Opinion: The triumph of the lobbies — Australia’s revolving door and democracy

By Binoy Kampmark

Thursday February 18, 2021

revolving door
Both employ people. Both have hierarchies. But is that all there is to it? (pressmaster/Adobe)

The revolving door of politics, public administration and the private sector has become a well-greased, operating outfit in Australia. Former bureaucrats, public service officials and elected representatives rarely struggle with the conflict of interest issues that arise when lobby groups recruit them. In some cases, the water flows the other way: those in the private sector find employment in government with a remit that covers companies that they, at some point or rather, worked for.

The revolving door has its defenders. Those skilled in government should be tapped on retirement or leaving office. Knowledge of the inner workings of state can be valuable to private sector companies and NGOs keen to strike up deals. James Hasik of the Centre for Government Contracting at George Mason University is one, taking issue with efforts such as those by US Democratic Senator Elizabeth Warren and House Representative Jackie Speier to shut the revolving door between the defence industry and government. Doing so, he argues, would stifle innovation in the Pentagon and lend itself to “miscommunication” between defence contractors and the government. “And whatever these two legislators’ indignation about occasional abuses, building barriers between suppliers and customers is frankly no way to do business”.

Such advocates often insist that any conflict of interest can be neutralised, or at least moderated by cooling-off periods where the person in question is barred from providing services to the lobby group for designated period. The expiry of time would render the knowledge less sensitive.

Such a focus tends to leave accountable governance and democratic practice sulking in the corner while distorting the marketplace and economy. “The revolving door,” claim Craig Holman and Caralyn Esser of the non-profit consumer advocacy organisation Public Citizen, “muddies the mandate of public officials, overlapping it with special and personal interests.” Even more strikingly, it has been shown that the practice does not necessarily lead to improved market performance. As far back as 1991, a study of 3,815 officers in the top 200 US firmed revealed little by way of support for it, while the idea of market distortion found some merit.

In Australia, the greased revolving door has become something of a norm across a range of industries. In the fields of defence and security, former officials and public figures move with seamless ease into highly paid positions without a murmur of concern that a conflict of interest might be taking place. Those such as the able and recognised scientist Dr Tony Lindsay, formerly Chief of National Security Intelligence, Surveillance and Reconnaissance Division in Defence, Science and Technology, left on October 28, 2016 only to work for Lockheed Martin.

This was not all: a mere few days passed before Lindsay found himself as a director of the newly established STELaRLab, the company’s first R&D lab outside the United States. At the time, Michelle Fahy of Michael West Media remarked that the decision was “a good example of how the revolving door between the public sector and military-related private industry in Australia is being facilitated by both sides.”

Another figure who happily moved across is former defence minister Christopher Pyne. Within nine days of leaving politics in 2019, he was hired as a consultant by the accounting and advisory firm EY. He took care to avoid such suggestive words as “lobbyist” in announcing the decision. “I’m looking forward to providing strategic advice to EY,” he told The Australian, “as the firm looks to expand its footprint in the defence industry.” Rather glaringly, the engagement with EY did not necessarily constitute a conflict of interest as the company was not, strictly speaking, a lobbying firm.

The latest outstanding example, and one under reported, is the case of Nick Warner. Warner concluded his term as the first Director-General of the Office of National Intelligence last December. Periods were also spent as Director-General of the Australian Secret Intelligence Service (ASIS) and secretary of the Department of Defence. His resume also heavy with foreign service engagements: ambassador to Iran, high commissioner to Papua New Guinea, and special coordinator of the Regional Assistance Mission to Solomon Islands.

Warner’s case is particularly startling given that he is simultaneously retaining consultancy roles in both government and the private sector. Recently, he took a position rather extravagantly called “counsellor” at the Melbourne-based advisory firm Dragoman. The company prides itself on “building competitive advantage” for its clients utilising “[e]xtensive global expertise in policy, commerce and politics.” The focus of the company is global, though it emphasises projects with an “alignment with Australia’s national interest.” This month, it was revealed in The Australian that Dragoman was retained by Naval Group, the French company responsible for developing the now troubled Attack-class submarines, to do a repair job on its increasingly tattered image.

A note should also be made of the personnel at the firm. Dragoman’s managing director and only publicly declared lobbyist is former Liberal Party vice-president Tom Harley. To add more intense flavour to revolving door interactions is the chairman of counsellors: former Howard Defence minister Robert Hill.

Warner’s new role at Dragoman is not all that sparks interest. The Canberra security and intelligence veteran, as revealed by the ABC, began receiving fees for consultancy services to the Department of Prime Minister and Cabinet (PM&C) in January this year. On February 12, AusTender disclosed in a contract notice with Nick Warner and Associates Pty Ltd that the arrangement entailed a one-year contract amounting to $220,000 for “strategic advice and review services”. Questions posed by the national broadcaster to Harley, Warner and Dragoman on potential conflicts of interests have been ignored. Deputy Prime Minister Mick McCormack sees little reason to fuss over the issue, given that “any potential conflicts of interests with the new positions” had already been declared.

The circumstances of Warner’s employment furnish a test case for politicians and public officials. Parliamentarians, no doubt mindful of any future employment and engagement in various industries, have chosen, for the most part, to avoid the issue.

One exception is federal Labor MP Julian Hill, deputy chair of Parliament’s Joint Committee of Public Accounts and Audit. “The Prime Minister’s got some serious questions to answer about this whole arrangement.” It was not clear to him what work Warner was engaged in “and how and if conflicts of interest are being managed”. A man with “access to the most privileged secrets of Australia, more than most ministers would ever get” had concluded his tenure in the public sector, only to now work for “a lobbying firm whilst separately contracted by the Prime Minister.” For the likes of Hasik, a sound business proposition, even if moderately corrupt.

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