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How close is too close?

Written By: - Date published: 7:20 am, June 3rd, 2011 - 54 comments
Categories: accountability, corruption, dpf, national - Tags: , ,

How close should corporate interests be allowed to cuddle up to the government? When is a gift not a gift? If it isn’t influence what is it? The Greens have raised important questions surrounding Westpac and the Nats:

Govt denies Westpac ‘buying access’ to ministers

The Government says the Green Party’s implication that Westpac Bank has bought access to ministers through generous corporate hospitality is wrong.

Replies to questions from the Greens to the Government show that nine ministers accepted hospitality from Westpac in the past year, including box seats at the Rugby Sevens, dinner at the White House restaurant in Wellington and tickets to rock concerts.

Earthquake Recovery Minister Gerry Brownlee and Social Development and Employment Minister Paula Bennett attended last year’s Bon Jovi concert in Wellington in the Westpac Corporate Box.

The answers also show staff of 13 ministers accepted similar hospitality from Westpac.

The Greens say ministers should not be accepting hospitality from Westpac when the Government’s master banking contract held by the bank is under review. …

Not a good look? The Nats seem a bit rattled. Key is publicly calling (yet again) for his ministers to dial back on the perks:

MPs told cup must not runneth over

Prime Minister John Key has laid down the law to his ministers over accepting too many corporate box invitations during the Rugby World Cup.

How many is “too many” John?

His warning to be careful about the sort of hospitality ministers accept during the six-week tournament comes after the Greens questioned ministers and their staff accepting generous hospitality from Westpac Bank while the Government’s master banking contract is under review. Westpac holds the contract.

The Nats’ pet blogger is spinning so fast on this one that I can hear the high pitched whine from the Mainland. He tries to ridicule the idea that naked attempts at currying favour can have any effect at all. Its the usual stinking hypocrisy from DPF, who once hounded Winston Peters over a “scandal” involving a single free dinner. (Come to think of it the Nats took out a formal complaint over that one free meal.) Of course gifts to politicians buy influence, that’s why we have laws governing them.

More credible bloggers point out the problems. At Dim-Post:

But what if this is a regular occurrence? Over a three year term this kind of hospitality could easily be worth over ten thousand dollars – but each incident was only a low value, undeclarable gift. I’ve heard some MPs mention that their office fridge is always full of alcohol gifted by lobbyists for the hospitality industry. Crate of beer and a box of wine? Low value: non-declared, but worth thousands of dollars/MP over the course of a three year term.

I think the best way to phrase the question around this issue is: would we be comfortable if these were cash sums, ie. would we be happy if companies that had business arrangements with the government were able to pay MPs moderately small amounts of money on a weekly basis without any disclosure?

Excellent points. And finally I/S, as usual, doesn’t pull any punches:

Key supports corruption

So, John Key thinks there’s “nothing wrong” with accepting bribes from Westpac and other corporates. Of course he does. He is from the corporate world, where this sort of corruption is par for the course. But what he doesn’t understand is that we expect better from our elected officials.

As for the argument advanced by their recipients that these bribes are meaningless, and do not result in improper influence, then why do the corporates offer them? They think they’re getting something out of it – legally speaking, they’re not allowed to offer it if they’re not. And so should we. …

The party that spent weeks hounding an MP over a single free meal has a lot of questions to answer…

54 comments on “How close is too close? ”

  1. sean maitland 1

    Wait a minute – didn’t the Greens get caught doing the exact same thing recently too? Hypocritical much?

    • happynz 1.1

      Care to elaborate? What thing was it that the Greens were doing that equates to National’s ministers enjoying Westpac’s hospitality?

      • RobC 1.1.1

        I’ll elaborate for you happy – Sean is referring to Norman’s trip to the US – y’know, the one paid for by the US Government which is apparently “the exact same thing” as accepting free tickets to a Bon Jovi concert from a corporate business that, oh, has a commercial relationship with the Govt.

        The only thing hypocritical Sean, is the RWNJ’s whining this is all fair and above board for the reasons outlined in the post.

  2. Don’t you love the phrasing.  Key has “laid down the law” to ministers essentially not to submerge themselves too deeply in the corporate trough that their paymasters lay out for them.

