Deborah Coddington pinged

JUNE 2002 EDITION

Evidence of a political and financial spider’s web involving Cabinet Ministers, millionaire businessmen, senior journalists and newspaper editors in a plan to manipulate public opinion has emerged in a pile of explosive documents leaked to Investigate magazine.

The documents, pictured on the following pages, show tentacles of influence spreading out from New Zealand Business Roundtable CEO Roger Kerr across virtually all the main sectors of NZ society.

A source with access to the Roundtable’s confidential files dumped a number of them in the hands of this magazine that show:

~A National Cabinet Minister apparently seeking money from Fay Richwhite in 1993 for personal reasons

~A list of policy demands being delivered by David Richwhite, Lion Nathan boss Doug Myers, Air New Zealand chairman Bob Matthew and Roger Kerr to Minister of Labour Bill Birch

~A summoning of National Prime Minister Jim Bolger and Bill Birch to a meeting with Myers, Matthew, Kerr and Telecom boss Rod Deane at Brierley’s head office in Wellington

~An apparent close working relationship betweenDominion
editor Richard Long and the Business Roundtable

~That the Business Roundtable offered to bribe — in Investigate ‘s opinion – journalists and columnists in newspapers to write articles showing Roundtable policies in a favourable light

~That a journalist who is now a senior writer for North & South magazine was secretly paid by the Business Roundtable to write a book under her own name that portrayed Roundtable policies in a favourable light

~That speeches and articles allegedly written by top business leaders may not have been written by those business leaders at all, but by the Business Roundtable as part of a cynical attempt to manipulate public, business and political opinion

North & South’s Editor-at-large, Warwick Roger, who has publicly accused Investigate journalists of wallowing in conspiracy theories, may like to publicly explain the relationship between his magazine’s senior writer, Deborah Coddington, and the New Zealand Business Roundtable, in the wake of the publication of these documents.

Not only do the papers obtained by Investigate show Coddington failed to reveal a conflict of interest regarding her authorship of the book Turning Pain Into Gain, but that she looked forward to continuing her close relationship with the Business Roundtable while supplying “business/economy articles” to North & South and other news media as well.

Coddington decided to hide from the public the fact that she was secretly drawing a salary from the Business Roundtable because she worried that readers would doubt her journalistic credibility if they knew.

Other prominent New Zealanders to emerge as mouthpieces of the Business Roundtable include authors Karl Stead and Alan Duff.

A letter from Stead to the Roundtable’s Michael Irwin in March 1994 begins:

“I would like to write the piece you suggest for the Dominion, accepting NZBRT’s offer to make up payment to one day’s work at the agreed rate.”

The article was about education.

Another document shows Roger Kerr offering to top up another columnist’s usual payment from the Dominion by a further $500 “to make it worth the trouble” to write an article where the “thinking is in line with that in our study”.

Investigate has no knowledge whether Dominion editor Richard Long knew that the Business Roundtable was secretly payingDominion columnists extra money to write pro-freemarket articles, and the magazine makes no allegations in this regard. But the documents on the following pages do show a very close relationship between Roger Kerr and Richard Long.

Investigate is also aware that Long ordered alterations to some of the news coverage of the Winebox Inquiry by Dominion correspondents, allegedly because it showed New Zealand First leader Winston Peters in too positive a light.

Ironically, it is in an article published by the Dominion attacking Peters that the Business Roundtable’s hypocrisy is best illustrated.

The article, allegedly written by Business Roundtable chairman Doug Myers but apparently penned by Roger Kerr, is headlined “Importance of Being Honest” but could more accurately have been slugged “The Pot Calling The Kettle Black”.

“The importance of the judgement of the District Court in the defamation case taken by Selwyn Cushing against New Zealand First leader Winston Peters, from the Business Roundtable’s perspective, is that the accusation that it had sought to exercise improper political influence was found to be totally baseless,” crowed Myers [Kerr] in the opening paragraph.

“Winston Peters should, as a minimum first step, make a full and unequivocal apology forthwith to all parties wrongfully accused.

“From a national perspective, the sequence of events has highlighted the lack of substance underlying the claims about corruption in New Zealand made in the AustralianFour Corners programme and the earlier TVNZ programme For The Public Good.

