Ministerial conflicts of interest under scrutiny

After all the conflict-of-interest scandals that dogged the last Labour Government, the public might have expected that the new National-led Government would be keen to raise the standards in Cabinet and tighten the rules. Yet that doesn’t appear to be happening. This can be seen in the way the new Government is dealing with the disclosure and management of potential conflicts of interest involving its ministers.

This week, the Cabinet Office has released its public register of conflicts of interest declared by ministers – which you can see here: Proactive release of information about management of ministerial conflicts of interest

This short document lists some basic details about the actual, potential, and perceived conflicts of interest involving ministers over the first five months of the administration until the end of April. It’s essentially a list of the policy and public issues that individual ministers may be compromised in and have, therefore, stepped aside to manage the perceived or real conflicts of interest.

The published register only contains the most basic information from the full register kept by the Cabinet Office. It gives some sense of how the potential conflicts of interest are being dealt with and which of four categories of conflict is involved – Pecuniary (i.e. personal financial interests), Personal (e.g. family connections), Portfolio (where there is a clash of responsibilities in different roles), and Constituency (relating to a Minister’s role as an MP serving the public).

What’s declared in the register?

Ten of the Government’s twenty-six ministers are included in the public register: David Seymour, Nicola Willis, Judith Collins, Paul Goldsmith, Mark Mitchell, Shane Jones, Tama Potaka, Brooke van Velden, Erica Stanford, and Melissa Lee.

1. David Seymour has a “personal” conflict regarding the rebuilding of the Dunedin Hospital. He has a family member who works for a company that is tendering for work. Although it doesn’t directly relate to his portfolios, he says he will stay out of any discussions involving the hospital.

2. Nicola Willis has declared a personal conflict regarding Christchurch International Airport and Genesis Energy. She doesn’t appear to have a financial interest in those companies, but she has a family or close associate involved with them.

3. Judith Collins has already publicly declared that she has a potential personal conflict of interest regarding her role as Attorney-General and the Fast Track Approvals Bill. She will, therefore, stay out of the issue, including leaving the room when the Fast Track is discussed.

4. Paul Goldsmith has declared a potential conflict of interest related to the Problem Gambling Foundation. He has been reported as requesting that the details of the conflict not be made public.

5. Mark Mitchell has previously advocated on behalf of constituents, the family of Constable Matthew Hunt, who was killed in 2020, and will therefore pass any Police matters relating to this onto another minister.

6. Shane Jones has declared a personal conflict of interest, but it’s not clear which portfolio. He says he will not receive papers or participate in certain decisions.

7. Tama Potaka has a personal conflict of interest regarding his former role as a Treaty negotiator. He says if the Mōkai Pātea Waitangi Claims Trust comes up in his job as Treaty Settlement Minister, he will pass this on to another minister.

8. Brooke van Velden has declared a constituency conflict of interest regarding citizenship and lottery funding in her Tāmaki electorate. She will pass any issues relating to the role of Internal Affairs on to another minister.

9. Erica Stanford has also declared a constituency conflict of interest relating to her Immigration portfolio and her MP work in the East Coast Bays electorate.

10. Melissa Lee has declared a constituency conflict of interest regarding her ACC portfolio and “decisions relating to Mt Albert constituents.”

An Opaque register lacking in detail

The public register tells the public very little. No detail is provided about the exact conflicts of interest. Hence, two press gallery journalists have been requesting more information from the Beehive but have mostly been declined. Ministerial spokespeople have generally said that details of the conflicts are “not generally disclosed.”

Today, Newsroom’s political editor, Laura Walters, complains that “the publicly available information is far from elucidating. The wording is vague, personal conflicts don’t say who is involved, and some potential conflicts already in the public arena aren’t included” – see: Ministerial conflicts register leaves room for speculation (paywalled)

This is a real problem, according to Walters, about the whole disclosure regime, which means the public can’t have confidence in its integrity: “the lack of detail and withheld information in the public document raises questions about the narrow focus of the disclosure regime and the rigour of the processes put in place to deconflict. It’s hard for the public to scrutinise the ministers’ potential conflicts, or the processes for de-conflicting, without further information.”

Walters has requested comment from the Cabinet Office, which manages the process. They have effectively said that they don’t give out more detail to protect the privacy of those involved and the confidentiality of the way the Cabinet operates.

Questions about what has been disclosed

Walters has attempted to learn more about some of the conflicts of interest disclosed this week but has failed to find much more information. She tried to get more information from both Judith Collins and Shane Jones but was declined, which means “the nature of the personal conflicts that have led to those decisions remains a mystery.”

She also notes that Jones has previously disclosed more of his potential conflicts of interest, pointing out that when he was a minister in 2020, his interests in forestry companies and his relationship with “close associates” who might benefit from government grants from the Provincial Growth Fund were disclosed.

Similarly, the latest disclosures were reported on yesterday in The Post by Thomas Manch, who also focuses on the absence of information on Jones’ potential conflicts – see: Cabinet ministers keep quiet about registered conflicts of interest (paywalled)

Jones might have been expected to disclose his portfolio conflicts because he’s the Minister for both mining and fisheries, and when it comes to seabed mining, these two industries have opposing interests. Jones had previously said he would recuse himself from any bid made for Fast-Track approval by the company Trans-Tasman Resources Limited (TTRL).

