The not-very-serious foreign interference inquiry

At midnight on Friday the deadline passed for public submissions to the Justice Committee’s inquiry into (various issues around) foreign interference in our political system.

The Justice Committee conducts a review after each election of issues around the conduct of the election.   After the opportunity for public submissions to this review had already passed the government asked the committee to add the “foreign interference” issue to its inquiry.

The Justice Committee is chaired by senior Labour backbencher, Raymond Huo.  Professor Anne-Marie Brady, and various other people, have highlighted the fairly close connections Raymond Huo appears to have had to the PRC Embassy in New Zealand, to various regime-affiliated United Front bodies, is on record having talked up the opportunity Parliament gave him to champion PRC perspectives (eg on Tibet), and has never once in his years in Parliament been heard to utter a word critical of the PRC regime –  even though, as an adult migrant, he will be more personally familiar than most with its ways.   It has always been pretty extraordinary that such a person chairs such a significant parliamentary committee, let alone was chairing an inquiry into potential foreign interference risks in the New Zealand political system.   Revealing as to the enfeebled state of the New Zealand political system, the parliamentary Opposition had never expressed any public concerns.

Huo has now, very belatedly, recused himself from the committee for the foreign interference aspects of the election inquiry.  But that recusal came only after the blowback from his (initially successful, initially backed by the Prime Minister’s office) efforts to corral the votes of his Labour colleagues to block Professor Anne-Marie Brady from making a submission on the foreign interference issues.    Huo assured us that officials could tell the committee all that was necessary.  To their credit, National MPs on the committee went public and the government backed down, and presumably forced Huo to stand aside from some aspects of the inquiry.

Eventually, there was a call for public submissions.  It ran as follows

The Justice Committee has resolved to invite further submissions on its Inquiry into the 2017 General Election and 2016 Local Elections. The committee is inviting submissions on the specific issue of how New Zealand can protect its democracy from inappropriate foreign interference, notably on the issues of:

  • the ability of foreign powers to hack the private emails of candidates or parties
  • the risk that political campaigns based through social media can be made to appear as though they are domestic but are in fact created or driven by external entities
  • the risk that donations to political parties are made by foreign governments or entities.

As I noted a few weeks ago, those specifics seemed deliberately designed to avoid the elephant in the room around the People’s Republic of China.  Combine that the competitive obsequiousness towards, and deference to, the PRC from all our political parties (but notably National and Labour who had all the seats on the Justice Committee), and the lack of an independent stance from any individual MP on such issues, I was not at all optimistic that the inquiry was a serious exercise.  When someone suggested I might make a submission I was initially reluctant –  participating in what was probably a charade only lent dignity to a dishonourable project.

But in the end I decided to make a fairly short submission, as a concerned citizen, but also one with some expertise on issues around the (alleged) economic dependence of New Zealand on the PRC.  I did not set out to be diplomatic.  The biggest issue facing New Zealand in this area isn’t inadequate laws, but the consciously-chosen actions, words, attitudes and values of our MPs and political parties.   The inquiry is framed to make MPs look like the solution, when in fact they (and their party machines) are the problem.

I suggested a number of specific legislative amendments.  From my summary

There are some specific legislative initiatives that would be desirable to help (at the margin) safeguard the integrity of our political system:

• All donations of cash or materials to parties or campaigns, whether central or local, should be disclosed in near real-time (within a couple of days of the donation),

• Only natural persons should be able to donate to election campaigns or parties,

• The only people able to donate should be those eligible to be on the relevant electoral roll,

• Consideration should be given to tightening up eligibility to vote in general elections, restricting the franchise solely to New Zealand citizens.

I would also favour tight restrictions on the ability of former politicians to take positions (paid or otherwise) in entities sponsored or controlled, in form or in substance, by foreign governments.

But

…useful as such changes might be, they would be of second or third order importance in dealing with the biggest “foreign interference” issue New Zealand currently faces – the subservience and deference to the interests and preferences of the People’s Republic of China, a regime whose values, interests, and practices and inimical to most New Zealanders. Legislation can’t fix that problem, which is one of attitudes, cast of minds, and priorities among members of Parliament and political parties. Unless you – members of Parliament and your party officials – choose to change, legislative reform is likely to be little more than a distraction, designed to suggest to the public that the issue is being taken seriously, while the elephant in the room is simply ignored. It is your choice.

