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Andrew Little’s Future As Party Leader In Doubt As Labour Caucus Meets

PoliticsFebruary 22, 2018

Conflict of interest concerns over lobbyist turned chief of Jacinda Ardern’s staff

Andrew Little’s Future As Party Leader In Doubt As Labour Caucus Meets

When GJ Thompson took leave from his lobbying firm to act as the prime minister’s chief of staff, he remained a director of the firm and his profile stayed in prime position on its website. How serious is the appearance of a conflict of interest, asks Asher Emanuel.

The government lobbyist who served for several months as chief of staff to the prime minister as the new government took office says he didn’t do any work for the lobbying firm of which he is part-owner while working at the Beehive. Nor, he says, was he paid by the business.

In response to questions on potential conflicts of interest, GJ Thompson, who advised the prime minister for five months ending last Friday, told The Spinoff he “declared the potential conflict at the very outset” and that it was for the Department of Internal Affairs to manage any conflict.

Thompson did not directly respond, however, to questions put to him on why his name and personal telephone number remained on the front page of the lobbying firm’s website while he was in service at the apex of the new government, or what steps were taken to address any conflicts of interest.

When Labour’s previous chief of staff, Neale Jones, left to become a lobbyist late last year, questions arose about conflicts of interest and the potential for disclosure of inside information.

But concerns over Jones’ move are dwarfed by those surrounding his replacement, GJ Thompson. Last Friday, Thompson concluded a five-month stint as Labour’s chief of staff. Before taking on the leading Labour position he was a partner at Thompson Lewis, the lobbying firm he founded in 2016. Having left the role, he has returned to Auckland and his firm to continue as a lobbyist.

His time advising Ardern leads in his promotional bio on the front page of the firm’s website, which boasts: “He spent five months as chief of staff to prime minister Jacinda Ardern, assisting the new government transition into the Beehive.” The firm’s blurb advertises its “strong political networks” and its partners’ “significant time in senior roles in Government and Opposition”.

The Thompson Lewis front page in January

The Spinoff asked the prime minister’s office whether Thompson’s clients were disclosed to the prime minister, how any conflicts were managed, and whether the prime minister knew Thompson remained a director and shareholder of his firm while we was working as chief of staff.

The PM’s office said these were questions for Ministerial Services as Thompson’s employer. But the prime minister was “aware that Mr Thompson was taking leave of absence from his company and not drawing a salary.”

In response to questions from The Spinoff about whether Thompson’s clients’ identities or simply his involvement with Thompson Lewis was disclosed to the department or the prime minister, and whether any formal decision was made about potential conflicts of interest, the Department of Internal Affairs, in which Ministerial Services is located, made no specific comment about Thompson other than the dates of his employment.

The department said it does not generally comment on specifics of an individual contract or employment issues.

The circumstances leave at least the appearance of a conflict of interest. Thompson’s contact details remained on the firm’s homepage alongside other lobbyists, and he retained his financial and governance interests as director and shareholder in Thompson Lewis throughout his time as chief of staff.

The Spinoff asked Thompson about these circumstances and how any conflicts of interest were managed, including whether the disclosure was about his role at the firm generally, or relating to particular clients.

Thompson responded: “Your questions are best directed to DIA [the Department of Internal Affairs] given they were the employer. DIA manages any potential conflict of interest. I declared the potential conflict at the very outset of my short-term appointment.”

“While I was temporarily working as chief of staff, I took a leave of absence from Thompson Lewis and did not work for the business at all”, he said.

“Nor was I paid by the business. I stepped out of the business completely. My time in the Beehive was always on a temporary basis so we took careful steps to manage it.”

Thompson did not respond directly to questions from The Spinoff whether he had professional contact with his firm while he was chief of staff.

The Thompson Lewis front page today

Less than a month ago he transferred shares in the firm to another lobbyist, Sifa Taumoepeau, who is now also a director. And very recently the firm announced a recruiting decision likely to have been made some time during Thompson’s five months as chief of staff: the appointment of Wayne Eagleson, former chief of staff to John Key and Bill English, as a consulting partner at the firm.

Asked by The Spinoff about the timing of these decisions and whether he was involved, Thompson said that while the transfer occurred during his time as chief of staff, the decision and terms were finalised while he was working for Thompson Lewis. He was not, he said, involved in the recruitment of Eagleson.

The Department of Internal Affairs said that all its staff, including ministerial staff, are required to sign the department’s code of conduct and the State Services Commission’s code of conduct. The DIA code includes provisions for actual and perceived conflicts of interest.

The State Services Commission code of conduct, which covers things like treating everyone with respect and being politically neutral at work (though ministerial staff are now exempt from the normal requirements of impartiality), also includes rules against conflicts of interest under the theme of Trustworthiness.

