Thursday, July 21, 2011

Behaving like bankers

Last month, when we learned that Westpac, the government's bankers, was routinely bribing government Ministers with lavish hospitality, I highlighted the extraordinarily strict conditions which applied to public servants in this area. Senior public servants are simply not allowed to accept corporate hospitality, precisely because it creates a perception of corruption and conflict of interest. Some of the rules:

  • Gifts should be declined unless they are of nominal value, are consistent with guidelines applying to the State Services generally, or their acceptance is covered by departmental or other relevant policies.
  • The timing and frequency of gifts are relevant. Even a small gift or benefit may be of concern, if offered repeatedly.
  • The commercial influence, actual or perceived, that a gift or benefit may represent is important. For example, where a supplier has won a contract for the provision of goods and services to a department, personal discounts must not be accepted from the supplier as they could be seen as a reward for letting the contract and an inducement to maintain the commercial relationship.
  • Hospitality offered to chief executives may provide opportunities to develop relationships, but a chief executive's presence at such occasions is potentially open to criticism. The context must be taken into account: for instance, how relevant is the event or function to the department's role; will the department's interests genuinely be advanced by having a senior-level presence; should the department or the individual chief executive be meeting the costs to attend?
And of course the code of conduct for the State Services requires all public servants to be trustworthy and "decline gifts or benefits that place us under any obligation or perceived influence".

It seems that the New Zealand Debt-Management Office - a subsidiary of the Treasury which manages our overseas debt - has been ignoring those rules:

Treasury last night released to Fairfax, for the first time, its register of gifts, benefits and hospitality.

The register revealed staff at the Debt Management Office have taken hundreds of freebies from banks like Barclays, Westpac, BNZ and ANZ.

In a typical example, portfolio managers for the Debt Management Office Matthew Collin and Briar Ferguson received tickets to the Toast Martinborough event from ANZ.

Other freebies included tickets to the Rugby Sevens, rugby league, golf games, and concert tickets.

Both Ferguson and the head of the Debt Management Office Phil Combes accepted tickets to a pantomime from the BNZ on December 9 last year.

This is a gross violation of public service ethics and of the Code of Conduct, which calls the integrity of the DMO into question. Our public servants are not supposed to behave like bankers. It is absolutely unacceptable. There need to be heads on spikes over this.

But the rot isn't limited to DMO. There's a clear lack of oversight, both from Treasury and SSC, and their responsible Ministers, to allow this corruption to become so widespread. And they all need to be held accountable for it.