Integrity Briefing: Trump’s corruption – A Cautionary tale for NZ

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By Bruce Curtis and Bryce Edwards

New Zealanders have long taken pride in the country’s supposed cleanliness, including in politics. We sit near the top of global anti-corruption perception rankings, and there’s a confident belief that “it couldn’t happen here.” But if one story should shatter our complacency, it’s the extraordinary decline of integrity unfolding under the current Donald Trump presidency in the United States. The open cronyism, conflicts of interest, and contempt for oversight witnessed in Washington DC are a stark cautionary tale. Trump’s second term – rife with pay-to-play deals, self-enrichment schemes, and the dismantling of watchdog institutions – shows how quickly democratic norms can erode when leaders put personal and vested interests above the public good.

The uncomfortable truth is that New Zealand, despite its squeaky-clean image, lacks many of the safeguards that could prevent a similar slide. Our protections are weak, our assumptions dangerously naïve, and recent events at home suggest we are far from immune to an integrity crisis. In this Integrity Briefing, we’ll examine Trump’s “looting of America” and draw lessons for New Zealand, arguing that without urgent reform, our democracy could follow a similar trajectory of complacency and corruption.

Trump’s second term: A Masterclass in cronyism and corruption

Donald Trump’s second term has become a masterclass in how to accelerate the decay of democratic integrity. In the first weeks of his return to the Oval Office, Trump moved with brazen haste to strip away the guardrails that had previously kept corruption in check. He stocked his administration with loyalists and cronies, often choosing people based on personal loyalty or financial connections rather than merit.

This includes family members and former business associates in key roles, blurring the line between the public interest and the Trump family’s private interests. The Trump Organization never meaningfully stepped away from the presidency; instead, the presidency became an extension of the family business. Trump’s daughter Ivanka and son-in-law Jared Kushner held senior White House positions in his first term, and the second term appears no different in its nepotism.

The commodification of public office has reached new heights: foreign governments and wealthy individuals know that patronising Trump’s private resorts or businesses is an effective way to curry favour. From Mar-a-Lago memberships to staying at Trump-branded hotels, access to the President could practically be purchased – the very definition of pay-to-play politics.

Perhaps most alarmingly, Trump’s personal financial entanglements are now thoroughly interwoven with US policy. Since his re-election, Trump has openly monetised the presidency. He launched a new cryptocurrency venture even as his administration considered policies affecting digital assets. The Trump Organization inked lucrative deals for hotels and golf resorts in places like Vietnam, Saudi Arabia and the UAE while those countries’ relations with Washington hung in the balance.

Government ethics experts warn that the President’s private business interests may be influencing American foreign policy. In other words, the lines between Trump’s public duty and his private gain have all but disappeared. “It’s the most corrupt start that we’ve ever seen in the history of the American presidency,” observed one US ethics watchdog as Trump set about removing constraints on his power. The rampant conflicts of interest – making policy decisions that directly enrich himself, his family, or his political benefactors – would be scandalous in any normal administration. Under Trump, it’s the new normal.

Lobbying deregulation and corporate influence have also defined Trump’s second term. On Day One, he rescinded the ethics order put in place by the previous administration, allowing his officials to accept gifts from lobbyists and scrapping rules that banned aides from quickly spinning through the “revolving door” back to lobbying jobs. In effect, Trump green-lit a lobbying free-for-all in Washington.

Industry lobbyists and corporate insiders have been welcomed into the highest levels of government, often tasked with overseeing the very sectors they once lobbied for. Environmental regulations are now guided by former oil and coal industry lobbyists; consumer protections are in the hands of ex-bankers. By deliberately erasing ethics rules and inviting lobbyists to run the show, Trump has signalled that the policy agenda is up for sale to the highest bidder.

In one brazen move, he even ordered a halt to enforcing America’s flagship anti-bribery law – the Foreign Corrupt Practices Act – claiming US companies needed freedom to “engage in practices common among international competitors”. In plainer terms, he gave a green light for American corporations to bribe foreign officials if it helps their business, abandoning a decades-old ethical standard. It’s deregulation not just of industry, but of integrity itself.

Meanwhile, Trump has systematically dismantled oversight and accountability mechanisms that could check his power. Inspectors-general – the independent watchdogs in federal agencies – were fired en masse in a late-night purge. Prosecutors and FBI agents who dared investigate Trump or his allies have been sacked or intimidated. Offices responsible for ethics and whistleblower complaints have seen their leaders forced out.