Manch explains: “Jones had in March told The Post he was seeking to be removed from matters related to proposed seabed mining in Taranaki, due to his connection to the fisheries industry – parts of which oppose such mining – and his support for the mining industry. However it was unclear whether this was the conflict unrelated to his portfolios listed by the Cabinet office. A spokesperson for Jones did not explain further the listed conflict, but said in a statement the Cabinet office declaration balanced the need for public assurance in the system and the privacy of individuals.”

Newsroom’s Laura Walters has also looked at this issue and reports: “Jones has provided information relating to the TTRL decision to the Cabinet Office. But it seems the office did not believe this needed to be publicly disclosed based on the rules. A spokesperson said the Cabinet Office does not comment on advice it gives to ministers about conflicts of interest.”

No conflicts of interest declared for political donations

Despite the growing public interest in political donations to parties and individual politicians, the Cabinet Office has not attempted to incorporate the resulting conflicts of interest into the disclosure regime or to report on how these conflicts might be managed.

Prime Minister Christopher Luxon has previously told the public that the Cabinet has “incredibly good” disclosure and conflict of interest rules regarding political donations. He made this point in February this year when questions were raised about donations that ministers might have received from the tobacco industry.

Since then, there have been increased questions about the vast amount of money given to the parties in the coalition government and whether these gifts result in policy being bought. For more on the $16.5m of donations declared by National, Act and NZ First, see my analysis on this in May: Following the political money

I have also previously written about how substantial donations have been made to the National and Act parties from people associated with the property developing company Winton and how this might influence their policies in government – see: Who is funding National to victory? and The Vested interests shaping National Party policies.

Such case studies don’t prove any wrongdoing, but they do show the potential or perceived conflict of interest—and that’s what the Cabinet Office’s regime is supposed to deal with. It’s, therefore, disappointing that governments continue to fail to address this element of integrity.

Similarly, there doesn’t appear to be any acknowledgement of close family connections that require disclosure and management. For example, Chris Bishop’s wife, Jenna Raeburn, has been a long-time political operative, helping run Bishop’s election campaigns, working in the Beehive, but then moving into the lobbying industry. She now works for Wellington Airport, a critical infrastructure asset that will likely enter into the Minister for Infrastructure’s considerations.

Walters has looked into this and reports: “Bishop’s wife’s position at Wellington Airport is not included in the register, despite Bishop proactively declaring the information to the Cabinet Office.” She also points out that Shane Jones’ family connections aren’t disclosed: “There is also no specific mention of his son, Penetaui Kleskovic, who is a councillor on the Far North District Council.”

While the Cabinet Office doesn’t seem to believe these family connections need to be disclosed, the public might think otherwise.

No disclosure of Ministerial pecuniary interests

It is notable that the latest register does not disclose conflicts of interest regarding assets owned by ministers. Of course, this was the big problem that led to Transport Minister Michael Wood's downfall last year.

But there’s no information to find on this. For some ministers, it might simply mean they have divested themselves of assets. Or perhaps such assets have been put into trusts. We aren’t given any information on how such conflicts have been managed.

Yet the recent publication of Parliament’s annual MP’s pecuniary register gives us some information on potential problems. I covered this recently in the columns, MPs’ financial interests under scrutiny and MPs own 2.2 houses on average.

This analysis shows that ministers certainly own a lot of housing property—on average, they have three houses each. Ministers also have a lot of family and legal trusts—three-quarters of them use trusts for their various affairs.

Some also have company directorships and ownership interests in business entities. Here are some highlights of ministers’ business interests from the pecuniary interests register:

• Judith Collins: CDL Hotels Limited – hotel operator

• Winston Peters: Oriwa Enterprises Limited (not trading) – consultancy and contract advice

• Shane Reti: Reti Holdings Limited – medical consulting and property investment

• Shane Jones: Atamai Services Limited – consultancy

• Tama Potaka: Aka & Associates Limited – consulting; TriMāori Corporate Trustee Limited – charity events; Koa Group Limited – trustee company

• Andrew Hoggard: Oxford Square Capital Corporation – investment company; Goldman Sachs BDC Incorporated – investment company; The Warehouse Group Limited – retail; Australian Wealth Management – insurance

• Mark Patterson: Alliance Group Limited – meat company; Farmlands Cooperative – farm supplies; Ballance Limited – fertiliser supplies; Wools of New Zealand Holdings Limited – wool marketing

• Nicola Grigg: NG Property (2017) Limited – rental property

• Matt Doocey: Avonhead Shopping Centre in Christchurch.

• Nicole McKee: Firearms Safety Specialists New Zealand Limited – business consultant service

Once again, there is nothing necessarily wrong with ministers owning companies. But the public might need to see more information from the Beehive about how they are managing these potential conflicts of interest. At the moment, there simply isn’t enough transparency to afford the public confidence in the integrity of decision-making in the Beehive.

Of course, when the current parties of government were in opposition, they (rightly) made much of the integrity lapses and lack of transparency of the last Labour Government. However, given the ferocity of critique from National, Act and NZ First in 2023, voters might have expected the new government to be more open. Yet what we now see in 2024 is very far from the “open government” promised.

Dr Bryce Edwards

Political Analyst in Residence, Director of the Democracy Project, School of Government, Victoria University of Wellington