In the body of the submission I developed the point

…in respect of the People’s Republic of China – a regime whose values, actions, and interests are inimical to those of almost all New Zealanders – these are not just risks, but realised facts. Whether because of false narratives about New Zealand’s “economic dependence” on China, lobbying from specific vested interests (public and private sector, or political party fundraisers), or whatever other consideration, political parties and elected politicians have allowed themselves to arrive in a position where all seemed scared to utter a word critical of the regime in Beijing, and appear to go out of their way to laud the regime and/or to solicit donations from people with close ongoing ties to Beijing. That brings our democratic system into disrepute, undermining the confidence of citizens that the political process is operating in their collective interests, and that those running it have interests and/or values that align well with the values and longer-term interests (including of a robust open political system) that aligns with those of the citizenry.

This isn’t primarily about inappropriate foreign interference itself but about the repeated choices of, it appears, every single member of Parliament, across successive Parliaments, and each of the parties represented in Parliament. Big and evil foreign regimes will attempt to exert pressure where they can, or to identify points of vulnerability. We can’t change that, and we can’t change the character of the Chinese Communist Party controlled People’s Republic of China. But we have choices as to how to react to the regime. The choices made by successive governments, apparently without material dissent from anyone in Parliament, have worked against the longer-term interests of New Zealanders.

and

No doubt most of those involved believe that, at some level, they are serving some version of “New Zealand interests”, but in the process there is no doubt that Beijing’s interests are advanced. What are those interests? Well, they include (without limitation) keeping western nations hitherto known for their regard for political freedom, the rule of law, and human rights, quiescent. When (otherwise) decent countries treat the PRC – a country with few real friends and allies – as normal and decent that (in some small way) helps the regime.

New Zealand governments were once known for a fairly forthright stance in responding to large and evil regimes: the first Labour government was well-known for its opposition to appeasement policies in the 1930s, and successive governments (of both parties) recognised the Soviet Union for what it was. But no longer.

The People’s Republic of China is at least as evil a regime – expansionist abroad, increasingly repressive at home, attempting to coerce diasporas (including in New Zealand) abroad, often with not-very-veiled threats to people at home. And yet our governments and members of Parliament treat the leaders and representatives of this regime as part of some sort of normal state, unashamed to share platforms with them and (apparently) afraid ever to utter any word of criticism. Citizens of a close ally have been abducted by Beijing in recent months, and the New Zealand government utters not a word of support. A free and democratic country in east Asia is constantly threatened and harassed by Beijing, and New Zealand governments say nothing. What message does this send to New Zealanders about whose interests governments are serving, and values they represent? By contrast, party presidents of both main political parties have been in Beijing in the 18 months praising the PRC regime and its leader – and they don’t even have the excuse perhaps open to ministers of maintaining normal diplomatic relations.

No one supposes that our elected MPs or political parties [collectively, or generally as individuals] share the values, or even support the methods, of the People’s Republic of China. And the People’s Republic of China poses no direct physical threat to New Zealand. Thus, the only reasonable deduction is that the deference and subservience, to a regime responsible for so much evil, is about deals and donations: direct two-way trade opportunities, and the flow of political party donations from people (often New Zealand citizens) with affinities to Beijing.

What about those economic risks?

The People’s Republic of China is known to attempt to use “economic coercion” to bend other countries and their politicians to its way (sometimes – as with Norway – just keeping quiet about evil). From an economywide perspective, these are mostly not serious or real threats – more like bogeymen that people in other countries choose to scare themselves with, sometimes egged on by political leaders. A key insight of the economic growth and development literature is that the countries make their own prosperity (not by closing themselves off to the world, but through good institutions, smart people, decent tax and regulatory provisions, which allow them to develop industries than can take on the world). But the threats – usually unspoken, but real nonetheless – are real for individual firms  (including public sector ones like universities) that have made themselves very dependent on the PRC market.

Wise businesses don’t make themselves excessively dependent on markets controlled by capricious brutes, and when they find themselves over-exposed they look to diversify and/or build greater resilience into their own processes. But too many New Zealand exporters – well aware of the character of the regime – have only redoubled their exposures, and then seek to influence the New Zealand state to protect their dealings in those markets. Perhaps among the more shameful are the universities, historically guardians of open debate etc, and yet several now actively partner with arms of the PRC and all have chosen to make themselves dependent on PRC students – in the process handing the thug a baseball bat. Not one university vice-chancellor has been heard from in recent years lamenting the increasingly closed and repressive nature of the regime in Beijing.