    Fairfax resemble North Korea’s state newspaper sometimes.

    Just a little bit of thought would be appropriate before using such obsequious phrasing.

    • Armchair Critic 2.1

      Fairfax resemble North Korea’s state newspaper sometimes
      The main difference, perhaps, is that the government directly instructs the media on what to report in North Korea, whereas in NZ the chain of command is somewhat more convoluted (and less efficient, in the name of appearing to be deomcratic, balanced etc.).
      So much for the market providing a free press.

  3. happynz 3

    Turn on your TV for the evening news and this issue will get little to no play. That’s my prediction. NZ’s media are such lightweights.

  4. Matthew Hooton 4

    In the 1990s, Doug Myers used to send every member of the press gallery a dozen Steinlagers for Xmas. This led to a debate among some journalists about what to do, with two broad views emerging:

    1.) Return the beer, on the grounds that to drink it would risk creating a perception that past or present work on Mr Myers’ business interests was influenced by drinking the beer.

    2.) Drink the beer, on the grounds that to return it would risk creating a perception that you are the sort of journalist whose coverage might be influenced were you to drink it.

    I still don’t know which argument I think is the stronger.

    PS. I can’t recall if Mr Myers also sent beer to ministers’ offices (where I was working) but, if he did, I can assure you that not a single bottle would have been returned and it would all have been drunk by the staff without the ministers even knowing it had arrived.

    • Lanthanide 4.1

      Did you get a bottle of wine from John Key at Christmas 2009?

      • Matthew Hooton 4.1.1

        No

        • Colonial Viper 4.1.1.1

          “No” is also the correct truthful answer to that question if one had received a case of wine, instead of a single bottle, if it was a bottle of scotch and not of wine, or if the gift came from the PM’s office not from Key himself.

    • felix 4.2

      There’s actually no debate there for any journalist with a shred of credibility, integrity, ethics, or understanding of their role in a democratic society Matthew.

      Also what sort of prick sends Steinlager?

      • Draco T Bastard 4.2.1

        Also what sort of prick sends Steinlager?

        The people who a) don’t drink the shit themselves and b) are out of touch with the rest of NZ 😛

    • McFlock 4.3

      Hmmm. I’d probably keep the beer (not that I drink Steinlager anyway – probably just give it away), but there’s a difference between an xmas gift and never having to stock your liquor cabinet, getting the best seats in the house for free if you want them, free helicopter rides when you can’t be bothered using the airforce ministerial luxury car, and so on.

      The difference isn’t only in scale – we’re talking about a small value one-off given at a time when gifts are conventionally given, versus creating an expectation of entitlement.

      I suppose a clear example of journalistic conflict would be a story I heard about a prominent tv chef who did one of those “walk the earth, taste the real cuisine” shows. Got pissed off at one manufacturer because chef was refused several hundred dollars worth of free product (outside any arrangement with the producers), so ended up spending an entire day at the factory for barely a mention on the show. THAT is clearly unethical – the expectation of gifts in exchange or under threat of spinning a review or report.

    • Barry 4.4

      3. hand it to the cleaning staff.

      • Matthew Hooton 4.4.1

        By the looks of most press gallery offices, there are no cleaning staff … but, if there were, that would have been a good option.

  5. nadis 5

    To me the most interesting part of this debate is the deafening silence from Labour. For a very good reason. Having been in a corporate box at the same time as previous ministers I think you can guess the reason. On issues like this, all politicians are the same – the reason the greens have clean hands is because they haven’t ever and probably never will be in cabinet.

    On the one hand (as a receiver of corporate hospitality) I don’t believe for a second that this will influence a tender like the govt banking business. But on the other hand – I think it is a shit and lazy look and politicians should avoid freebies of any sort. I know the Reserve Bank has a staff policy that they can accept corporate hospitality but that the corporate has to invoice the staff member personally for “fair value”. If Gerry had received an invoiced for $300 for bon jovi tx and paid it I dont think anyone would have a problem with that.

    • Blighty 5.1

      David Cunliffe has commented that when he was ICT minister he had a strict rule for himself and his staff not to accept any gift from companies in the industry.

