PSC not walking the talk

A quick Google of “Public Service Commission values” brings up a list that includes this item among the list of things PSC say “are how New Zealand expects public servants to behave”

If walking that sort of talk meant anything you might suppose it would mean that when the Public Service Commissioner himself issued a press release it would be clear and straightforward, free of any intent or effect of misleading the press and public. And that if, perchance, the Commissioner once fell short of the high standard he himself had laid out then contrition and correction – with a dose of humility thrown in -would follow quickly.

Instead, we are dealing with Peter Hughes and the Hughes-led PSC.

Two months ago Peter Hughes released a report into the excessive and inappropriate spending by the Ministry for Pacific Peoples on the farewell to its outgoing chief executive as he moved down the road to head a bigger government department (MCH). The spending was lavish and inappropriate, something the report rightly (if belatedly) called out. But the second element of it all was the lavish taxpayer-funded gifts given to the outgoing CE, Mr Leauanae, and the spending by MPP of taxpayer money on travel for members of his family for his welcome to MCH. With the report there was a covering press release (the report document itself is linked to in the press release). In the press release in particular Hughes went out of his way to play down Leauanae’s culpability, with this culminating line

I thank Mr Leauanae for putting the matter right at the first opportunity

Except that Mr Leauanae did nothing of the sort. There had been no dates at all in the press release and none of the relevant ones were in the 11 page report either. Casual readers might reasonably have supposed it had all been sorted out within days, not months later.

But OIA requests finally got confirmation from PSC (and MPP) that despite this inappropriate spending having occurred in October last year, the money was not returned until March (in respect of the gifts) and July (in respect of the travel). And not from any belated sense of compunction on Mr Leauanae’s part. I wrote about this in a post a few weeks ago.

Which is by way of prelude to Andrea Vance’s article on the issue in The Post this morning. She had drawn on the OIAs and my post and had asked PSC some follow up questions, including asking why the Commissioner had said that the money had been paid back at the first opportunity when the documents – from PSC itself – had clearly shown otherwise. Vance was kind enough to share the statement from PSC with me. These are the relevant paragraphs

There are multiple problems with this.

Any public servant – notably any very senior public servant – would have known immediately that it was not appropriate to receive lavish farewell gifts (no matter what the mix of private and taxpayer funding) and even more so to have received public money from his previous employer to pay for travel for family for his welcome into a new role down the road. (He should also immediately have recognised that the lavish farewell itself was in breach of all public service standards and have immediately alerted Hughes to the mistake by his underlings (on his watch)). On timing from my previous post.

The PSC statements seem to rely entirely on the point that it was not until the day or two before the money was paid back that he knew exactly how much each item had cost. He hadn’t asked, not even once, in all the previous months. It simply wasn’t sorted out “at the first opportunity”

And while Leauanae did eventually put out an apologetic statement, it was only the day after the Commissioner’s statement, when the issue started to get some media coverage. And we know there is no written apology to PSC or MPP because my OIAs covered all communications with Leauanae on these matters, and none of them included either an apology from him (or any reprimand by the senior PSC officials dealing with the matter – and PSC did not say there were any documents they were withholding on the grounds of, say, personal privacy).

But then notice that middle paragraph of the PSC statement, which followed a comment that Leauanae had not been involved in decisions at MPP about the scope, nature and expense of the farewell

The Commissioner found in his review that Mr Leauanae’s decision to recuse himself was an error in judgement. As chief executive at the time he was responsible, overall, for agency expenditure and ultimately for the spending decisions of his organisation. That has been called out clearly and strongly, and is on the public record.

which sounds fair enough I guess. Or would if it were true. When Vance sent me this statement yesterday I went back and checked the report. From Vance’s article

There is simply no statement along those lines in the report or the press release. Did Hughes and his comms guy really suppose no one would check? Or did they just not care?

Not only are the specific words not there, but neither is anything along those lines. Read the documents yourself if you doubt me (I had to twice, because I couldn’t quite believe we were just being lied to). The press release will take you 2 minutes, and the report not that much longer. The report simply notes that even if he formally or informally recused himself, Leauanae was still chief executive and was responsible (which is not in dispute, but is very different from what the PSC statement yesterday said).

There are a lot of other points that could be repeated from my previous post, including about how PSC’s oversight of the public service was so lax that it was months after the event before they knew (or claim to have known) about any of this lavish spending, despite two of their staff being there, another CE being a speaker, and the relevant government minister also having been a speaker. But you can read the previous post for that.

I’m just going to end where this post started. Hughes and the PSC proclaim the importance of the value of trustworthiness, integrity etc. Little or nothing of that has been on display around the public side of this investigation into serious misjudgements (and, it appears, weak management and/or a sense of entitlement) by someone (Leauanae) who appears to be a Hughes protege. Never less so that in the follow up statement to Andrea Vance yesterday.

On the evidence of this affair, PSC appears to serve PSC’s interests and those of its chosen. That is, of course, the tendency that economic analysis would tend to predict. But it is a very long way from the guff that Hughes likes to spout about the public interest and public trust.

11 thoughts on “PSC not walking the talk

  1. Of course it was lavish and quite inappropriate spending. No question. But the amounts involved are small relative to a department’s overall spend and might not have hit the PDC’s radar till someone drew it to his attention. It might have been really difficult for the senior accountant – who reported to the CE in the ministry – to refuse to pay such expenses.

    No doubt as a result of this the PSC has issued guidelines for farewell events and gifts. But we both know there are ways of hiding expenditure of this nature – splitting the cost across several account codes, etc. The ‘Entertainment’ line item might be completely in line with the budget and hiding expenses elsewhere may not be spotted by the auditor, either.

    Peter Hughes was widely regarded within the Public Service as an excellent leader before he took over the PDC role and is considered a safe pair of hands. It’s a pity this has come back to haunt him.

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    • Leauanae should have been on the phone to Peter Hughes the next day doing the new culpa: “ there was clearly excessive expenditure at my farewell last night incl some embarrassingly and inappropriately large gifts to me. I thought you should be aware at that first opportunity and of course I’m only to happy to cooperate with any inquiry”.

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  2. I find “Editor’s” comments (above) simply amazing. Yes of course we know about the close and generous interconnections between Pacific Island communities and individuals. But it is simple reality that in a modern civil society, being employed by the taxpayer carries particular responsibilities, and individual cultural norms must give way before sensible requirements aimed at ensuring avoidance of potentially corrupt practices. Gift giving and receiving us clearly one of those practices which carry possibilities for public duties being skewed.
    The idea that having such, let’s admit,…quite unremarkable employment rules, is a “middle-class pakeha” viewpoint is quite silly.
    Civil servant behaviour standards are hardly unique to NZ. The evolution of these are surely common through democratic nations and one could probably trace their origins to civilizations as diverse as Roman, Greek, Persion, etc., etc., empires.
    There may well be cultural practices from any number of the many ethnicities in NZ which might usefully be adopted in wider society. But giving gifts to civil servants, or extravagant celebrations for quite modest achievements should not be part of responsible government.

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  3. Compared to this weeks MPC decision to apparently ignore NZ inflation figures, plus the spending promise’s of every major political party ( with the exception of ACT ) and the associated lack of regard for a sound economy ,
    The above machinations in this blog while appalling are almost irrelevant compared to the damage inflicted on the NZ economy by the MPC non decision re the OCR!

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    • Can’t write about everything all the time (this one was delivered to me by some rare media follow up of a serious issue around public sector integrity). The MPC decision/statement this week was poor but quite how much it (specifically) matters is inevitably a matter of speculation and uncertainty. More generally, I doubt I can be accused of giving insufficient attention to RB failings!

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