PoliticsJune 19, 2019

Nothing to declare: new questions in lobbyist-turned-chief-of-staff saga


Correspondence released under the OIA suggests that GJ Thompson, the lobbyist who took a ‘leave of absence’ to work alongside Jacinda Ardern, failed to meet undertakings to alert managers as conflicts arose, writes Asher Emanuel

The lobbyist who served as the prime minister’s closest adviser during the early days of the coalition government appears to have failed to comply with commitments he made to disclose conflicts of interest on an ongoing basis, according to documents released to The Spinoff under the Official Information Act.

Gordon Jon (GJ) Thompson, who founded lobbying firm Thompson Lewis in 2016, was appointed interim chief of staff to the prime minister, Jacinda Ardern, shortly after the formation of the government in late 2017 to help set up the new administration. Thompson’s appointment was short-term, to stand in for Mike Munro who was unwell at the time. After four months in the role — during which he had access to all Cabinet papers and was involved in the appointment of over 100 ministerial staff — Thompson returned to his firm to lobby the government on behalf of private clients.

The prime minister recently told parliament that the potential conflicts of interests were managed because Thompson was subject to codes of conduct and signed a declaration about conflicts of interest.

But documents show Thompson’s initial disclosure to Ministerial Services didn’t identify the firm’s clients and suggest that Thompson failed to comply with the undertakings he had made in the declaration to keep Ministerial Services informed on an ongoing basis about potential conflicts of interest, raising questions about a breach of government rules around conduct in the public service.

These lapses are the latest in a series of controversies beginning with the news of Thompson’s appointment as chief of staff while remaining a director of his lobbying firm, through to recent revelations that he represents technology company Huawei, which is lobbying the government after being blocked from involvement in Spark’s 5G cellular networks by the GCSB.

‘GJ is to check in from time to time’

When he took up the role as chief of staff, Thompson signed a declaration of conflict of interest which recorded that he was director of a firm which advises clients “on dealing with central government, parliament and government departments”. The declaration did not identify any of his firm’s clients or areas of operation but simply that Thompson is a director and shareholder of the firm.

The declaration noted the potential for conflict between Thompson’s work as a lobbyist and the chief of staff’s conventional role in the appointment of ministerial staff, such as ministerial advisers who assist ministers with political and policy issues. After returning to his firm, Thompson’s work would include lobbying the same people he had helped hire.

Under the heading “Solution”, Thompson agreed to keep in contact with Ministerial Services to ensure he was not working on matters where his firm might be involved.

From the Department of Internal Affairs Conflict of Interest Declaration Form, signed by Thompson and his manager November 1, 2017

“GJ is to check in with [his manager] from time to time to ensure he is not directly involved in work with and/or advocating with Thompson Lewis members/employees and is at arms’ length from any of their transactions/operational dealings,” the declaration records.

His offer of employment made it clear that he was required to discuss potential conflicts of interest, real or perceived, as they arose, with his Ministerial Services manager.

“If a conflict of interest is identified through the course of your employment (whether this is deemed real or perceived), you must discuss this with your Portfolio Manager and complete the Conflict of Interest Declaration form”, the letter read.

An official information request for any communications between Thompson and Ministerial Services about conflicts of interest show that over a month into the job Thompson wrote to his manager restating his interest in the firm in general terms.

“As per our discussion in October, and DIA’s letter of offer to me, I am currently taking a leave of absence from my business,” Thompson wrote to his manager a month after starting in the role.

“I am not doing any work for Thompson Lewis while I am interim chief of staff.”

Again, Thompson did not identify any of the firm’s clients or areas of work.

In December that year Thompson declared a possible conflict of interest because his brother, Paul Thompson, is the chief executive of Radio New Zealand. He provided an assurance he would not be involved in work relating to RNZ or discuss work related matters with his brother.

But that is where the paperwork relating to conflicts of interests ends. Thompson appears never to have identified any of his clients or, as the declaration required, remain in contact with his manager to ensure he was not working on matters where his firm was also involved.

Asked whether he did check in with his manager to ensure conflicts were managed, Thompson said: “Yes, the conflict was declared and managed.”

Clients unknown

Thompson declined several opportunities to clarify whether he was referring to his general declaration about his role in the firm, or whether he ever told his manager the identity of any clients or the firm’s areas of work.

The Prime Minister’s Office echoed Thompson’s answer in response to an invitation to comment on the specifics of whether clients’ identities were ever disclosed, and whether the prime minister was aware of the limited disclosure Thompson had made.

“The potential conflict of interest was identified and declared to Ministerial Services, and managed by them as Mr Thompson’s employer. We refer you to Ministerial Services for any further questions”, a spokesperson said.

Ministerial Services declined to answer whether Thompson told his manager about his client’s identities, insisting that it would deal with The Spinoff’s questions under the department’s official information request process.

