Wednesday, March 29, 2023

Bryce Edwards: Nash’s sacking means a deeper probe into Cabinet “insider trading” is required

Cabinet Minister Stuart Nash was sacked last night for violating Cabinet Collective Responsibility rules, when it was revealed he disclosed sensitive Government information to business supporters who had donated money to him. The breach of the Cabinet Manual was enough to land him in trouble, but the fact that it involved leaking information to his financial backers is what makes this a truly significant scandal.

A 2020 email from Nash to two of his financial backers was leaked to the media yesterday. It detailed Cabinet decision-making on an issue relating to Nash’s business donors’ property interests – rent relief for Covid-hit businesses. Nash’s email to Wellington businessmen Troy Bowker and Greg Loveridge revealed positions ministers had taken on the matter, and stated he disagreed with the decision they reached.

For many New Zealanders this will look corrupt and will reduce public confidence in the integrity of the political process. In this situation, Nash took $25,000 from two property developers in the 2017 and 2020 elections. The politician then provided those commercial property investors with privileged information about decisions and debates inside Cabinet on an issue pertaining to their interests.

Voters might also be forgiven for suspecting this is a common occurrence. After all, what else do business donors get from helping Cabinet Ministers and other politicians? In the New Zealand political system, it’s never been clear. We are often told by politicians and business donors that there are “no strings attached”. That has always stretched credibility.

An Independent inquiry into Cabinet-Donor relations is required

An independent investigation is now required about Nash’s dealings with his various business donors while he has been a minister of the Crown. There is now reason to question whether this sort of behaviour has occurred at other times in Nash’s political career. He certainly has a colourful and questionable history of political fundraising.

The question might also apply to others in government, as donations in New Zealand politics are incredibly murky. We simply don’t know what impact they have on the public policy process, except when the occasional whistle-blower allows the media and public some access to what is going on behind the scenes between wealthy individuals and decision-makers.

As Stuff political editor Luke Malpass says today, the donations aspect means “what had a bit of a whiff, became a stench.” He says the pressure on Hipkins to launch a probe into the matter will be significant, as there are too many unanswered questions about the donor-Cabinet relationship – such as: “Who else has he given sensitive information to? Has some of that inadvertently been used to make someone money somewhere?”

There will be a suspicion that Nash’s business donors were lobbying in their own financial interest, and that the politician was essentially involved in “insider trading”. The Leader of the Opposition has even labelled it as such, and called for Nash to resign from Parliament, stating that “integrity really matters”.

Luxon went on TV this morning to explain: “We haven’t actually seen something like this before in New Zealand … You’ve got a Cabinet minister, were confidential information is being discussed in Cabinet, who then is leaking and sharing that information with his donors. That is an incredibly serious and egregious issue… And how can he not be sure that other information hasn’t leaked with respect to [his] economic development or forestry or fisheries portfolios?”

Prime Minister Chris Hipkins says that Nash’s sacking ends the issue for him. But political journalists are questioning this, and applying pressure for a proper inquiry. New Zealand Herald political editor Claire Trevett has disagreed with Hipkins’ suggestion that the issue is at an end, saying “it should be his job to make sure such a probe is done. Nobody should be getting inside information on decisions Cabinet has or is about to make – especially those with financial consequences. And the public also needs to be assured that ministers aren’t lobbying for their mates or donors around the Cabinet table.”

Likewise, Newsroom political editor Jo Moir writes today that “the sacking doesn’t erase those perceptions of influence, and it is unclear how many other instances of similar behaviour there may have been in the five years Nash had been a minister.” Moir therefore argues “It’s highly likely some sort of wider investigation will need to be conducted to ensure there haven’t been any other situations where confidential Cabinet information has been leaked and used for personal gain.”

Broadcaster Duncan Garner also thinks a thorough inquiry is now needed, because “We like to think corruption is not here but we are dreaming to say it’s not. What Nash did amounts to a form of corruption.”

Garner suggests that either the Auditor General or the Police might undertake the inquiry: “Every piece of work and all the appointments he made as a Minister must now be scrutinised by an independent inquiry, perhaps overseen by the Auditor-General so as to give the PM and public confidence there is nothing more to this. Only an independent inquiry can do this and if it has to go to the NZ police so be it.”

Donations to Nash point to a potential future with NZ First

The business donors who have backed Stuart Nash are also major contributors to the New Zealand First party. Wellington property investor Troy Bowker, who gave Nash $15,000 for his 2017 and 2020 election campaigns also donated to Winston Peters’ party. According to Richard Harman’s account today, “In 2019 he gave them $24,150; in 2020, $29500, to which his company, Caniwi Management, added another $29,500 and in 2021, $30,000.”

Nash also received donations of $5000 in 2017 and 2020 from businesses involving Greg Loveridge, who was the other recipient of Nash’s Cabinet information. And the businesses donating to Nash also gave NZ First $45,000 in 2020.

According to Harman, “That intersecting web of financial connections between Nash and NZ First and his known friendship with both Peters and Shane Jones raises questions about whether he might leave Labour for NZ First.”

Harman also reported Peters defending Nash last night, saying “The only mistake he made was to share his thoughts, and sometimes in a transparent democracy, we should be allowed to do that”. And so, Harman argues that with Nash’s time with the Labour Party now over, the politician’s “only possible lifeline would be NZ First.”

Clearly Nash has a close connection with New Zealand First, and they both increasingly appear to be ideologically in sync. And today, Claire Trevett says that Nash will have to decide whether “he can resurrect a political career with another party”.

Such a hop to another party would be a big deal, and it’s not clear that this is in Nash’s nature. An announcement of retirement seems more likely. Of course, Nash could leave Parliament soon, without causing a byelection, and because of New Zealand’s complete lack of regulation he could take his skills and connections and walk straight into a career lobbying the ministers he was sitting around a table with yesterday.

Dr Bryce Edwards is a politics lecturer at Victoria University and director of Critical Politics, a project focused on researching New Zealand politics and society. This article was first published HERE

1 comment:

Robert Arthur said...

if I was about to be held largely accountable for the forestry slash disaster I would certainly take pains to facilitate my exit.