Stuff: The curse of cosyism in public life is hurting us all

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Cosyism: a new word for one of the most chronic problems in New Zealand public life. We are largely spared, thankfully, the envelopes-stuffed-with-cash corruption that infects other countries. But we’re suffused with overly close relationships: nepotism, jobs for the boys, all that jazz.

Some call it cronyism, but that doesn’t quite fit here: “cronies” sound too much like Mafia hitmen. “Cosyism” better describes those insidious processes by which public positions, jobs and contracts sometimes go not to the best-qualified applicants but to the friends, contacts and family members of people in power. It’s an apt term for a famously small society in which cousins and mates are always – cosily – rubbing up against each other in public life.

Cosyism isn’t solely an injustice to the well-qualified but poorly connected people who lose out; it can cost us all, since the winners – the well-connected but poorly qualified – often do bad work, expensively.

A cosy society also tolerates the most colossal conflicts of interest: situations where power-holders’ decisions could be biased by a personal incentive, be it to protect a business connection or aid a relative. Even just a public perception of bias can be harmful, corroding trust and promoting political disengagement.

Here’s a cosy example: the head of the Film Commission, David Strong, was earlier this year revealed to have a show in development with Great Southern – a production company that bids for funds administered by the commission. Strong declared this conflict upfront but, given his obvious interest in the firm’s success, how could junior commission staff feel comfortable saying no to it? Under intense pressure, Strong eventually quit, but this conflict shouldn’t have been tolerated for a moment.

Another example: last year, the Reserve Bank thought it was a bright idea to hire as a contractor, and then appoint to its board, Roger Findlay, the chairman of NZ Post, which then owned Kiwibank – one of the institutions the Reserve Bank is supposed to regulate. Findlay’s term at NZ Post has since expired – but again, how could this conflict ever have been allowed?

In politics, cosyism has a long and undistinguished history. In 2013, Paula Bennett appointed a new families commissioner, Belinda Milnes – the sister of Bennett’s Cabinet colleague Amy Adams.

Last term, NZ First MP Shane Jones was a walking conflict of interest, once even contacting the New Zealand Transport Agency about a case it was taking against a relative. More recently, according to reports, National MP Mark Mitchell found his sister a job in his electorate office.

The latest conflict-of-interest accusations concern minister Nanaia Mahuta and the nearly $200,000 in contracts awarded to her husband and his family by ministries where she had at least associate responsibility. These contracts are now – at her instigation – being examined by the Public Service Commission.

Mahuta seems to have done what’s currently required, declaring the conflicts of interest and taking no part in the contract decisions. But two agencies, Kāinga Ora and the Ministry for the Environment, have already acknowledged major mistakes – including the failure to even realise there were conflicts of interest when hiring the associate minister’s husband.

No doubt the agencies will improve their protocols, at least to meet current standards. But given what they allow, are those standards fit for purpose? Could any public servant, in any department, deal confidently with a contractor – including, if necessary, rejecting substandard work – if they knew the latter were the minister’s relative?

What, too, about the advantageous information a minister could convey to their contractor relative? There may be no reason to doubt the integrity of current ministers, but that’s not the point. We must design systems for the most corrupt actors, not the least.

Some people respond to such problems with a shrug: in a small society, they say, these conflicts are inevitable. But that’s back-to-front: we have to be tougher on these problems precisely because we’re a small society, and they will crop up so often.

The current default is to “manage” a conflict of interest by leaving the room, sometimes literally, when a particular issue is discussed – as if this removes every opportunity to influence the decision. That default needs to change.

By and large, we shouldn’t manage conflicts of interest, we should avoid them. If you want to run a government agency, for instance, you just have to ditch your contract with the firm the agency regulates. Or they hire someone else.

Remember there are four million adults in this country, albeit many are held back by poverty and discrimination. By fighting those forces, we could create a talent pipeline that feeds a wider pool of applicants, and lets recruiters cast their nets further.

A cosyism crackdown would, of course, be hard on some people. Too bad. That’s the price we pay for probity, and for public faith in our institutions.