A last post on Makhlouf

One final post before the waters close over the issue.

When I wrote my post on Thursday afternoon about the SSC report on Gabs Makhlouf’s conduct in the “Budget leak” affair, Makhlouf himself had still made no comment.  By then, he had made no comment at all for four weeks, since the press release put out –  hand in hand with one from SSC – at 5am on Budget day.  Among other scrutiny he had avoided, he’d deliberately stayed away from a select committee hearing he would normally have attended, thus denying MPs any last chance to question his conduct.

But later on Thursday afternoon, Makhlouf issued a short statement  (4:41pm being about as close to close of business as he could possibly get).   In the circumstances, it is worth quoting in full.

“Mr Ombler’s investigation was conducted thoroughly and fairly. I have read the report carefully and encourage others to do so. I apologise that Budget information was not kept secure. The inquiry that I asked the SSC Commissioner to undertake will help us understand exactly how that happened and how to stop it happening again.

The report confirms I acted at all times in good faith and with political neutrality. It also confirms that I acted reasonably, other than in my descriptions of the incident. I am pleased that my honesty and integrity are not in question.

It has been my privilege to have had the opportunity to serve New Zealanders and I’m very proud of what my Treasury team has achieved over the last 8 years.”

He’d probably have been better off to have said nothing, and left us wondering. We already knew from the SSC report that Makhlouf disputed all the report’s adverse findings, and showed no sign of any contrition, or even of a sense that with the benefit of hindsight he should have done things differently.  But, perhaps, (we might have wondered) in his heart of hearts he really knew things hadn’t been handled well.

What does Makhlouf’s statement actually say?

The first paragraph is, in context, mostly an exercise in distraction. He apologised that the Budget information itself hasn’t been kept secure but (a) he had more or less taken institutional responsibility for that a month ago, and (b) that wasn’t the subject of the SSC inquity that had been released earlier on Thursday.  That report was about Makhlouf’s own conduct after the premature access to Budget information came to light.  It was a pretty damning report, especially when read in full (which I join him in encouraging people to do), and read knowing it was written by and for people who had worked closely with Makhlouf, including at the height of the “Budget leak” affair  (the timeline in the report has Peter Hughes in two meetings with Makhlouf, Ombler in one, and there was sufficient coordination and discussion that Treasury and SSC were issuing simultaneous press statements on 30 May).   It was only two weeks since Hughes had gushed about Makhlouf: if they had thought they could acquit him of everything, most likely that would happily have done so.

The final paragraph is irrelevant to the topic of interest on the day.

Which leaves simply that second paragraph.  A very senior public servant needs to draw attention to the fact that an inquiry judged that he was acting in good faith.  “Good faith” is an incredibly weak standard, and I don’t recall anyone –  through the whole affair –  suggesting that his actions were taken other than in good faith.   16 year olds probably mostly act in “good faith”, but it doesn’t mean they make good calls.

And what of political neutrality?  Sure, there is no suggestion that Makhlouf was some Labour hack, but who ever thought otherwise?  After all, he had been appointed and reappointed, with the consent of ministers, under a National government.  Had the tables been turned, and Labour MPs had done the same thing under a National government presumably Makhlouf would have handled things in exactly the same way.

That is, badly.

And then we get the central sentence of the short statement

It also confirms that I acted reasonably, other than in my descriptions of the incident.

As I pointed out in my earlier post, the “reasonableness” test used by Ombler was a very weak one –  nothing about whether the actions were what could reasonably be expected from a senior longserving Secretary to the Treasury –  and yet there were still three explicit findings against him, about “unreasonable” choices.   Read the report itself and Ombler could easily have identified several more (for example, Makhlouf’s refusal to accede to the urging of the head of the GCSB –  actual technical experts –  to correct the inappropriate use of the word “hack”, or his meeting with the Minister in which he was reading out the draft of the infamous press release (containing “hack”) but clearly didn’t understand enough to be able to answer the question of why GCSB wasn’t investigating).

But stick with the three adverse findings by Ombler.  Gabs attempts to diminish them, calling them just being about how he “described the incident”.

It is barely even accurate and is highly misleading. Here is the extract from the report

Mr Makhlouf did not act reasonably in relation to:

  • his use of the phrase “deliberate and systematically hacked” in his media statement issued at 8:02pm on Tuesday 28 May
  • his use of the bolt analogy in media interviews on the morning of Wednesday, 29 May
  • in his media statement on the morning of Thursday, 30 May, continuing to focus on the conduct of those searching the Treasury website rather than the Treasury failure to keep Budget material confidential.

The first involved a press release –  on what was already a very sensitive political issue –  the second involved a sustained round of interviews (he had chosen to do, at the request of the Minister) with four of New Zealand’s main media outlets, and the third  –  about a release on the morning of Budget day, amid seriously escalated political tensions –  goes directly not just to description but to mindset and perspective  (as Ombler noted, even during the inquiry interviews Makhlouf continued to hold to an interpretation of Budget confidentiality conventions that (a) no other serious observer holds, and (b) which Ombler politely takes apart).