“There have been other instances in recent years of false and exaggerated claims by politicians, regulators and journalists about alleged inadequacies in our laws, regulations or codes of behaviour as they affect commerce.

“Contrary to such claims, the general reputation ofbusiness in this country for honesty and integrity is deservedly high. New Zealand has come out in first place in international surveys by Transparency International as the country which is freest from corruption in business and politics.

“The Business Roundtable supports demands for the highest standards of honesty and integrity in politics and business. It is up to individuals and firms to set such standards and to promote them in the wider community.

“As an organisation, the Business Roundtable believes that there is no place for improper influence in any sphere of public life. It operates on the basis of open and transparent research and analysis and on the principle that public policies should be determined on the merits of the relevant arguments.

“When the disreputable television programme For The Public Good was found to have made blatantly untrue allegations about improper business influence on Government decisions, Television New Zealand received the stiffest penalty ever handed down by the Broadcasting Standards Authority.

“Similarly,” concludes Myers [Kerr], “Michael Laws resigned from Parliament after accusations of improper conduct. At a time when New Zealand is facing important choices in the coming election, it is vital that public debate should focus on the merits of policies, that high standards of integrity in politics should be upheld, and that those who fall short of them should be held accountable.”

Investigate has not sought comment in advance from any of the parties mentioned in the documents on the next few pages because of the high likelihood of an expensive gagging writ. Instead it will be up to other news media to seek reactions to this major story and the leaked documents.

However, Investigate did invite the Justice spokespeople from each main political party, and an expert on journalism ethics, to comment on a hypothetical case we put to them. Their responses follow after the documents: (read the original article, with documents, online here)

a question of journalistic ethics?

The events detailed in these documents happened several years ago. We asked journalism ethics expert Jim Tully, and a group of senior politicians, to answer what they understood to be a series of hypothetical questions. Their answers should not be construed as informed comment on what you have just read, but their answers are indicative of current attitudes to such practices in general terms:

1.Please comment on the ethics/professionalism of the following scenario: If any journalist was to write an article for a newspaper on an important matter and received money from an interested lobby group for doing so…

Journalists must be seen to be independent in their information gathering. They should avoid affiliations and incentives which compromise their independence and create, or indeed appear to create, conflicts of interest.

A journalist employed by a news organisation, or freelancing, who receives money from a source or an individual/organisation which has an interest in the material published or broadcast is compromising their independence and is, arguably, performing the role of a public relations person not an independent journalist if that is what they are purporting to be. If they were commissioned to write the article, the conflict of interest is clear-cut.

It would be appropriate for any financial relationship to be declared to the publisher and to be acknowledged on publication. Readers are entitled to know the an article was written on this basis just as we would expect articles on, say, the travel pages to acknowledge any provision of free travel and accommodation etc and by whom.

2. And a book?

If the book was commissioned by the lobby group, one would expect this to be acknowledged.

3.If a newspaper editor were to run a feature article on a political topic, written by an allegedly independent academic but the person was known to the editor to be working at the behest of influential lobby groups, would that be a breach of ethics?

Affiliations that reflect upon the independence of a writer should be disclosed.

– Jim Tully, Lecturer in Journalism

the questions to politicians

Firstly, if an ordinary MP were found to have substantial direct private business dealings with an influential individual or organisation, should such an interest be required to publicly declared?

Secondly, if a Cabinet Minister or Prime Minister were found to have substantial direct private business dealings with an influential individual or organisation, should such an interest be required to be publicly declared?

Thirdly, if a Cabinet Minister were found to have accepted money from an influential individual or organisation, in return for which such an individual or organisation wanted top level access to the Minister to provide advice on policy matters, should such an incident be disclosed to an authority? If so, which authority?

STEPHEN FRANKS:

Conflict of interest rules for Cabinet Ministers are designed to reduce the risks of corruption. I was
interviewed by Al Morrison in North & South several months ago on the topic of corrupt influence.

Interests registers for Cabinet Ministers are a crude form of prophylactic. They signal to the Minister that any use of executive powers to favour his or her personal or family interests is likely to be evident. Executive power is important, because Ministers have all kinds of discretions to exercise, and our law and constitution assume that they will be exercised in the best interests of New Zealanders generally. As the Parliamentary commencement prayer puts it “Putting aside all private and personal interests”.