“The end goal is to avoid accountability this time,” notes a Princeton historian, pointing out that Trump isn’t just counting on political allies to shield him from scandals – he’s removing the people whose job is to expose wrongdoing. Indeed, Trump has acted quickly to neutralise the rule of law: at the Justice Department, he purged officials involved in investigating his mishandling of classified documents and his attempt to overturn the 2020 election. He demanded lists of civil servants who worked on those investigations, vowing to “surgically” fire them. Career public servants are being replaced with loyalists who see their duty as to Trump personally, not the Constitution.

This politicisation of law enforcement and oversight is how democracies slide into kleptocracy – government by thieves. Trump’s presidency is no longer hemmed in by watchdogs, lawyers or judges; he’s openly defying anyone to “stop me if you dare”. With Congress largely complicit, the traditional checks and balances are faltering. America is witnessing in real time how a democracy can descend into a cult of personality and cronyism when the integrity guardrails are ripped out.

Not just an American problem – A Warning to New Zealand

For New Zealanders watching this spectacle, it’s tempting to think: that’s America’s problem, not ours. After all, the US has always had a rough-and-tumble political culture of lobbyists, big money and partisan warfare – contrasts often drawn with New Zealand’s relatively genteel politics.

But dismissing the American crisis as uniquely American would be a dangerous mistake. The integrity failures we’re witnessing in the United States are a live demonstration of how quickly democratic norms and institutions can be eroded, even in a country with strong institutions and a long history of constitutional checks. If it can happen there, it can happen anywhere. America’s experience is a canary in the coal mine for other democracies, including our own. As former New Zealand Prime Minister Sir Geoffrey Palmer has cautioned, the corrosive effects of Trumpism “will not be restricted to the United States” – it’s a wake-up call to shore up our defences.

New Zealand traditionally prides itself on the myth of low corruption and good governance. We regularly tout our top-tier ranking on Transparency International’s Corruption Perceptions Index. But that very pride can distract us from the latent vulnerabilities at home.

In fact, our reputation for being “clean” is masking systemic weaknesses – weaknesses alarmingly similar to the cracks now exposed in the American system. The truth is that many of the integrity protections Americans took for granted (until Trump bulldozed through them) are barely present in New Zealand to begin with. We have been coasting on convention and trust rather than law and independent enforcement. A determined leader or group here could exploit these gaps just as ruthlessly as Trump has in the US.

Consider the role of political donations and money in politics. New Zealand’s electoral finance laws look tame compared to America’s tighter rules. Our parties still rely heavily on wealthy donors, and there are minimal limits on donation size. In the US, contributions to candidates are capped (the big money flows through outside PACs and dark-money groups).

In New Zealand, anyone can write a six- or seven-figure cheque to a political party, as long as they’re a citizen or resident. Until recently, those megadonors could even remain anonymous up to NZ$15,000 a pop – a loophole that was only partially closed in 2023 by lowering the public disclosure threshold to $5,000. Donors have routinely taken advantage of our lax rules by splitting donations across different entities to hide their identity, or funnelling money through trusts and foundations. (The notorious NZ First Foundation case exposed how party insiders could channel large sums from hidden donors while technically complying with the letter of the law.) We still have no caps on total donations, and no restrictions on corporate or interest-group funding apart from a ban on foreign donations over $50.

In short, our political finance system is wide open to those with deep pockets, and influence can be quietly purchased in ways the public often never learns about. The last election saw record amounts of money pour into campaign coffers, much of it from millionaires and corporations whose interests are now high on the agenda of the government.

The risk is clear: policies on housing, taxation, the environment and more quietly skew toward those who bankroll campaigns. If Trump’s America is a guide, pay-to-play politics will flourish wherever the rules let it. New Zealand’s rules, frankly, have more holes than safeguards.

Then there’s lobbying and influence-peddling, an area where New Zealand is startlingly behind international best practice. Wellington’s corridors of power are essentially a regulation-free zone for lobbyists – a situation that we have previously dubbed “the wild west of lobbying”. Unlike the US, Canada, Australia, or most European democracies, New Zealand has no mandatory public register of lobbyists, no transparency requirements, no enforceable code of conduct, and no cooling-off period for politicians or officials who become lobbyists.