There are parallels with people who pay protection money to the Mafia. Such people might garner some sympathy but little respect. But whereas an individual may have few protections against organised crime syndicates, a sovereign state positioned as New Zealand is, has plenty of choices. A generation of politicians has made bad choices around the PRC. Those choices may have boosted two-way trade to some extent (even as our overall economic performance – more influenced by our overall foreign trade, which has been shrinking as a share of GDP – has remained poor), but have also compromised our longer-term interests, values, and the sense of decency and self-respect that most New Zealanders pride themselves on. New Zealanders can have little confidence that the political system is operating for them.

Following some discussion of my specific recommendations (above), I came back to the point

But it would simply be wilful pretence to suggest that they are the main game around foreign interference. As members will be well aware, the United States (for example) has very tight laws on foreign donations (much more so than New Zealand’s) which has not avoided allegations of interference/collusion or whatever roiling the political system for the last few years.

In a New Zealand context, it is generally recognised that many of the problematic donation flows are made by New Zealand citizens. The controversy last year around Auckland businessman Yikun Zhang was once such possible example, but the point generalises and is well-recognised by those close to the major political parties. In the PRC case, in particular, parties have actively sought to tap donations from ethnic Chinese citizens, often people with close associations with, or sympathies for, the regime in Beijing. No law is going to stop most such people donating, but decent political parties would choose not to tap (knowingly) such morally questionable sources of funding. All parties will be well aware of the activities of the regime, and its agents, in attempting to coerce, or incentivise, ethnic Chinese living here who have ongoing business or family connections in China.

But again, the issue isn’t just about PRC-born New Zealand citizen donors. There are not a few domestic entities with a strong interest in the New Zealand government deferring to Beijing whenever possible, and avoiding if at all possible ever upsetting the regime in Beijing. Many of them are people who readily get the ear of ministers or senior officials. Indeed, the government is in league with many of these same people/institutions in promoting and funding the New Zealand China Council, a body that uses taxpayers’ money to attempt to propagandise the relationship the government itself and specific businesses have with the party-State in Beijing.
For the country as a whole this is not some sort of “win-win” situation (in a way that free trade between consenting firms generally is). Rather, to some extent at least (and perhaps less so in substance than in belief), the access of New Zealand firms (a minority of New Zealanders’ financial interests) is held to depend on New Zealand governments and MPs doing as little as humanly possible to upset one of the most heinous regimes on the planet. Those firms then become, in effect, champions locally of the interests and values of Beijing and – to the extent that politicians respond to such pressures (as they seem to, enthusiastically or otherwise) – they themselves become complicit. Since MPs represent the public, we are all tarred to some extent or other by that association. That, in turn, discredits our political system, which comes to seem no longer interested in championing or representing the values that shaped and formed our nation and our political system.

Quite possibly almost all those involved in the New Zealand political system believe they are primarily serving the interests of New Zealand. But until the major parties (in particular) and the governments they form begin to make observable choices in ways that prioritise New Zealand interests and values over those of Beijing, there is a certain observational equivalence between claiming to focus on New Zealand interests and actually serving Beijing’s. That inability to tell the two apart corrodes any confidence in our political system, and any respect for our politicians and parties. The political spat earlier this year, around which party was most willing to defer to Beijing, will only have reinforced public doubts.

Ending on this note.

That cannot be a desirable state of affairs. Modest legislative reforms around foreign donations do not go to the heart of the problem and, welcome as they might be, will not represent any material part in a fix. A real fix requires MPs and parties to start consistently choosing and acting differently; choosing to prioritise the longer-term values and interests of New Zealanders.

It will be interesting to see how many others, and who, have chosen to submit.

I continue to have very low expectations on this inquiry.  The Prime Minister and Leader of the Opposition demonstrate no interest in the issue (except perhaps to pretend there isn’t an issue), and other party leaders and MPs are no better (it appears).   The acting committee chair (for this part of the inquiry) is not one of those MPs one would look to for leadership, and the media have –  thus far –  shown little sustained interest in the inquiry (except when gifted stories –  eg around Huo blocking Brady, and the recent appearance of the GCSB/SIS), with no even any apparent follow-up to the reported claims of Jami-Lee Ross (how did he get on the committee?) at the last public hearing.