On the other hand, expecting disclosure to deal with most concerns about undue influence is simply puerile. The influences that affect politicians are largely political, but that covers a broad range. For example lobby groups implicitly threaten the political future of MPs by the influence they have with their members and with other media in affecting the politician’s reputation. The best lobby groups achieve the most by providing persuasive argument and information which the political decision maker would otherwise not have.

Your questions identify a particular source or potential source of influence, namely the personal profit that might be derived from or disguised in a private business dealing. It is not the fact that the dealing is with an influential individual or organisation that matters, it is whether the dealing is with people who have some interest in a matter in which the politician also has power. Voting in caucus without disclosure of a conflicting interest should be considered completely unethical. Votes on select committees and in Parliament are open, and debated. This differs from the position for Ministers. Many of their exercises of discretion will never attract public attention. The short answer to your questions is then:

1.Ministers should disclose material private business dealings with bodies where any conflict of interest might reasonably be anticipated. To the extent that is feasible the disclosure should be public and prior, and recorded in a register.

2. The argument is much less powerful in relation to ordinary MPs. There are relatively few occasions in which an ordinary MP can secretly procure advantages for “influential individuals or organisations” who might want to “pay off” the MP. I think the rule should be that MPs must disclosure their connection if and when there is some matter on which they are involved, that concerns the individual or organisation.

I favour strong sanctions for failure to make an informative disclosure of any potential conflict of interest.

But to try to require routine registration of dealings would be likely to have four effects:

(a) Involve a numbing recitation of irrelevant detail by law abiding careful folk.

(b) Catch some “innocents” sooner or later with inadvertent non-disclosure, particularly where a connection or interest arises after the specified filing times.

(c) Non-disclosure by crooks. They will just route the “dealings” through family members or some other disguise.

(d) Inevitably the rules grow in an attempt to block perceived loop holes. If they become a cumbersome set of obligations active business people will be further dissuaded from getting involved in politics. They could not be bothered with the trivia and the prurient and envious use to which the register would be put, when it should really be aimed at corruption.

My approach to most of these corruption matters is to have proper enforcement of real penalties when corruption is uncovered rather than potentially futile procedural fences at the tops of cliffs.

REPLY, Wayne Mapp, Nat.

1. Yes, in fact this is a current requirement where an MP is considering legislation in which it could be said that there is a conflict of interest, or a benefit to the MP as a result of the legislation.

2. Yes, the current rules requires full disclosure of interests given the wide range of issues that Ministers consider.

3.Resignation should be the automatic result of “purchasing access”.

REPLY, Phil Goff, Lab.

Very clear and stringent rules about Minister’s conduct and conflict of interest exist and are spelled out in the Cabinet Office Manual. The Manual is available at:

www.dpmc.govt.nz/cabinet/ manual/index.html

The Government proposes to introduce disclosure of interest rules for all MPs.

REPLY, Rod Donald, Green

1. Yes, and once the register of interests of members of parliament is established then any such interest will be publicly declared. Such a register already operates for cabinet ministers and all members of parliament are already required under Standing orders (165) to declare any pecuniary interests i.e. direct financial benefit that might accrue as a result of the outcome of parliament’s consideration of a particular item of business to either the member personally or any trust, company or other business entity in which the member holds an appreciable interest.

2. Yes. In addition to the requirements under standing Order No. 165, any such interest is already required to be publicly declared under the registration of interests for Cabinet Ministers which requires disclosure of remunerated directorships or employment and substantial minority or controlling interests in a business enterprise or professional practice (with a description of the business activity unless the business concerned is listed as a public company), minority ownership of company shares or beneficial interests in a trust (excluding a registered superannuation scheme), ownership of all real property, holding of mortgage or debt instruments, liabilities indicating the nature of the liability and the identity of the creditor, overseas travel or accommodation (unless paid for personally or by immediate family members or from NZ public funds or by another Government as an adjunct to an official parliament visit), gifts received that have an estimated value of over NZ$500 per gift, payments received from any outside activities and liabilities of the member discharged by a third party.

3. Yes. The rules on non compliance in relation to disclosure of interests are well established. Non compliance is addressed by way of publicity and political sanction, a report by the controller and auditor general and contempt of the House. Failure to declare a pecuniary interest in relation to parliament’s consideration of a particular item of business also results in contempt of the House. The Clerk of the House is the authority to which any such incidences should be reported.