    • I agree Nadis that there should be a very simple rule with no exceptions.

      No corporate gifts, no exceptions, and if they offer they should be asked to donate to Salvation Army instead.

      • PeteG 5.2.1

        That’s much better. Fair comment, I agree too, although I’d let them choose an appropriate charity themselves.

        With all the exposure over the last couple of years you’d think they’d have figured it out themselves by now.

  6. RobC 6

    Actually, the problem I have is this sort of thing is an absolute no-no for public service employees so why should elected officials (politicians) have different rules?

  7. PeteG 7

    Some clear rules and guidelines on this would be a good idea, but it is a difficult thing to define what is and what isn’t over the line, and there are a lot of potential anomalies.

    A $5000 party donation from a corporation is ok but a $100 meal or sport ticket isn’t?
    A $5000 party donation from a union is ok but supplied afternoon tea is too?
    Giving a politician a lift in your car because you’re going the same way is ok but no helicopters?
    A $5000 party donation from an environmental group is ok but a complimentary joint is or isn’t?

    I guess the sensible self imposed rule is if in doubt don’t accept anything.

    I wonder if Key was billed for the royal wedding breakfast (if he was there) – that would have been worth a bit.

    Maybe we should all practice what we preach, and not accept any more free toys in return for buying hamburgers.

    • PeteG trots out the well worn cliche that the trade union movement in New Zealand is as powerful and as well funded as the corporates.

      Not even close PeteG.  This is the sort of line that people uninterested in the truth and only interested in winning will trot out, just so they have something to shout to hopefully drown us out when we shout out that NZ is being taken over by the corporates.

      All I can say PeteG is BS, BS, BS.

      The trade union movement has been brought to its knees by a couple of decades of neo right activity.  The 5th Labour Government held the line but did not do much more.

      And coincidentally during this time workers’ wages and conditions have plummeted. 

      Are you able to debate the details PeteG, like National Party donations and Labour Party donations?

      • PeteG 7.1.1

        Steady on MS, you sound like you’ve just watched the Highlanders second half, they must have been using a Labour strategist.

        You’re isolating one thing out of a bunch of examples where they are obviously just to make an overall point, and then exaggerating your indignation to buggery. So you can take your BS back.

        Have a nice weekend off, you might feel a bit better for it.

        • mickysavage 7.1.1.1

          Um Peteg

          Your previous comment implied heavily that the Trade Union Movement contributed the same to Labour that the Corporates contributed to National.

          Do you agree or disagree?

          You are working late.  Is CT now springing for OT?  Hope it is at least at time and a half!  If not I suggest you join a union ; )

  8. RedLogix 8

    This is cut and dried.

    In an earlier corporate life (US based) I used to have to sit an annual test on ethics. It usually took about an hour or so, and each year the questions changed. You had to get it right.

    While there was a clear set of guidelines around normal business to business transactions and relationships… there was a different and much stricter set of rules relating to government business.

    In essence the rule was… no gifting of any sort that could be in any way connected to a particular transaction. ( Corporates themselves frequently donate to political campaigns, but US perceptions around this are different to ours and are considered an entirely separate matter.)

    In this case the gifting from Westpac can be clearly connected to a specific transaction…. the renewal tendering of govt banking… therefore in my book it is clearly and absolutely wrong. No if’s, no but’s, and certainly no spin from that hypocritical buffoon Farrar.

    • ianmac 8.1

      That looks unequivocal to me. I scanned the on-line papers this morning and found not one reference to the issue. Funny that.

  9. randal 9

    so what this really means is the national mp’s are just a bunch of on the make cheapskates.

  10. Bunji 10

    The claims that it doesn’t buy influence are somewhat ridiculous – just the same as “advertising doesn’t influence me”. If it didn’t get the corporate anything, they wouldn’t do it.

    Danyl makes a very good point of several small gifts adding up to more. Currently gifts under $500 are undeclared, but getting $300 tickets to whatever event each week should add up. For political donations if you donate $999 a hundred times it counts as one big donation, so if you get a dozen $300 event tickets from a corporate (or 52 weekly cases of wine etc) in a year it should have to be declared.

