Should government departments be giving contracts to lobbying firms?

Is it a problem that lobbying firms are being given contracts by government departments? Such firms, who assist private businesses and vested interests in their bid to influence government, are being hired by the government and given access to decision-making processes and officials, therefore potentially providing private sector clients with privileged access to power.

In other countries, this conflict of interest would be regarded as an unacceptable threat to the democratic process. But here in New Zealand, there don’t appear to be any specific rules or guidance for government departments about employing firms that are involved in lobbying activities.

SenateSHJ

Guyon Espiner has published a story about the Commerce Commission’s employment of PR and lobbying firm SenateSHJ. Espiner’s article, published yesterday on the RNZ website details how although SenateSHJ has at various times had clients in the grocery, energy, and building sectors, the firm also worked for the state agency that is regulating those exact same sectors – see: Lobbying and communications firm Senate's ‘wildly inappropriate’ contracts at Commerce Commission revealed.

According to Espiner, the lobbying firm was contracted to provide communications and media advice to the Commerce Commission, and billed for over $300,000 between July 2020 and September 2022. This included about $100,000 for work on the Commission’s probe into competition in the supermarket sector.

The arrangement has been condemned from across the political spectrum. Writer and analyst Max Rashbrooke is quoted by Espiner explaining why this is a problem: “If you've got a lobbying firm – whose job it is to get government decisions changed in favour of its clients – embedded right in the heart of government, then I think that's totally inappropriate.”

Similarly, the Taxpayers’ Union has called for an investigation, saying “the Commission has effectively allowed a lobbying firm to infiltrate and potentially manipulate regulatory processes. This is a blatant conflict of interest, undermining the Commission’s role as an unbiased regulator and betraying public trust.”

Other government work done by SenateSHJ

SenateSHJ is one of the largest firms involved in lobbying and public relations in New Zealand. Founded in 2002 it has offices in Auckland, Wellington, Melbourne and Sydney, and claims to be the “number one independent communications consultancy in Australasia” and the only New Zealand firm “ranked in the global top 250.”

The firm has worked on a number of Government reforms in recent years.

Last year the Herald’s Kate MacNamara detailed how in the 20 months to the end of February 2022, SenateSHJ was a recipient of Three Waters reform programme funding, billing $616,281 for advice on selling the reforms to the public. SenateSHJ’s reputational specialist Raphael Hilbron was brought into a Three Waters “critical friends” group to advise how to make Three Waters popular. MacNamara also reported in 2021 that between 2020 and August 2021, SenateSHJ was paid $245,000 for advice on health restructuring.

In 2022 Business journalist Dileepa Fonseka also reported the lobbying-PR firm had a contract with the Ministry of Justice for which they were “paid $128,000 a year just to upload court decisions to a government website.”

The “Revolving door” of SenateSHJ staff into politics

The PR-lobbying firm has even had a presence in the Beehive. In 2019 Jacinda Ardern hired founding SenateSHJ partner Tracey Bridges to work in the Prime Minister’s Office. Bridges’ role became controversial when she appeared on RNZ’s The Panel to talk about government policies, but only disclosed her employment with the lobbying firm and not her Beehive job. Defending the omission, Bridges explained her work for Ardern was only one of her many clients.

Perhaps the most high-profile lobbyist at SenateSHJ is partner Margaret Kiri Joiner – particularly because she appears as a political commentator on Newshub The Nation.

Sarah Maguire (nee Austen-Smith), is another former SenateSHJ lobbyist who writes political commentary. Maguire went from a government relations role at SenateSHJ, to the Public Service Association, then to work for the PM’s Office as “Director of Communications”, and more recently set up her own PR firm, Heft Communications.

Former managing partner John Harbord is now Chair of the Major Electricity Users' Group and the Executive Director of the New Zealand Shipping Federation. Harbord was also brought into Government in 2021 for three months as Engagement Manager of the Department of Prime Minister and Cabinet’s Covid-19 Group. In this, he says he “played a leading role in stakeholder engagement to support the rollout of the national vaccination programme.”

Harbord worked at SenateSHJ from 2015 to 2020, after five years as Chief Crown Negotiator for the Office of Treaty Settlements, having previously been a political adviser and researcher for the National Party at Parliament and the Beehive, 2006 to 2013. During this time he worked closely with Chris Finlayson and then Prime Minister John Key. In his pitch to clients, Harbord says of his time in the Beehive: “I was privy to the highest-level decision-making. I have a clear understanding of ministerial priorities, policy, and the inner workings of government and parliamentary business and processes.”

David Cormack is another well-known former SenateSHJ consultant. He set up Draper Cormack Group in 2016, and came under scrutiny earlier this year in Guyon Espiner’s RNZ series on lobbying which looked at his role at government agency, Pharmac.

Other SenateSHJ staff have shifted through the revolving door, becoming ministerial staffers. For example, former SenateSHJ consultant Jack Loader is currently the Press Secretary to outgoing Housing Minister Megan Woods.

Fixing the lobbying-govt problem

There needs to be further investigation into government agencies contracting firms that are involved in lobbying. The Commerce Commission has defended itself by saying that SenateSHJ was only providing non-lobbying services such as communications or strategic advice. But even if this is the case, it doesn’t protect against potential conflicts of interest. And while the Commerce Commission claims those conflicts of interest are robustly managed, there is no evidence of this, as the details have been kept secret.

What is now needed is a full account of which lobbying firms have been given contracts by government agencies. The Ministry of Justice currently has a team of policy analysts researching how corporate lobbying might be better regulated. They will report back to the Government next year on the New Zealand lobbying landscape and what reforms could improve public confidence in this aspect of the political process. The Ministry of Justice needs to include work on government agencies employing firms that are engaged in lobbying.

There also needs to be further scrutiny of the interactions between these lobbying firms and Government Ministers. It is positive that the Ardern Labour Government initiated the publishing of ministerial diaries.

In terms of SenateSHJ, these show there have been 11 official ministerial engagements during the Ardern-Hipkins years, involving meetings and functions. The ministers engaging with the lobbying firm included Grant Robertson, Andrew Little, David Parker, Damien O'Connor, James Shaw, Megan Woods, Michael Wood, Priyanca Radhakrishnan, and Ron Mark. There is very little information about these meetings.

The lobbying-PR firms need to be much more open to public scrutiny and accountability. So far SenateSHJ is refusing to respond to the allegations of conflicts of interest, simply telling Guyon Espiner, “we don't discuss client work”.

Is this good enough? Perhaps it’s time for any lobbying-PR company that is awarded government contracts to be required to publicly declare its business clients. For the sake of accountability and to guard against corruption, such transparency is more necessary than ever.

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Dr Bryce Edwards is the Political Analyst in Residence at Victoria University of Wellington. He is the director of the Democracy Project.

This article can be republished for free under a Creative Commons copyright-free license. Attributions should include a link to the Democracy Project (https://democracyproject.nz)