Neither the prime minister nor Ministerial Services were provided with a list of Thompson’s firm’s clients. Chris Hipkins, Minister responsible for Ministerial Services, said in answer to a written parliamentary question that Ministerial Services “did not request, and was not provided with, a list of Thompson Lewis’s clients at any point before or during GJ Thompson’s time as the Prime Minister’s Interim Chief of Staff.” The prime minister also told parliament she had not received a list of the clients.

Without having seen a list of the firm’s clients, and in the absence of Thompson alerting Ministerial Services to any real or potential conflicts related to clients as they arose, it is difficult to see how the prime minister’s office or Ministerial Services could identify or manage any conflict between the interests of his firm’s clients and the interests of the government.

At least two of the firm’s known clients — Huawei and property developer Darby Partners — seem likely to have had interests affected by government policy.

The State Services Commission’s standards for managing conflicts of interest require organisations to keep clear records so they show any “specific conflict has been appropriately identified and managed”.

“It is important that we do not take a legalistic and minimalist approach this type of disclosure, but show the openness necessary to provide public comfort that our actions are not affected by our personal interests”, says the Commission’s guidance on the code of conduct to which Thompson was subject as a Ministerial Services employee.

The auditor-general’s guidance on the management of conflicts of interest says it is better to disclose potential conflicts if there is any uncertainty.

“If [an] official is uncertain about whether or not something constitutes a conflict of interest, it is safer and more transparent to disclose the interest anyway,” the guidance states.

“The matter is then out in the open, and the expertise of others can be used to judge whether the situation constitutes a conflict of interest.”

More than a technical matter, requirements for ongoing disclosure of potential conflicts reflects the fact that some conflicts can be unforeseen at the beginning of a job.

“Disclosure of conflicts of interest is a continuous process as interests change and new conflicts may emerge in the course of day to day business,” the State Service Commission guidelines say.

“An example of this is where it becomes apparent before or at a meeting that an attendee has a conflict of interest with regard to an item on the agenda.”

‘You cannot be a sleeping director’

Thompson told the Spinoff last year that in his time as chief of staff he had taken a “leave of absence” from the firm and “stepped out of the business completely”.

In answers to written parliamentary questions from MP David Seymour relating to Thompson’s position as a director and shareholder of Thompson Lewis, the prime minister said: “Mr Thompson took a leave of absence from these roles during the period of his employment.”

However, Thompson remained a director of the firm, and his name and cellphone number remained on the company’s public website.

Companies Office records show that he did not resign his role as director. A company law expert told the Spinoff it is not possible to take a “leave of absence” from a directorship and that Thompson’s legal duty to act in the best interests of his company would have persisted during his employment as chief of staff.

“A directorship exists independently of an employment relationship. Of course a director might also be an employee and as an employee might take leave (paid, unpaid, whatever) from the employment role,” said Victoria Stace, a company law lecturer at Victoria University.

“But they remain a director and you cannot be a ‘sleeping director’. As a director you retain all the duties under the Companies Act until you resign as director.”

Thompson, who worked as a senior communications adviser for SkyCity and Fonterra before founding his lobbying firm, has previously said that conflicts were properly managed during his tenure as chief of staff.

“My time in the Beehive was always on a temporary basis so we took careful steps to manage it,” Thompson told The Spinoff in February last year. He told RNZ that the situation was “handled well”.

During the first four months of the new government, Thompson’s power in Wellington was unrivalled among political appointees. Thompson’s role as Chief of Staff, according to employment documents released to the Spinoff, was “providing support to establish and support the high-level structures, relationships and processes for the incoming government and Prime Minister’s Office.”

He had some involvement in the appointment over 100 staff to ministerial offices and access to all Cabinet papers, which range from mundane to critical, and from the essentially public to the literally Top Secret. According to reporting by Newsroom, people in the lobbying industry say Thompson is “open about the influential role he played in helping pick cabinet ministers and their staff.”

Two months after Thompson returned to the firm, the government called in Thompson Lewis for PR advice, according to media consultant Bill Ralston in a column written for the Listener.

“Thompson Lewis is now said to be exercising its considerable crisis management skills for the Ardern Government to some effect”, Ralston wrote.

The Gordon Thompson website touts its staff’s “significant time in senior roles in Government and Opposition” and “strong political networks”.

A spokesperson for the prime minister previously told Newsroom that she does not receive professional advice from Thompson. And, though the prime minister “seeks Mr Thompson out as a sounding board from time to time”, the two never discuss his clients and business.

The prime minister recently defended her continuing relationship with Thompson after his work for Huawei became public, saying that New Zealand is a small country and “overlaps” are inevitable.

“The important thing,” she said on One News, “is that we manage those conflicts.”

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