Those alone were really serious failings, and Makhlouf accepts not one of those findings.

He might take comfort (as he does)

I am pleased that my honesty and integrity are not in question.

But that isn’t really the point is it? What is in question is his competence, his judgement, his ability to lead under fire, his willingness to listen to others, his ability to recognise mistakes and learn from them –  let alone his willingness to account to the people of New Zealand for his handling of this episode, played out in the full glare of the public spotlight.

The whole episode, right to the very end, reflects pretty poorly on Makhlouf and on SSC, including the fact that Makhlouf didn’t front up to the media at all, and that SSC didn’t insist (Makhlouf was still their employee on Thursday). No one could force him to hold views that he didn’t, but if he is going to refuse to accept any responsibility, or acknowledge any misjudgements, he should at least have had the decency to have fronted up to the media and faced, and answered, serious questioning.  As it is, he got off without even a formal reprimand – enabling him to get away with spin like this press statement –  and simply refused to explain his view.  Peter Hughes argued that Makhlouf’s reputation had taken a big hit anyway, and that that was really what mattered for those in these “big jobs”.    But it isn’t.   The old biblical maxim is relevant here

“For unto whomsoever much is given, of him shall be much required,”

People in those “big jobs” have money, power, influence, status, connections –  in Makhlouf’s case even citizenship –  bestowed on them.   We should expect much higher standards of responsibility and accountability for them.     Sure, there are then bigger costs (to those individuals) when they fail and are held to account, but that is how the system is supposed to work –  the quid pro quo for all those things society bestows on them.   It reminded me of Victoria academic Lisa Marriott’s work

Associate Professor Lisa Marriott, from Victoria Business School, has spent six years looking at the unequal treatment of people who commit welfare fraud compared with those who commit tax fraud, with her research showing that beneficiaries are treated more harshly at every turn.

I don’t suppose it is conscious choice, but it seems to happen anyway.  In Makhlouf’s case, the system worked to minimise the price he paid, the accountability, for some really severe misjudgements and a refusal to accept he’d done anything wrong. (Of course, the circumstances of the calendar helped too – had his term still had six months to wrong, it is hard to see how he could have survived in office, avoiding facing media or parliamentary questions, all while maintaining he had done nothing wrong.)

Pottering around doing chores this morning, I listened again to Makhlouf’s Radio NZ interview on 29 May, and the discussion with RNZ’s political editor immediately after the interview. It was fascinating to do so having to hand the SSC report and the detailed timeline it contains.  We now know a lot about what Makhlouf really knew (or should have), what advice he’d taken (and rejected) and so on…..and it was a reminder of just how much of a political firestorm this was (a point the SSC report largely ignores, even though Makhlouf was –  in good faith no doubt –  inflaming it): the RNZ political editor was talking of this as an episode that could cost with Bridges or Robertson their jobs (at this point, Makhlouf was the unquestioned good guy).  It would be tedious to run through many details, but suffice to say that although Makhouf had a fair idea of the nature of what had gone on (the report makes that clear) he made no effort in the interview to hose down talk of a serious cyber-attack and he explicitly rejected the idea that there had been any incompetence or sloppiness at the Treasury end (when the report makes clear that Treasury had a good idea on the previous afternoon that the clone site indexing issue was a probable explanation).  He fed the frenzy, played distraction……and was still playing distraction in his statement this Thursday, as he headed out the door, refusing to take any questions,

In my very first post on this business I wrote

Whatever your view of how Gabs came to be appointed and reappointed, or of his overall stewardship of the office of Secretary to the Treasury, it is a sad business in many ways.

And, of course, it has only gotten worse –  and sadder –  since then.  What a sad, rather tawdry, way to end an eight year term as the most senior public servant in New Zealand.

And yet it was (and remains) all of his own making, as –  instead of hosing things down, making amends, apologising –  he climbed onto the pyre as if determined to commit reputational-suttee.

Perhaps acknowledging nothing, conceding nothing, avoiding a formal reprimand, helps him in some short-term sense –  harder for the Irish to backtrack perhaps? – but he leaves a severely-dimished figure, and you have to suppose his future colleagues around the ECB Governing Council will always look rather askance at him, wondering about his judgement, pressure under fire and so on.

It is sad to see, especially when it is someone one has had a little to do with. As an outside observer and commentator I’ve been a bit ambivalent about Makhlouf.  Mostly critical of his stewardship to be sure, but there was a reasonable speech just a couple of weeks ago, and it is only a couple of months ago since, out of blue, one Saturday afternoon I had an umprompted text from him.  He must have been reading this blog.  He chose to remark on two “particularly good posts on [  ] and [  ] this week”.

 

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