It is sometimes hard to tell when Reserve Bank actions are concerted, when somewhat chaotic, and quite what mix applies in any particular case.
Earlier this week I wrote about MPC member Peter Harris’s “interview” – responses to an initial series of emailed questions – with Stuff’s Tom Pullar-Strecker. I assumed it was coordinated and managed by the Bank – though on reflection who could possibly have advised Harris to answer as he did – but it appears the trainwreck, which reflects poorly on both him and the institution, may have been almost all of his own doing.
And then there is the saga of Rodger Finlay, appointed last year as part of the Bank’s “transition board” and as a full Board mmbers from 1 July this year while he was – and intended to continue as – chair of the board of NZ Post, the majority owner of Kiwibank, an entity subject to the Reserve Bank’s prudential regulation and supervision. It was a staggering conflict of interest, almost inconceivable in any well-governed country, that the Reserve Bank itself (Governor and outgoing Board) seem to have had no problem with. Ever since I noticed this appointment in June, I have been trying to get to the bottom of what went on.
Both The Treasury and the Minister of Finance have answered OIA requests in a fairly timely, and apparently fairly open, way. Not so the Reserve Bank. The text below is from a post dated 27 October.
I replied to that apology thus
And I few days later I had this from the Bank, with specific suggestions – from them – on framing the request
I responded the next day
And within a couple of hours she responded
Note that “next couple of days” in the first paragraph.
I heard nothing more until Tuesday, which must have been almost the last of the 20 working days the Bank had to respond. Then I received an email from the same staffer advising me – no great surprise, and I wasn’t greatly bothered – that they were extending the request and giving themselves another 14 working days. But, as I noted to myself, at least I’d have results by Christmas.
Note that the reason given for the extension was “This is in accordance with section 15A(1)(b) of the OIA, where the consultations necessary to make a decision on the request are such that a proper response to the request cannot reasonably be made within the original time limit.”
But late the next day I had a lengthy letter from one Adrienne Martin, Manager Government and Industry Relations, and apparently Ruth’s boss, threatening to refuse my request altogether on the grounds that it would – she claimed – take an estimated 67 working days to respond to it, an estimate itself (she claimed) based on a narrower request than the one the Bank had suggested (see above), as refined (see above). After rehearsing the options open to the Bank she concluded thus
All of which has already bought the Governor 5 months of delay in getting any clarity on how he, his senior managers, and/or the old Board thought it could possibly have been appropriate to have appointed the chair of the majority owner of a registered bank, supervised by the Reserve Bank, to the board which would take full legal responsibility for all the Bank’s supervisory and regulatory functions.
I’m not yet sure how I will respond. I simply do not buy the “67 working day” line, and it is particularly incredible when they offer that they will provide a substantive summary of the relevant emails (presumably they don’t take the affected parties 67 working days to find, let alone summarise). Moreover, the Bank’s General Counsel has form as an aggressive and very motivated player, championing the Bank’s corner, and (more specifically) earlier releases suggest that he and his staff were themselves key participants in these discussions, so how much confidence should I have in the integrity of the process? I’m also not just interested in the “conflict of interest management” but how the Bank came to take the view that this conflict could ever be manageable (substantively and reputationally) when few/no other serious bank regulators would have.
On the other hand, the alternative may be ending up with nothing at all.
As a reminder, the Bank regularly claims it is very open and transparent. As I have pointed out for years – predating Orr – they tend to be fairly transparent about things that advance their interests (who isn’t?) but not otherwise, and real transparency and accountability encompasses both. The Bank falls a long way short and this is just the latest example. Serious questions have been raised about the Bank’s involvement with a major public appointment. An open and transparent central bank, once serious questions were being raised, would have been pro-active in identifying and releasing all the relevant papers, making a public statement, and perhaps opening themselves up for serious questioning.
But this is the Orr/Quigley Reserve Bank.
The public deserves better.
UPDATE (5/12): I gave up, and sent this response this morning
5 thoughts on “Rodger Finlay and OIA obstructionism”
Reblogged this on Utopia, you are standing in it!.
The problem for the Bank is twofold. The more they obfuscate and delay, the more oxygen they give to this issue. It may have been better to simply ‘go early and go hard’ as the Governor likes to say, air the dirty laundry and be done. And second, they don’t seem to realise you’re now a dog with a bone, you’re not simply going to let go. They’ve under estimated your tenacity. You’d think they’d know their adversary, but apparently not.
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A simple “it was a mistake; we wouldn’t do that again” back in late June would have rightly killed the issue immediately.
If you were to anonymise this situation and describe it to someone the response would probably be, ‘what third-world country is that?’….. probably a great disservice to those countries with such a moniker.
The Finlay affair is turning into the RBNZ’s Watergate; the lack of transparency to your OIA request brings to mind a (paraphrased) line from that period, ‘What did they know it and when did they know it?’
Management’s involvement should have been confined to whether or not they had an objection to the individual, which should have been ‘yes’ given his other governance role at NZ Post. It’s hard to fathom why there are so many emails to filter through that it warrants such a long delay, but suggests that management’s finger prints are all over his ‘appointment’, leaving Finlay’s independence and integrity, if it wasn’t before, now completely comprised.
It’s ironic that the RBNZ makes a great song and dance about ‘conduct and culture’ at the institutions which it prudentially regulates yet displays standards that probably wouldn’t meet the thresholds it sets for others. If National/Act are serious about an independent and credible central bank they should concentrate their efforts on arresting the malversation that it is afflicting the RBNZ by first and foremost bolstering the quality of governance at the Board level.
People who profess to serve the public and who are caught in such circumstances would have long since done the honourable thing and resigned; one hopes that Finlay and Quigley, who as Chair bears the ultimate responsibility, choose to do the same.
A former colleague who offers advice and consultancy services to central banks in “third world” countries made more or less the point in your first para when this story first broke. A country has to be very far gone down paths of institutionalised corruption before such an appointment could occur, let alone be supported/championed by the Governor and Board chair of the central bank,