Integrity Briefing: Can New Zealand avoid kleptocracy?

“Kleptocracy” is a chilling word, increasingly used internationally, especially in the United States under the shadow of Trumpism. Wikipedia explains that kleptocracy is “also referred to as thievocracy” or “a government whose corrupt leaders (kleptocrats) use political power to expropriate the wealth of the people and land they govern, typically by embezzling or misappropriating government funds at the expense of the wider population.”

While New Zealanders might recoil from applying such a loaded term to our own politics, recent troubling cases suggest we’re closer to this dangerous threshold than many might admit.

Latest example of conflicts of interest: Mayoral spending on a mate

Take Auckland Mayor Wayne Brown’s eyebrow-raising arrangement with his campaign manager turned lucrative contractor, Chris Mathews. Mathews transitioned seamlessly from unpaid campaign volunteer to receiving over $300,000 annually from Auckland ratepayers. The story was uncovered this week by Newsroom’s Todd Niall – see: Wayne’s mate’s rates – $300k a year contract

According to Niall, Mathews billed the Council “$302,000 in the full 2023-2024 financial year, and the payments continue at a similar rate, reaching $286,000 by April 2025” to provide “specialist strategic advice” to Brown. This places Mathews among Auckland Council’s highest-paid individuals, almost rivalling Brown’s own mayoral salary.

To compound matters, Brown and Mathews jointly own private companies — set up both shortly before and after Brown’s mayoral victory — companies initially undisclosed in Brown’s official register of interests. Of course, Brown’s office insists these arrangements are merely administrative oversights (“human errors”) and fully within existing council rules. Technically, perhaps. Ethically? Not even close.

This pattern of awarding publicly funded contracts to political insiders isn’t just an isolated bureaucratic blunder; it’s symptomatic of an increasingly lax attitude toward integrity in New Zealand politics. While Auckland Council’s own guidelines may permit Brown’s arrangement, the optics are alarming. Public money flowing so easily into the pockets of close political allies is precisely the kind of scenario that opens the door to systematic corruption.

Kleptocracy’s global rise: Anne Applebaum’s warning

If Wayne Brown’s situation sounds troublingly familiar, that’s because it fits a disturbing global trend expertly dissected by historian Anne Applebaum. Applebaum recently warned of a broad shift in governance away from democratic accountability toward outright kleptocracy, a system where political leaders explicitly leverage state resources to enrich themselves and their associates – see her recent Substack post: Kleptocracy, Inc – Crass conflicts of interest are now part of our system

For an even longer account of Applebaum’s concern about how the US is becoming more autocratic in favour of wealthy elites, see her article in The Atlantic this month: Kleptocracy, Inc. Under Trump

Applebaum argues convincingly that kleptocratic norms, once confined to authoritarian regimes like Putin’s Russia, have now infected established democracies, too. Politicians in democratic nations are increasingly brazen in mixing their private interests with public duties. Under Trump, America experienced this vividly, with private resorts hosting official events and foreign powers blatantly seeking influence through the President’s business dealings. Applebaum’s analysis serves as a stark global caution: without robust institutional safeguards, democracies slide swiftly from complacency into corruption.

New Zealand likes to think itself immune to such trends. Yet the Wayne Brown example demonstrates precisely how quickly institutional complacency can become institutional corruption. When rules are vague, enforcement weak, and public scrutiny minimal, kleptocratic behaviour doesn’t just become possible, it becomes inevitable.

New Zealand’s integrity illusion

Journalist Laura Walters recently offered a compelling diagnosis of our national predicament in her very good article: Growing calls for independent watchdog to keep politicians honest (paywalled). Walters puts forward evidence that New Zealand’s current political integrity systems, centred around ministerial conflict-of-interest disclosures managed by the Cabinet Office, are dangerously inadequate.

Walters cites multiple high-profile cases, including Minister Mark Patterson’s involvement in sensitive Cabinet discussions about the Emissions Trading Scheme, despite owning carbon forestry that directly benefited from those decisions. Similarly, Minister Andrew Hoggard faced minimal repercussions after his sister lobbied him intensely to drop stricter baby formula standards — which he subsequently did.

In Walters’ article, I am quoted, highlighted the fatal flaw at the heart of our integrity structures: they’re premised on an outdated assumption of inherent political virtue. As I argued, “The current systems are based on the idea that politicians in New Zealand have relatively high integrity, so we don’t need hard and fast rules; we don’t need total disclosure. But that clearly just hasn’t worked.” Indeed, Patterson and Hoggard’s examples vividly illustrate the consequences of such naïveté: minimal disclosure, lax enforcement, and zero accountability.

Perhaps most disturbingly, when Prime Minister Christopher Luxon was pressed on these scandals, he dismissed concerns, asserting comfort with the status quo. Luxon’s reaction exemplifies the complacency that Walters rightly critiques: a collective shrug, despite growing evidence of systematic integrity erosion. When leaders dismiss clear ethical failures as trivial, public trust is inevitably undermined. This is precisely the dynamic Applebaum warns precedes outright kleptocracy.

The Danger of complacency: A National blind spot

New Zealand’s lax approach to conflicts of interest is a cultural as well as institutional issue. Politicians often excuse integrity lapses by claiming New Zealand is too small to avoid intertwined personal and professional relationships. But size isn’t the real problem here — complacency is.