In Washington, as “swampy” as it might be, lobbyists must register and disclose their clients and meetings (and they can be jailed if they don’t). In Wellington, by contrast, influence is peddled largely in the shadows – we often don’t even know who is lobbying whom on whose behalf. Top lobbying firms are stacked with a who’s who of former ministers, MPs, and advisors, trading on personal connections with the current government. Four out of five of the Prime Minister’s Chiefs of Staff between 2017 and 2023 went straight into lobbying after leaving their taxpayer-funded jobs.

These lobbyists leverage friendships and insider knowledge gained in government to get privileged access for their clients – all entirely legal under our non-existent rules. Meetings happen over coffee or via text message with ministers, leaving virtually no paper trail. One recent OIA release showed a former Minister’s chief of staff-turned-lobbyist casually texting a Cabinet Minister (a personal friend) to shape policy for a corporate client. No rules to follow, no laws to break, and no watchdog to bark.

This laissez-faire approach is precisely what Trump has exploited in the US by removing American lobbying restrictions, essentially bringing Washington closer to Wellington’s level of laxity. The irony is thick: a New Zealand-style absence of lobbying regulation has become the model for Trump’s America, rather than the other way around. And if we think our “light touch” approach to lobbyists isn’t hurting anything, consider that in NZ we have no idea how many lobbyists are operating or who their clients are. We’re flying blind — just how vested interests like it.

Our conflict of interest rules and oversight mechanisms are similarly weak. New Zealand relies heavily on the honour system – we trust that ministers and MPs will declare their private interests and recuse themselves if a conflict arises. The Cabinet Manual and MPs’ Register of Pecuniary Interests provide only basic guidance.

But as we’ve seen in case after case, this system is prone to abuse and “friendly” cover-ups. In the past two years alone, multiple ministers in the previous government were caught out in serious conflicts scandals. Minister Michael Wood was forced to resign in 2023 after it emerged he owned tens of thousands of dollars in Auckland Airport shares while serving as Transport Minister making decisions affecting the aviation sector. Wood had been warned 12 times to divest but “forgot,” putting personal profit over public duty.

Another senior Minister, Stuart Nash, was sacked after he was found to have shared confidential Cabinet information with wealthy donors who had a stake in the decisions – essentially tipping off his mates on government plans. Nash even lobbied for a donor’s business associate to get a government appointment, then tried to delete the evidence.

And then there was the saga involving Nanaia Mahuta, whose husband and other relatives scored a string of government contracts in portfolios she oversaw. An investigation found the process around those contracts was badly managed, creating a perception of nepotism and “poor handling of perceived conflicts of interest”. Even if there was no deliberate favouritism, it certainly looked like a minister’s family benefitting from her position – and in democracy, perception matters.

What was the consequence of these transgressions? In each case, it took media exposure and public pressure before any action was taken. There is no independent commission or official proactively policing ministerial ethics.

The Prime Minister of the day essentially plays judge and jury when conflicts arise, an approach that leaves the fox guarding the henhouse. As a result, politicians have treated conflict rules as toothless guidelines. “Ministers routinely get away with behaviour that would see ordinary workers fired,” the Integrity Institute has noted, precisely because enforcement is so lax. The scandals of 2023 finally caused a public outcry, to the point that even a whiff of conflict became politically untenable. But that shift in tone is recent and by no means locked in. Without formal oversight, it’s all too easy for a complacent “she’ll be right” attitude to return.

New Zealand’s vulnerability is compounded by our small size and tight-knit elites. In Wellington, everyone knows everyone. Politicians, business leaders, lobbyists, and media figures often move in the same social circles. On one hand, this can make for a collegial political culture.

On the other, it’s fertile ground for what we have called “NZ’s chumocracy,” where a cosy club of insiders greases the wheels for each other and keeps criticism in check. Favours are granted on a first-name basis. We’ve seen public contracts quietly awarded to mates, regulators going easy on well-connected firms, and top jobs given to former politicians (for example, the appointment of a former party leader to a high-paying agency chair raised eyebrows about political favouritism).

Informal relationships often trump formal rules, which is exactly how “legal corruption” takes root in systems that look clean on the surface. New Zealand’s high trust in government can actually enable abuse: when Kiwis assume their leaders are incorruptible, we’re less likely to scrutinise or demand robust safeguards.

We risk waking up one day in an environment of normalised cronyism and saying “how did that happen here?” – the very question many Americans are now asking themselves after witnessing the erosion of checks on Trump.