But no doubt, after the previous Labour attempts to block her, when Professor Brady is invited to appear before the committee there will be considerable interest, including in how MPs on both sides of the committee attempt to parry, or downplay, the concerns she has been raising (let alone the apparent attempts to intimidate her and her family, that –  again –  excited so little interest or outrage from the Prime Minister or the Leader of the Opposition.)

UPDATE (Tuesday): This Newsroom article has some useful material, including about how Jami-Lee Ross came to be on the committee for a day, and suggestions that Huo still has not properly recused himself.

10 thoughts on “The not-very-serious foreign interference inquiry

  1. An excellent submission Michael. Restricting the right to vote and make political party donations to New Zealand citizens only would be a useful step in reducing interference. Legislation can only take us so far however. Ultimately we depend on the morality of our politicians. They are well aware of where the money is coming from, whatever the front organization may be.

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  2. I can’t blame the Communist Govt of China for trying.

    In 1626 a letter written by Dutch merchant Peter Schaghen to directors of the Dutch East India Company stated that Manhattan was purchased for the value of 60 guilders in goods, an amount worth approximately $1,050 in 2015 dollars. Who should be blamed buyer or seller? If NZ had the opportunity to purchase Shanghai for $1,050 then we would be right to take it.

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  3. Hi Michael. I am a relatively new-comer to your blog, and to this issue.

    Do you have any idea of the figures involved here? Total incomes on a party-by-party basis, and then the external contributions on the same basis?

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  4. The short answer is no. Total donations to each party will be in the disclosures they have to make to the Electoral Commission, but one of the issues for NZ is that much of the total is anonymous (through various channels, mostly probably legal), and even if every donation had a name attached it would take a lot of work to get fairly precise numbers.

    There are well-known specific examples – eg the $150000 “donation” from a mainland Chinese bidder to Phil Goff’s mayoral campaign, or the large (disclosed) donation to National from a company called Inner Mongolian Horse, which is a NZ registered company but which is owned by a PRC billionaire – but hard data is pretty scarce. However, for example, the narrative that has Jian Yang being one of National’s largest fundraisers has not (that I’ve heard) been disputed. The National Party appears to have been more aggressive and successful in tapping this market than Labour, but now that Labour is back in government we might expect some change in that balance.

    In a post last year https://croakingcassandra.com/2018/06/27/foreign-influence-and-the-wellington-establishment/ about a Chatham House rules event, attended by various well-connected Wellington figures, I recorded this
    “There was clear unease, from people in a good position to know, about the role of large donations to political parties from ethnic minority populations – often from cultures without the political tradition here (in theory, if not always observed in practice in recent decades) that donations are not about purchasing influence. One person observed that we had very much the same issues Australia was grappling with (although our formal laws are tighter than the Australian ones). Of ethnic Chinese donations in particular, the description “truckloads” was used, with a sense that the situation is almost “inherently unhealthy”. With membership numbers in political parties dropping, and political campaigning getting no less expensive, this ethnic contribution (and associated influence seeking) issue led several participants to note that they had come round to favouring serious consideration of state funding of political parties. I remain sceptical of that approach – especially the risk of locking in the position of the established parties, or locking out parties the establishment doesn’t like – but it was sobering to hear.”

    It is also hard to know to what extent policy and official stances is shaped by the donations side of my “deals and donations line”, but I suspect it is secondary – it is the false narratives about econ dependence etc (stuff that feels like national interest rather than private interests. The dominance of the trade/econ dependency arguments would account for why Labour is just as deferential to the PRC as National. For National, donations probably matter quite a bit at the margin, while for Labour the visceral anti-Americanism may also be part of the story (‘we aren’t US lapdogs”).

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  5. “The inquiry is framed to make MPs look like the solution, when in fact they (and their party machines) are the problem.”

    A very good point Michael. Why is the Justice committee running this inquiry anyway? Shouldn’t it be done by the Electoral Commission or even a special investigator? MP’s are too close to action to be seen as impartial, especially Mr Huo.

    As grubby as the political donations are, I am more concerned about selection of party list candidates and making sure no foreign power or their local embassy is influencing the selection of those party candidates. This is were we have the potential for a foreign agent to get fast tracked into parliament with minimum public scrutiny as they avoid the rough and tumble and scrutiny of the electoral seat elections. Maybe it’s a time to re-look at the rules regarding list candidate selection.

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