Unlike comparable democracies, New Zealand has deliberately chosen not to implement robust measures like “cooling-off” periods to prevent public officials from immediately entering industries they previously regulated, or vice versa. Instead, our system actively encourages a revolving door, freely spinning between lobbyists, government officials, and politicians. Predictably, conflicts of interest proliferate.

Reforming Integrity: Health Coalition Aotearoa’s framework

This complacency must end. Fortunately, Health Coalition Aotearoa recently provided clear, actionable proposals for reform of New Zealand’s conflict of interest rules — proposals I wholeheartedly support – see: Better Manage Conflicts of Interest

Their four urgently required reforms to prevent New Zealand sliding further toward kleptocracy are worth examining:

1. Overhaul Public Service Codes of Conduct

The Public Service Commission must create and enforce far stricter, clearer rules explicitly mandating comprehensive conflict-of-interest disclosures for all public officials, consultants, advisors, and board appointees. Vague guidelines simply won’t cut it. Transparent, publicly accessible declarations of financial and commercial interests should be mandatory and frequently updated.

2. End the Revolving Door

Strict mandatory “cooling-off” periods must apply both ways — preventing politicians and senior officials from immediately becoming lobbyists in sectors they regulated, and vice versa. Politicians moving from lobbying roles into ministerial offices should face stringent scrutiny, ensuring former industry loyalties do not compromise public policy.

3. Special Protections for High-Risk Policy Areas

Policymaking areas that face aggressive lobbying from powerful industries — such as alcohol, gambling, fossil fuels, unhealthy food, and tobacco — should receive special legal protections akin to the UN Framework Convention on Tobacco Control’s Section 5.3. Such regulations limit industry lobbying to transparent public submissions only, preventing covert influences from dictating public policy behind closed doors.

4. Establish an Independent Integrity Commissioner

The current system, with the Cabinet Office responsible for ministerial conflicts, is inherently compromised by its closeness to political power. New Zealand urgently needs an independent oversight body — an Integrity Commissioner or Commission — tasked solely with rigorous enforcement of conflicts-of-interest rules. Only an independent, publicly accountable agency can credibly monitor and enforce integrity standards.

These reforms aren’t radical; they’re common sense. They’re measures already adopted by other democracies determined to preserve democratic integrity and public trust. Implementing them isn’t about restricting politicians unfairly; it’s about safeguarding our democracy from the creeping dangers of corruption and complacency.

A Global movement: Integrity in the spotlight

The Integrity Institute’s mission to establish stronger, clearer integrity mechanisms in New Zealand is part of a broader global shift. Australia offers clear examples. Organisations like the Centre for Political Integrity and Open Politics now demand transparency by tracking politicians’ financial interests publicly. Their campaigns resonate because they address widespread anxiety about unaccountable political elites — a concern increasingly shared by New Zealanders.

This week, the Centre for Political Integrity has launched its “Political donor directory” of public data “to explore the flow of money in the Australian political system.” In this country, The Integrity Institute is developing something similar.

Meanwhile, Open Politics has launched a website dedicated to compiling and publicising data on the private interests of federal parliamentarians and their families. The organisation argues that “All property owned by politicians and their families should be made public”, which is what their website tries to do. The underlying rationale for advocating for greater disclosure is to identify and scrutinise potential conflicts of interest that could influence a politician's decision-making. Making financial interests public makes it possible to assess whether personal gain might be prioritised over public duty.

This is sorely needed in this country, too. And The Integrity Institute will be delivering something similar.

Conclusion: Choosing integrity over kleptocracy

Yesterday, writing in the Herald, rightwing columnist Richard Prebble detailed his current family holiday to Brazil, suggesting that New Zealand fares well compared to what he is seeing: “There is spectacular corruption. Despite the Integrity Institute (11) trying to convince us that this country is corrupt, we are not. In three decades in Parliament, no New Zealand company ever tried to bribe me” – see: Exploring Brazil: Challenges and opportunities for New Zealand trade (paywalled)

I’ll come back to challenge Prebble’s assertion another time. But for the moment, it’s worth noting, once again, that New Zealand’s biggest problem with integrity is our complacency – the notion that “there is no corruption in New Zealand” ends up being translated into a lack of safeguards or scrutiny of politicians and their relationships with vested interests. After all, if it is assumed that New Zealand businesspeople and politicians are trustworthy and beyond reproach, then there isn’t any need to have rules to prevent integrity violations.

Wayne Brown’s controversial Auckland arrangement, combined with the troubling patterns uncovered by journalists like Laura Walters and the global warnings from Anne Applebaum, provide a stark wake-up call. New Zealand is indeed at risk. We might not yet qualify as a kleptocracy — but our trajectory points alarmingly in that direction.

To ignore these warning signs, to dismiss ethical breaches as trivial, is to court disaster. Institutional complacency is not a solution; it’s an invitation for further abuse. The integrity reforms outlined above offer clear steps to safeguard our democratic norms and rebuild public trust.

If we don’t decisively act now, New Zealand risks becoming another cautionary tale of how complacency turns democracy into kleptocracy.

Dr Bryce Edwards

Director of The Integrity Institute