Tackling the culture of dishonesty in Wellington re three waters (update to Three Waters campaign supporers)

Thank you again for supporting the fight against Nanaia Mahuta’s Three Waters proposals. Further to Peter Williams’ (no relation!) note last week, I’m emailing to ask for your feedback on a matter we have been thinking about for some time. This email is longer than usual, but we think you'll agree it needs to be for what we're considering.

First though, in case you missed it, our formal submission to the Select Committee on the Three Waters "Water Entities Bill" is here. This emaiL concerns the legal opinion appended to that submission – you may have heard our lawyer interviewed this morning on "Today FM", and the media release summarising the opinion is copied at the end of this email.

Background

Since David Farrar and I co-founded the Taxpayers’ Union in 2013, we have noticed growing public sector tolerance of dishonesty. There has always been some expectation of manipulation and ‘spin’ in the media. But we could expect Ministerial advisers and contracted professionals to maintain their own standards. At the least, they would stay silent when Ministers were being “political”. Now it seems agencies and public servants feel compelled to collude in lying.

In the context of the Three Waters campaign, we’ve seen an unprofessional approach in the way people who ought to know better perpetrated and repeated some Minister’s claims about Three Waters. We have long been worried that they’ve seemed untrue (or at the very least, calculated to be misleading). Take two examples:

• the lie that councils will continue to “own” the assets under Three Waters; and
• the way councils were consulted in relation to the Three Waters (being asked to participate in the Government’s consultation by officials from the Department of Internal Affairs when those very officials would have been involved in the process preparing Nanaia Mahuta’s Cabinet Paper which had already been through Cabinet and covering the very same matters DIA was asking for feedback on!)

Why is there more tolerance for dishonesty and unprofessional conduct in our public bodies?

Public service professional standards of honesty and integrity have traditionally relied on the State Services Commissioner (now the "Public Service Commissioner") to maintain. We fear, however, that the Public Services Commission has deteriorated just as much as the public sector agencies it is set up to monitor. We have not seen it effectively disciplining agencies which have been dishonest or used public money for political advertising campaigns (NZTA, for example).

So in that context I asked lawyers Brigitte Morten and Stephen Franks for an opinion on Minister Mahuta’s false claims about Three Waters reforms. 

We wanted a strict legal opinion on whether minister Mahuta was in breach of the Fair Trading Act and securities legislation regarding the claims she was making about councils owning “shares” in the Three Waters assets – i.e. would she be a crook if this was the context of a share offer to the public?

The lawyers don't pull punches: Ministers have hoodwinked the public on 'ownership' claims

The opinion we got back, which has also been peer reviewed by a Queen's Counsel, is probably the most damning legal opinion I have ever read. It concludes that Minister Mahuta's claims regarding ownership have been "calculated to deceive Parliamentarians, and when it becomes law, to deceive New Zealanders generally".

The legal opinion is very detailed, but it is not hard to understand. It calls the claims of retention of local ownership "false, misleading and deceptive" as "councils are expressly denied the rights of possession, control, derivation of benefits, and disposition that are the defining attributes of ownership". Gary Judd QC comments in his review of the legal opinion: "When all the lying statements are put together, as [the] opinion does, the government’s effrontery is breath-taking."

While the opinion says the Minister can’t be prosecuted for criminal wrongdoing because her comments were not made "in trade" it hadn’t occurred to us that those party to Ministers’ false assurance could potentially be liable and held to account. 

Most notably they raise the possibility that culpability could reach any professional advisors on the Ministers "Governance Working Group" on three waters governance, and the council's lobby group (that sold out to the Government), Local Government New Zealand. 

In my experience, lawyers usually hedge their bets and understate wrongdoing. But that isn’t the case here. The lawyers think there is a clear breach of not only the usual standards of honesty and fair dealing, but of the law. Have a read of the opinion and judge for yourself.

So where to from here?

So we want you feedback. We’ve taken the first step and informed the Commerce Commission (our lawyer's letter is here).

If the Commerce Commission don’t act promptly, should we seek advice on the steps on a private prosecution? That would be a big trigger to pull – it would likely send shockwaves through Wellington (in the best possible way). But how else can we STOP the dishonesty, force the Government (or at least those working for it) to acknowledge that Three Waters is an asset grab – that council’s won’t “own” the assets in any meaningful way?

Most importantly how do we re-establish expectation that public servants’ statements are truthful in the old-fashioned sense – that they will not allow themselves to be misused to deceive, by omission or commission?

For the politicians, the task of keeping them honest rests at the ballot box – but our democracy relies on a professional public service that is truthful and enjoys the confidence of all New Zealanders as straight shooters. That can mean 'free and frank' advice to Ministers, and telling them things they don't want to hear. We cannot let it stand that the bureaucracy are playing politics and joining hands in political and legal deceptions on the public. 

So have a read of the opinion, let us know your thoughts, and I will ensure each and every reply is read as we work out where to from here.

Thank you for your support.