The guidance for state servants explains: “Any commercial activities, investments or other personal interests must not influence the work we do, and we must be open in declaring where our interests may potentially conflict with our responsibilities.”

The auditor-general has published guidance for public entities on conflicts of interest. The guidance explains that decisions about managing conflicts of interest are “not primarily about about the risk the misconduct will occur” but the “seriousness of the connection between the two interests.”

According to the auditor-general’s guidance it is for the public entity, in this case the department, to determine how to mitigate the conflict of interest. The various mitigation options suggested include the employee being excluded from involvement with a particular matter in which they have an interest, or withholding certain confidential information from the employee.

Where mitigation is not possible, the guidance suggests that the person should not be in the job at all. “Occasionally a conflict of interest may be so significant or pervasive that the member or official will need to consider divesting themselves entirely of one or other interest or role.”

It remains unclear from the answers provided by Thompson, the prime minister’s office, and the Department of Internal Affairs whether Thompson disclosed his clients’ identities or simply that he was involved in Thompson Lewis, though that question was put directly to all three.

Without knowing who Thompson’s clients are, it would have been challenging for the department and the prime minister’s office to decide what steps should be taken to mitigate potential conflicts of interest, such as what information Thompson should have had access to, and whether he should have resigned his directorship of the firm.

A director has legal duties to a company, including to act in the best interest of the company, which they cannot delegate to another director short of resigning. It is possible that by remaining a director Thompson risked at least a tension between his duties to the firm as director, those to the prime minister as her advisor, and those to his employer under the code of conduct.

Thompson was highly qualified for the role, having served as press secretary to Helen Clark and chief of staff and chief advisor to Phil Goff after Labour moved to opposition in 2008. He is one of several Clark-era staffers involved in the early days of the new government, including Heather Simpson, Clark’s former chief of staff, and Mike Munro, Clark’s former chief press secretary. Munro is now Jacinda Ardern’s chief of staff following Thompson’s departure.

Thompson is also an experienced lobbyist. He was head of external communications for SkyCity from 2012 to 2014. At the time, the NBR praised his appointment as savvy given his former boss, Phil Goff, had then recently taken the Auckland mayoralty and SkyCity was trying to stand up its Auckland Convention Centre: “Gordon Jon Thompson is a well-connected chap ideally qualified to win over skeptics to the cause of the controversial $350 million convention centre.”

Later, from 2014 to 2016, he did the same job for Fonterra who was then, and still is, locked in the fight of its life over the environmental impacts of dairying, a PR battle on which it has lately been spending $6 million a year only to get repeatedly owned online.

After leaving Fonterra, Thompson established his own lobbying firm with David Lewis, another Clark-era staffer (press secretary, speechwriter and later chief press secretary to Clark) and manager of Phil Goff’s campaign to become mayor of Auckland.

As with the rise of partisan lobbyists in Wellington, senior party roles being held by lobbyists is an Australian phenomenon that has made its way to New Zealand.

Before Malcolm Turnbull banned his ministers from having sexual relationships with their staff, Tony Abbott implemented a ban of his own, prohibiting lobbyists from holding senior official roles in the Liberal Party, citing risks of corruption.

The ban didn’t last long, with The Australian reporting in 2016 that several lobbyists continued to act as “factional warlords in the NSW Liberal Party” despite Abbott’s efforts. And late last year, a potential failure to comply with lobbying regulation drew attention to the fact that the president of the Australian National Party is the executive director of a lobbying firm which represents substantial energy interests.

This morning Transparency International released its Corruptions Perception Index which ranks the New Zealand public sector top of the list of 175 countries, though New Zealand’s score of 89 out of 100 was down one point from the previous year.

The open government minister, Clare Curran, celebrated the result as reflecting “the high standards of conduct and integrity we hold ourselves to across the public sector”, but also warned against complacency.

“We must not be complacent. These results show we are not immune to behaviour and actions that can erode the great work done by the majority of people in the public sector”, she said.

Risks of corruption aside, political scientist Bryce Edwards, speaking to RNZ about his coverage of Thompson’s appointment, explained why he was concerned about changes in the lobbying industry: “There is increasing suspicion about what is basically a political class.”

“A lot of people — in especially the Wellington circles — that work in government departments, work in ministers’ offices, or are politicians, then work in the media, they work in PR, they work in lobbying. It’s all a bit too close, I think. It’s a very cohesive political class.”

Thompson told The Spinoff he has spent over 20 years as a journalist, working in parliament and for some of New Zealand’s largest companies. “During this time, I’ve developed long-standing contacts in media, politics and business.”

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