole – there always is – through which Pyne claims the right to gambol. It says, “Ministers will undertake that for an 18 month period after ceasing to be a minister, they will not lobby, advocate or have business meetings with members of the government, parliament, public service or defence force on any matters on which they have had official dealings as minister in their last 18 months of office”.

It adds,” Ministers are also required to undertake that they will not take personal advantage of information to which they have had access as a minister, where that information is not generally available to the public.”

 Pyne says he won’t lobby government. His client might. His boss might. But he will simply be talking to civilians – or merchants of death keen to know the inside dope on where the pickings are.

Ernst and Young have denied any breach of the rules. It has told the Financial Review Pyne would provide occasional high-level strategic advice, and lead conversations about what states needed to do to meet the challenges and opportunities this huge defence investment will bring.

“This does not involve Mr Pyne undertaking any activity back into government nor providing or using any information he may have received as a minister”.  Only what he read in the newspapers and on Twitter then.

“Mr Pyne has made clear that he is totally aware of his obligations under the ministerial code of conduct and is committed to adhering to them. Ernst and Young has rigorous processes and procedures to ensure that it does not put Mr Pyne  in a position where the ministerial code of conduct might be breached.

The Brits have somewhat tougher standards, and do not contract out the policing of it to the sense of honour of the former minister, nor a new employer hoping to use its appointment to generate millions for itself and its clients by selling things to government.

“It is in the public interest that former ministers with experience in government should be able to move into business or into other areas of public life, and to be able to start a new career or resume a former one,’’ the British code says.

“It is equally important that when a former minister takes up a particular appointment or employment there should be no cause for any suspicion of impropriety.

“On leaving office ministers will be prohibited from lobbying government for two years. They must also seek advice from the independent Advisory Committee on Business Appointments about any appointment or employment they wish to take up within two years of leaving office. Former ministers must abide by the advice of the committee.

“The business appointment rules for former ministers seek to counter suspicion that:

(a) the decisions and statements of a serving minister might be influenced by the hope or expectation of future employment with a particular firm or organisation; or

(b) an employer could make improper use of official information to which a former minister has had access; or

(c ) There may be cause for concern about the appointment in some other particular respect.’’

Opposition and backbench politicians have also signalled their distaste for an appointment that Labor MP, Julian Hill, deputy chair of a parliamentary inquiry into outsourcing described, again in the AFR, as “tawdry”. But Labor has to look at its own cases.

 “It’s effectively the minister not one month cold selling his knowledge to a sector where government is the ultimate client, and potentially also taking advantage of the government’s privatisation agenda, “ Hill said.

“It’s especially tawdry from someone with a parliamentary pension. He doesn’t need the money. I worry that in coming years as people retire who do not have a pension then we will see far more of this, and indeed, people will be lining up work before they leave, which is even worse.”

Just so. 

Jack Waterford is a former Editor of The Canberra Times


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