Thursday, August 30, 2018

Steve Maharey's crony appointment

The previous government was notorious for cronyism, running fake appointment processes for form's sake before shoehorning their preferred cronies in at the last minute. That was pretty blatantly corrupt, but in less than a year the new government has managed to surpass them, with the appointment of former Labour MP Steve Maharey as chair of Pharmac. When Maharey was appointed, I submitted the usual OIA request seeking details on the process. The released documents show cronyism so naked that I have not seen it before in New Zealand.

How bad is it? First, Health Minister David Clark received advice to reappoint the existing board chair Stuart McLauchlan to manage Pharmac through upcoming changes, or at least temporarily reappoint him so a proper process to find a replacement could be run:

This advice was ignored. Which would be fine if Clark had then run a proper appointment process to appoint someone on merit. Instead, he simply shoulder-tapped Maharey, on the basis of "skills and experience which are well known to the Minister of Health".

No position description, no application, no interviews, nothing. Just $48,000 a year for knowing the right person. Its cronyism, pure and simple. Then, in the Cabinet paper formalising the appointment, Clark has the gall to say this:

The SSC Board Appointment and Induction Guidelines require that a position description is completed and strongly suggest that a wide pool of candidates be sought by a variety of methods (including advertisement, nominations from state-sector agencies etc) in order to get the broadest possible pool of high-talent candidates. They also assume that candidates will be short-listed, interviewed, and generally assessed on merit. Whether Clark actually did that, or misled his Cabinet colleagues, is left as an exercise for the reader.

What is clear is that this process undermines the concept of merit-based appointments in the public sector. The way to get a job under Labour is not to be good at it, but to be buddies with the Minister. This is not how our government is meant to work. But it also diminishes Maharey, in that he's not obviously unsuitable for the role, and if he'd been appointed by the previous government or by an independent, transparent and merit-based process, no questions would have been asked. Instead, the method of his appointment taints him, and he'll forever show up on Google as a crony. Those seeking government appointments might want to think about that.

As for how to fix this, I've said it before: if we want to eliminate cronyism, we must remove the power of Ministers to dispense patronage in this manner. We already do that for state sector chief executive positions by using an independent panel and we should do it for boards as well. As with CEOs, if Ministers want to override the recommendation they have received, then they should be required to publicly notify that fact - a mechanism which ensures that it hardly ever happens. If we do this, our public sector would be better for it, and appointments would be free of the taint of cronyism or the suspicion they had been purchased through donations.