The lesson from the American experience is that integrity can decay faster than we ever imagined. Democratic norms that took generations to build can be upended in a matter of months by a leader determined to break them. Many of the US “guardrails” that Trump bulldozed were not laws, but conventions – much like New Zealand’s unwritten rules and gentleman’s agreements.

For instance, in the US it was an established norm that presidents divest from their businesses and release their tax returns to avoid conflicts – Trump simply refused, and the sky didn’t fall, at least not immediately. Similarly, a norm existed that the Justice Department operates independently of White House political interference – Trump shattered that by demanding personal loyalty from officials and punishing those who upheld the law over his interests. Once those norms were violated without consequence, they effectively ceased to exist.

New Zealand’s system is just as reliant on good faith and convention. A Prime Minister here, if so inclined, could ride roughshod over our uncodified constitutional principles – say, by stacking the public service with loyalists, bypassing transparent hiring processes, or firing independent officials who get in the way. A government with a parliamentary majority can rush through laws under urgency with minimal debate (a practice already overused, critics say). A minister determined to enrich friends could steer contracts their way, and if the Prime Minister decided to shrug it off, there is no independent ethics czar to stop it.

In short, we are protected right now mostly by the fact that no leader has chosen to exploit our system’s weaknesses. That is not a comforting thought, it’s an alarm bell. The US never thought a president would brazenly flout the unwritten rules, until one did. New Zealand should not wait for a homegrown version of that nightmare to test our system’s limits.

Shoring up our democracy – Reforms to protect New Zealand’s integrity

The American turmoil under Trump’s presidency is a vivid reminder that integrity in government is not self-maintaining – it survives only with vigilant upkeep and robust safeguards. If New Zealand is to avoid a similar democratic backslide, we must act decisively to reinforce the foundations of clean government. Complacency is no longer an option. We must shore up the systemic weaknesses in our political framework before they are exploited by a less scrupulous generation of leaders. Here are key reforms that New Zealand should implement urgently to bolster our democratic integrity:

Establish a Lobbying Register and Rules: It’s past time to end the “wild west” era of unregulated lobbying. New Zealand should create a mandatory, public register of lobbyists and require disclosure of which clients are meeting with which officials about what issues. A statutory code of conduct for lobbying must set ethical standards. We should also impose meaningful stand-down periods (cooling-off periods) so that ministers and senior officials cannot waltz out of office and immediately into lobbying jobs (or vice versa) without a decent interval. Many comparable democracies ban ex-ministers from lobbying their former colleagues for 1–2 years; we currently have no such rule. Implementing these measures would bring us in line with international best practice and help prevent the next revolving-door conflict of interest before it starts.

Reform Political Donations: We need comprehensive political finance reform to close the loopholes that allow money to distort our politics. This should include caps on the size of donations to political parties and candidates – a reasonable limit that still allows support but prevents any one donor from buying outsized influence. We must ban or tightly regulate secretive fundraising vehicles like trusts, foundations, and “charity dinners” that currently facilitate big donations behind closed doors. The recent lowering of the disclosure threshold to $5,000 was a good step. Still, we can go further: require real-time disclosure of large donations (so voters know before an election who’s funding whom) and aggregate donations from related sources to prevent easy splitting. Transparency is key – every significant dollar in politics should be traceable. Levelling the playing field might also mean increasing public funding for parties or campaigns, to reduce reliance on private money. The principle is simple: the influence market needs to be tamed so that policies serve the public interest, not wealthy patrons.

Empower Independent Oversight: New Zealand would benefit enormously from an independent watchdog dedicated to government integrity – an anti-corruption commission or Integrity Commissioner. This body should be well-resourced and legally empowered to investigate corruption, conflicts of interest, lobbying impropriety, and breaches of ethics across the political system. It could act on tips from whistleblowers, audit officials’ financial disclosures, and enforce the rules with real penalties. Right now, if a minister behaves corruptly, consequences depend on media exposure and a Prime Minister’s willingness to fire them; an independent commission could make sure there’s accountability beyond politics. Nearly all Australian states, and now the Australian federal government, have anti-corruption commissions that have uncovered serious misconduct. New Zealand’s Serious Fraud Office and Ombudsman have narrow mandates and reactive roles – we have nothing that provides proactive, comprehensive oversight of integrity in public office. An Integrity Commission could fill that gap, helping to restore public trust that someone is watching the watchers.

