The negative reaction against those ministers and ex-ministers who have been revealed as having misspent taxpayer money with their ministerial credit cards appears to be almost unanimous. This is a good thing – increasingly, the public is learning of the culture of entitlement and extravagance that exists within the Beehive, and hence the vast gulf between the politicians and the rest of us is becoming more obvious. Clearly, the media is doing a relatively good job of holding our representatives to account by exposing the dodgy political financial affairs of our ministers to the disinfectant of sunlight. Yet there are still some voices complaining about the scrutiny being applied to New Zealand’s elite. And although the objection to the scrutiny is mostly coming from the politicians themselves, it’s also coming from a number of outside commentators, party officials, academics, and Establishment types. In order to defend the ‘political class’, these voices are putting themselves up as apologists for the behaviour of our politicians. The following blog posts examine the numerous arguments of those apologists and politicians, and attempts to refute their justifications and excuses for the ministerial misspending. [Read more below]
Often politicians have simply insisted that what might appear outrageous or wrong to the public is clearly not simply because ‘it was within the rules’. For example, while staying at the Square hotel in Copenhagen Tim Groser ran up a mini-bar bill of $466, ‘including five $92 bottles of Famous Grouse whisky, a bottle of Remy Martin cognac and a $55 bottle of Jim Beam’. He then justified his spending as being ‘squarely within’ the rules.
Prime Minister John Key has backed him up, saying: ‘Don’t be too hard’ on the errant politicians. Key has said, ‘Obviously ministers have the right to have a drink from their mini-bar, and I don't think most people would criticise them for that’. Similarly, Foreign Affairs Minister Murray McCully has hit out at what he called the ‘media sensationalism’ about foreign and trade ministers' expenses and complained that the scrutiny was ‘not helpful’.
Previously the Prime Minister has shown extreme softness towards the ministerial culture of entitlement. In April he admonished journalists for highlighting politicians’ use of taxpayer-funded perks that fall within the law. He essentially said that even when the media doesn’t like the rules about such perks they shouldn’t make a big deal of them because, ‘actually, that is a legitimate part of the contract MPs have. It might be outdated ... but nevertheless it's there’. Furthermore, he stated, ‘I think, in defence of both MPs and ministers, that the media do need to think a little about what is legitimate spending within the rules even if they don't like the rules, vis a vis someone breaking the law’.
Similarly, Parliament’s Speaker, Lockwood Smith has been somewhat of an apologist for politician expenditure. Outrageously, he even threatened last year to deregister those political journalists from the Press Gallery if they continued to pursue stories about MP spending too aggressively. Smith apparently thought that by being so critical, these journalists should be deemed ‘lobbyists’ rather than journalists.
It’s also important to reinforce that ‘being within the rules’ is not always an acceptable justification, even if it’s true. We saw in the British MP expenses scandal that this excuse did not hold water with the public – and it shouldn’t do so here either. As I’ve blogged about before, it is false to simply assume in issues of political finance that legal=legitimate. It is possible that ministers’ use of parliamentary funding is totally legal while not actually being legitimate. Although this might sound oxymoronic, in the academic area of political corruption there is a strong distinction between what is legal and what is legitimate. Often politicians can be undertaking corrupt activities that they pass laws to make legal, but this doesn’t mean those activities are legitimate. The best definition of ‘political corruption’, therefore, according to such scholars is that it is that which ‘the public deems inappropriate’ rather than what fits into the laws made by the politicians themselves. Thus it is possible that Tim Groser’s use of hotel mini-bars or Judith Tizard’s purchase of $155 bottles of champagne are totally legal while not actually being legitimate. So in these cases the public is likely to judge the various ministers’ extravagant expenditure to be a rort and illegitimate, and this is entirely appropriate regardless of the law.