    It’s the sort of thing you need clear rules around, as – as Matthew says – if you’re given a crate of beer and it’s not against the rules, are you really going to turn it down? (good work on not letting the minister be influenced by drinking it first Matthew 😉 )
    Altho I should make clear I think advisors should be on the same rules of ethical conduct – those unelected “servants” generally have more power than Backbench MPs after all…

    And the squealing that “Labour do it too” – so what? If some of their ministers/ministerial staff did it, that wouldn’t make it right.

    Stephen Franks on Afternoons yesterday was coming up with an even more ridiculous argument that politicians shouldn’t get too remote from the public and taking their corporate hospitality away from them would somehow do that. a) corporates don’t make up a very big slice of the public / public opinion, b) ministers having to pay their way at events shouldn’t stop them going…

  11. arants 11

    The Greens should ask about Telecom & Sky’s corporate hospitality too. Both probably dispense more than Westpac & both have benefitted from pronounced favouritism.

  12. joe bloggs 12

    Must be a slow policy day when the Labourites start parroting the Greens.

    Evidently someone’s forgotten the Westpac donation of $15,000 to Labour in 2007, or the $23,500 they donated in 2006, or the $30,000 in 2005. Wonder what those displays of benevolence bought?

    Hang on I see a pattern here – a loss of that loving’ feeling from Westpac.

    Could it be this spleen venting from the LWNJs is actually a bunch of sour grapes?

    • RedLogix 12.1

      Evidently someone’s forgotten the Westpac donation of $15,000 to Labour in 2007, or the $23,500 they donated in 2006, or the $30,000 in 2005. Wonder what those displays of benevolence bought?

      Many different people and entities donate to political parties. And while you selectively quote donations to Labour, more than likely Westpac was making similar donations to National at the same time. This is accepted practise….unless you want to condemn and stop ALL donations to political parties (and presumably move fund political parties from the public purse) you really haven’t anything to say.

      What is happening here is quite different. Here we have Westpac gifting individual Ministers immediately during a period when a major banking business tender is being conducted. This is a complete and absolute no-no.

      It is corrupt. Waiting anxiously for burt to arrive and demand all the Ministers involved resign immediately…..

      • joe bloggs 12.1.1

        PeteG has already highlighted the inequity of a system that considers a $30,000 donation from Westpac to Labour to be OK yet a $100 ticket to a game or for a meal to be dubious.

        Perhaps you should give that some thought.

        And while you’re about it, consider also the $300,000 ‘donation’ from Owen Glenn to Labour (sparked by a behind-the-door promise of an honorary consulship, and rewarded with the New Zealand Order of Merit), along with Mike Williams vehement denials (and subsequent offer to resign when he was caught lying).

        That corruption you smell is closer to home that you would have the rest of us think.

        • joe bloggs 12.1.1.1

          How remiss of me – Owen Glenn didn’t buy his NZ Order of Merit for $300,000. It cost him $500,000 in 2005 plus a top-up interest free ‘loan’ of another $100k in 2007.

          Remind me again:
          He wasn’t born in New Zealand.
          He hasn’t lived in New Zealand for over 40 years.
          He wasn’t eligible to vote in New Zealand…

          I wonder? Did Owen ever get his $100k interest free ‘loan’ back? What price corruption, eh?

          [lprent: That is quite off-topic for corporate bribes to ministers and a quite deliberate diversion troll. Your previous comments are similar. You know better and therefore accept the risk you’re taking.

          Banned for a month (and I was reaching for the banned until after the election button). ]

          • Colonial Viper 12.1.1.1.1

            Corruption needs to be stamped out, i wonder what Rodney was offered to accept the knife in the back from Key and Brash?

        • r0b 12.1.1.2

          I’ve got your solution joe bloggs.

          Total ban on all corporate / private donations to political parties and individuals. State funding of parties on a vote share basis. Problem solved.

          Are you with me?

          • Colonial Viper 12.1.1.2.1

            Yes public funding on a vote share basis which is then capped at 25% of the vote. That means that a party with 50% of the vote does not get 2x as much money as a party on 25% of the vote, and it doesn’t get 10x more money than a party on 5% of the vote.