Strengthen Conflict of Interest Rules: We should revise and toughen our conflict-of-interest policies for ministers, MPs, and senior officials. Clear, specific rules (backed by law) are needed to replace vague conventions. For instance, mandatory divestment or blind trusts for ministers holding assets that relate to their portfolio – no more “forgetting” to sell shares while regulating an industry. All family and financial ties that could even appear to influence decision-making should be declared and either managed transparently or eliminated. Crucially, these rules must be monitored by an independent authority (the Integrity Commission could do this) rather than relying on the honour system. We saw under Trump in the US what happens when a leader simply ignores conflict-of-interest norms; we should pre-empt that here by codifying expectations and consequences. The Cabinet Manual could be given legal force or supplemented with legislation so that breaches have teeth. Sunlight and enforcement can ensure that public officials truly act in the public interest, not their own interest or their friends’.

Upgrade Transparency and Accountability Tools: A robust Official Information Act (OIA) is essential so that journalists and citizens can shine light into the corners of government. Our OIA system is decades old and creaking – slow response times, excessive withholding, and a culture of avoidance have undermined its effectiveness. We should modernise the OIA for the 21st century: impose stricter timelines, fewer carve-outs, and penalties for unjustified secrecy. Proactive disclosure of information by default should be encouraged. Similarly, Parliamentary oversight needs a boost – empowering select committees, for example, to scrutinise executive decisions with more independence (including giving opposition and backbench MPs greater ability to launch inquiries). Strengthening protections for whistleblowers is another piece of the puzzle; insiders must feel safe to report corruption or abuse without fear of retaliation. And we should support a vibrant free press – one of the best defences against creeping corruption is investigative journalism capable of exposing misconduct. In the end, a culture of transparency makes it much harder for the kinds of secret deals and norm-breaking that have proliferated under Trump to take hold here.

Foster a Culture of Integrity: Laws and institutions are critical, but so is cultural change. New Zealand must shed the complacent notion that “we’re less corrupt by nature.” We need sustained civic education and public discussion about the importance of integrity in government. Politicians and public servants should receive regular training on ethics standards. Parties could adopt internal codes of conduct around fundraising and conflicts. If the public makes it clear that we care deeply about these issues – that we will reward ethical behaviour and punish misconduct at the ballot box – then political leaders will respond. Sunshine, accountability, and a public that refuses to tolerate corrupt behaviour are our best vaccines against the infection that has afflicted American politics.

New Zealand’s reputation for integrity is a precious asset – but it is only as good as the systems that uphold it. The United States under Donald Trump provides a terrifying real-world case study of democratic erosion. It demonstrates with brutal clarity how quickly a nation can descend into kleptocracy when its integrity guardrails are weak, unenforced, or deliberately dismantled.

For New Zealand, the overarching lesson is the urgent need to reject our national smugness. The story of America’s decline is not a partisan tale; it is a structural one. The weaknesses in our own system – unregulated lobbying, opaque political donations, feeble oversight, and a culture of “she’ll be right” complacency – are not abstract worries. They are active vulnerabilities that could be exploited by anyone with the ambition and lack of scruples to do so. We now have the opportunity to fortify our defences and harden our laws and institutions against corruption and cronyism before we face a crisis. The path forward is clear; numerous experts and watchdog groups have called for these reforms for years. What is needed is the political will to enact them.

New Zealand must choose: do we continue to trust in our lucky reputation and hope that no leader here will ever push us down the path of such democratic decay? Or do we take proactive steps to ensure that our system is strong enough to withstand the pressures that have caused others to falter?

The American experience is a harsh reminder that integrity, once lost, is hard to regain. We would be wise to heed that warning. The United States has shown us the catastrophic price of inaction. We need only look at the chaos, division, and institutional wreckage left in the wake of Trump’s abuses.

Let’s not learn the same lesson the hard way. It’s far cheaper to invest in prevention: tougher rules, sharper oversight, and a vigilant political culture. Our democracy’s strength is not a given – it’s something we must build and protect. The time to shore up the ramparts is now, before a storm hits. New Zealand can and must do better, ensuring that the phrase “it couldn’t happen here” isn’t a complacent hope, but a confident reality grounded in strong, enduring integrity systems. Our future as a resilient democracy depends on it.

Dr Bryce Edwards (Director of The Integrity Institute) and Professor Bruce Curtis (Lead Researcher, The Integrity Institute)