Of course, much of what is being claimed as ‘within the rules’ quite possibly is actually not. If you look at the regulations (PDF here) defining what allowable ministerial travel expenses are you see that it says that ‘The principle that expenditure must be for official ministerial purposes only’ and ‘Expenditure must only be incurred in respect of ministerial business’. So if you take the Tim Groser example, it seems highly unlikely that you could say that the minibar bill of $466 is any more of an incidental travel expense than a pay-per-view hotel video. As one blog commentator, ‘Bright Red’ has correctly said, the politicians ‘have to pay personally for drinks consumed while travelling but not directly part of their official duties’, and thus ‘Groser’s nightly night cap is not an expense that he is incurring because of his official business. He would be paying that regardless of where he is’.
Jim Anderton’s defence of his own misspending has involved the invoking not so much of the ‘it was in the rules’ argument but that ‘common sense says that it should effectively be in the rules’. He says that politicians should be able to use their ministerial credit cards for personal items as long as they reimburse the expenditure:
Be sensible about this - these corporate cards pay for the hotel and all the things attached to them. It's just silly to think you're going to carry a number of cards and pay for this on one and that on another.
This has been dealt with by a number of people. Guyon Espinser said this on Q+A:
One of the most extraordinary comments I've heard in this whole thing was from Jim Anderton who said you can't expect people to carry around separate cards and put some spending on this and some spending on that. Well hullo - isn't that what anyone who travels with a corporate credit card does. If it's personal business it goes on your own card, if it's work business it goes on the company card. I would have thought that for some very intelligent ministers, would have been a pretty easy bright line to draw.
Mita Ririnui has gone one further and said that although his own spending wasn’t within the official rules, he had been informed by Ministerial Services that the unofficial rules were that he could do what he did. Unfortunately Ministerial Services have also been remarkably silent over the issue of what exactly the rules allow. They haven’t come into the public debate to confirm or deny much of the contradictory information that is being said about their role, decisions, and enforcement, except to contradict Mita Ririnui when he said that Ministerial Services had told him it was OK to use his word credit card for personal items. Ministerial Services seem to be largely hiding from the debate on the justification that the Auditor-General is investigating all the details and will resolve any problems. This is convenient for them, but hardly satisfactory for the public trying to sort out the inconsistent information they are being given – especially when government ministers say that their expenditure has been within the rules. The Auditor-General’s report is several months away – due in September – yet the Ministerial Services spokesperson, Allen Walley, unhelpfully just says, ‘When it comes back it will inform any changes to the rules’.
More recently, the chief executive of Internal Affairs, Brendan Boyle, has spoken to the media but hardly clarified much, except to defend his department and say that Ministerial Services had itself followed the rules: ‘I am comfortable that has been done according to the rules and what was expected of Ministerial Services’. Furthermore, ‘The handbook is very clear and ministers when they are issued with a credit card actually sign up to that. The handbook is clear - it says emergency expenditure is acceptable but it has to be paid back as soon as possible.’
One of the best commentaries against the excuse of ‘It was within the rules’ comes from legal expert and blogger, Graeme Edgeler, who has published a useful legal opinion about the unlawfulness of the misspending. He says shows that ‘if that spending is not "incurred in respect of ministerial business", it will be outside the scope of the appropriation, and illegal’. Thus, ‘That's why this is this a big deal. It's illegal. And not only is it illegal, those involved can face criminal consequences: even if they intended to – and did – pay it back immediately’. He ends his blog post strongly by saying:
I'm not particularly inclined to give any of them the benefit of the doubt: "It wasn't clear I was entitled to it, so I took it anyway" is a pathetic excuse. We're probably too late for the most egregious abuses, but ministers and MPs should consider themselves on notice. It doesn't just look bad on the front page of the newspaper: improper use of a ministerial credit card is illegal, and it is an offence punishable by imprisonment.Of course in the area of political finance, resorting to the use of the law to determine the rightness of political activity is not often helpful. Yet that is exactly what these politicians are doing when they justify their actions with the line that their expenditure was 'within the rules' - and with that in mind, such politicians might well find that they are judged along criminal lines.