            Levels out the playing field rather nicely 🙂

            • Draco T Bastard 12.1.1.2.1.1

              No it doesn’t. It keeps it tilted in the incumbents favour.

          • PeteG 12.1.1.2.2

            Only partially solved. Changes in circumstances between elections can be significant. If, for example, National and Labour were neck and neck on the polls now would it be fair to fund them based on last election’s votes? And new parties like Mana wouldn’t qualify at all, even if they applied for funds in time.

            There will never be a perfect solution – that keeps all politicians happy. I’d be happy if less was spent on political broadcasts and advertising on TV, and on mail boc drops – some people may actually take some notice, and some of them may be swayed, but I’d be surprised if it’s value for money.

          • lprent 12.1.1.2.3

            joe bloggs will be quiet for the next month. You may have to wait for that answer.

  13. Tom Gould 13

    With Goldman Sachs under investigations by state and federal authorities for rorting around the melt-down, is it fair to ask what government contracts and contacts they have here? Just asking.

  14. Banks are not known for spending money for no return are they? Politicians can say it doesn’t influence any decision making, but corporate interests wouldn’t bother otherwise, now would they?

  15. randal 15

    well just just give them “two” crates of steinlager each and nobody will bea ble to answer anything. q.e.d.

  16. djg 16

    If Nats had not decided to put the contract up for tender would any of this be an issue ?

    Who gets to advise on the tender outcome, is it Treasury or National ?

  17. randal 17

    hooton is fibbing. he wasn’t around when myers was spreading his liquid largesse around before he shoved off to London to get away from the rubes who could be bought witha carton of beer.

  18. Tom Gould 18

    Interesting to see the rampant media coverage of the allegation on Peters about the Kermadec dinner, and then fast forward to the extreme troughing of these born to rule Tories, which passes with hardly a whimper in the MSM and around the Gallery. Maybe it is time the Gallery started to declare their freebee perks and moonlighting jobs, just so we can all be on the same page over who is buying what influence with whom?

  19. I would have thought that Paula Bennett would have done her self a bit more good if she had gone on a diet instead of eating out with Westpac.
    Every time I see her I realise she will soon be costing the health system expenses that should be avoided .

    • Tom Gould 19.1

      Postman, they had both Paula and Gerry at the concert. That catering bill would have fed the average family for weeks, maybe months. I guess with the Westpac cash earnings up by 68 percent to $210m for the half, they can afford to treat these two to an ‘all you can eat’ buffet?

  20. The most disturbing influence in these sorts of transactions is the interpersonal socialising that is done.

    Humans are humans, and we operate at an interpersonal level. Politicians developing ‘relationships’ with people in corporations is far more insidious a form of influence on subsequent decision making than some notional dollar value associated with the socialising. Especially if the interactions are repeated and/or frequent and long-lasting.

    Also, gifts come along with a whole swag of social psychological inferences and deeply rooted norms that influence individuals – whether or not they are aware of those influences. There is so much research on this I don’t know where to start. Being given a gift, some ‘informal help’, being praised by someone, simply being smiled at by someone. All of these kindly dispose us to people in ways that affect our considerations later about issues that might affect that ‘someone’.

    In the US, for some reason, politicians are quite open about how money and gifts provide access to them. They then fight the battle on the claim that, of course, the money/gift hasn’t bought the decision – only ‘access’.

    But ‘access’ allows the kinds of interpersonal influences that matter in decision making. Those interpersonal influences work particularly well when a person is already predisposed to see the ‘someone’ (or their organisation) in a good light. 

    (The interpersonal interactions also occur between journalists and politicians, of course.)

    • McFlock 20.1

      Hell – Bennett got those family skills boxes in the budget based purely on the interpersonal factor, rather than anything so useless as a tender process…

    • PeteG 20.2

      Yep, we live in a complex wee world, don’t we.

      Blogs have obvious merit, but interpersonal interactions are mostly left out of that. That can have benefits and drawbacks – one of which is it can take a lot longer to get an idea of what different posters are really like – if you find out at all. Most do gradually reveal a degree of humanity.

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