Tuesday, March 10, 2015

Stephen Franks: Business lying bad – Official lying OK


According to the Wellington  Regional Council Mayor, not being allowed to lie in official advertising “could drastically restrict how local bodies operate”. She believes that having to live up to the standards expected of business “poses a real risk to robust political debate”. 

Putting aside the inconvenient fact that Council advertising should be informative, not political propaganda, it is incredible that there is no media furore over her further defence that seeking the Advertising Standards Authority ruling was “legal nitpicking”.


The DomPost has reported the matter under the heading “Advertising Standards Authority calls GWRC super-city ad ‘misleading’”. Note the implied warnings to ignore – “calls’ instead of “finds” and the word ‘misleading’ in quotes to distance the DomPost from the dreadfully unwelcome judgmentalism implicit in ‘misleading’.

Take a look at the ASA report, ( 15/004) which attaches my firm’s letter setting out the facts. Someone in the GWRC was either too stupid or too reckless to merit staying employed, or set out to deceive. See also the submission on behalf of the GWRC which says essentially that councils should be free from ASA supervision of their advertising, because being constrained to the truth would be problematic.

How do the honest members of the Council feel about this? Will they seek an inquiry into it. Will anyone be held accountable?

Businesses, remember that indifference to honesty, when you next want to shade the truth to GWRC. Its leader thinks that “misleading advertising” which was “not prepared with a due sense of social responsibility” is just robust debate.

In 2008 I blogged on journalistic blind eyes to lies by politicians, compared to their frothing pursuit of easily made mistaken business claims.

“As a commercial lawyer I’m sickened by the left’s sanctimony toward business. Labour love passing laws they could never satisfy in their own conduct. They lie happily, yet business people (properly) face prison or huge fines for faulty prospectus statements.”

I’ve had some journalists and politicians claim that it is because business can lose people so much money. We saw that claim in full lynch mob glory in the media’s repeated whipping of two former Ministers of Justice. They were found by a court to have been honest though mistaken. They’d failed to add enough emphasis to their written warnings of the risks facing Lombard Finance.

The company’s failure (like most mezzanine development finance lenders) had nothing to do with the misleadingly mild warnings. Many commentators wanted them in jail for years, nonetheless.

But in matters like the proposed amalgamation of a region to put it under provincial government the amounts at stake are enormous. If Wellington ratepayers end up funding the executive pay increases and rate increases experienced in Auckland the per household costs will dwarf anything a Fair Trading Act prosecution for misleading statements would usually deal with.

Why the double standard? Why are GWRC councillors not facing calls that they go before the courts and risk imprisonment for false statements, the way company directors do? The GWRC statements too may have been errors of judgment, not dishonesty. But that did not save the Lombard directors from criminal conviction .

Councillors are not at risk because there will be no media call for equal treatment morality.
As an MP I ran into it constantly – deep suspicion from politicians and journalists that business people are inveterate liars. Few of the former had the faintest idea how much everyday business effort goes into protecting a reputation for being honest. Standard due diligence for published statements was inconceivable. I found it impossible to shift their pre-conceptions. They simply applied to everyone their own absence of morality – they lie freely if they think they can get away with it, so to them everyone else will be worse.

But what about the days of boredom we’ve endured as the Gallery pursued John Key over when he knew something, compared with when he said he knew it? Surely that shows they still think lying matters?

It does – but just for their enemies. To them lying is OK when it is for their causes, and by people they want to win. It remains wrong, but only worth beating up for the mugs who don’t lie when it is suspected in their opponents.

Thank God we now have specialist and social media to bypass mainstream political journalists and their editors.

Stephen Franks is a principal of Wellington law firm Franks & Ogilvie and a former MP. He blogs at www.stephenfranks.co.nz.

2 comments:

paul scott said...

Stephen, and others. I wonder if Rodney ever wakes up at 3am in the morning, thinking "God in heaven what did I do?' Probably not.
Down here in Christchurch we used to say. "Forget about Ecan, Regional leave them alone ... start this business by killing off the Christchurch City Council,its been rotten since the Wizard was still at school'

Ancient Dan said...

Your remarks on the blindness of the media ring true. The media schools at tertiary level convince them of the conflict model of society - a well disguised pseudo Marxism.
They see the public sector through those rosy spectacles and condemn almost automatically the private sector that produces almost every artifact the need to live.
Noble cause then comes into place. Good you are calling them out