Peace, order and good government…

10 August 2011

Whatever the precipitating event, the breakdown of order in a number of English cities over the last few days must reflect a failure of good government. It seems improbable that any community that has confidence in the proper exercise of the power of the state will tolerate its young men attacking the infrastructure of that community. Societies which have trust and confidence in agencies of government do not engage in the rioting, theft and arson reported by the British media.

State servants must be conscious always of the importance of the spirit of service.  It is the fair, impartial, responsible and trustworthy exercise of official functions which strengthens social commitment and participation. Orderly and contented communities reflect good government  Burning bits of Britain demonstrate what may otherwise happen.  In Norway the disaffection of one man had a devastating effect, but Norwegians appeared to coalesce in the face of the attack.  In contrast, Britons do not seem to be united in the face of the assault on their communities. 

The causes of the English social meltdown will receive much attention over the next few months.  Inevitably research will be found that predicted trouble but was disregarded.   One source that did not forecast any breakdown of law and order is the Peace Index.  In 2010 the UK was rated in 36th place on the World Peace Index. The 2011 Index published in May dramatically reassessed that position. UK moved up to 14th place.  This continued an improvement from the 2007 and 2008 indexes when the UK was in 49th place.  These assessments are based on a range of values . Ironically, considering the English experience, major characteristics are the absence of conflict, the rejection of violence and the promotion of dialogue. Perhaps the UK score reflected responses in Scotland, Wales and Northern Ireland!

New Zealand which was in top spot in the 2010 Index slipped this year to second place behind Iceland. New Zealand has always been in the top 4 places since the Peace Index was first published in 2006.  The results cover 153 countries, which encompass 99% of the world’s population.

www.bbc.co.uk/news/uk-14452097

www.visionofhumanity.org/wp-content/uploads/2011/05/2011-GPI-Results-Report-Final.pdf

www.visionofhumanity.org/gpi-data/#/2011/scor

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August 10, 2011

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Irish eyes on white collar crime

9 August 2011

The feisty celtic tiger, lauded as the exemplar of economic success at the turn of the millennium, is a much mauled beast now.  It is only the punt away from being among the PIGS.  The optimism of 2005 is long gone. What the Irish have learned is that unregulated or poorly enforced markets incite opportunism. That leads to exploitation. Too often, corruption has proved to be a close companion.

The roll call of political and business leaders convicted over the last five years is a national embarrassment.  The Garda has an ongoing case load of 200 fraud enquiries, reflecting the 5% average cost to each Irish business of fraud. Greed got the better of ethics in the banking, property and legal sectors, as officials turned a convenient, and often well rewarded, blind eye. And a church-load of paedophilac priests seemed to emphasise the demise of values.

The state is now fighting back. Politicians have been compelled by public disgust to legislate against white collar crime. Business people knowing anything about fraud will have to do something about it. For example the commercial response in many jurisdictions of quietly paying off fraudsters on the basis they will fade away, is no longer an option in Ireland.

The Criminal Justice Act 2011 comes into force today. It is now an offence to not report to the police any information that might be useful in preventing, investigating or prosecuting white-collar crime. The Act will impact on banking, finance, company law, money laundering, fraud, bribery, corruption, and consumer protection.  From drivers to directors, all will commit an offence where information is withheld with  “consent or connivance” or through “wilful neglect”. The penalty is up to five years imprisonment, an unlimited fine, or both.  This is more stringent than examples of  “withholding information” offences in other countries.  New Zealand of course has almost no statutory requirements to report criminal conduct.

Complementing the Irish legislation is another new law that will assist juries understand the complexities of a fraud trial. Expert explanations of evidence will be provided to them. Transcripts of evidence and the judge’s summing up will be given to jurors also when considering their verdict.

Ireland, sitting at 14th place on the Transparency International corruption perceptions index will be hoping these forensic tools for prosecutors will help counter the reputation it has acquired as the wild west of European business.

www.irishtimes.com/newspaper/opinion/2011/0808/1224302023351.html

www.accountancyireland.ie/Archive/2007/December-2007/Reducing-Fraud-A-Programme-That-Will-Deliver-Benefits-on-the-Bottom-Line-/

www.belfasttelegraph.co.uk/news/local-national/republic-of-ireland/fraud-juries-to-get-transcripts-16031744.html

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August 9, 2011

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Phone hacking continues to fester

8 August 2011

State servants are employed to serve their agency chief executive with integrity.  That means being fair, impartial, responsible and trustworthy.  The chief executive of the agency has the statutory duty to serve the responsible Minister (or in the case of Crown entities, serve the Board of the entity, which in turn serves the  Minister) with  loyalty and professionalism.

What is being uncovered with the media focus in Britain on  the News of the World and related phone hacking matters, is that the expected pattern of professionalism and loyalty has been corrupted. Officials appear not to have been acting with integrity.  In too many activities identified to date, there has been a failure to recognise, disclose and declare conflict of interests.   It appears increasingly likely that regardless of code of conduct obligations, there has been a disregard for the principal of openness. Good government is built on transparency.  But the British Government is in strife because of underhand processes by officials who, at this stage, seem to have rationalised their deceit with notions that their actions were harmless.

In a concerning critique of the trustworthiness of UK Government agencies, the Independent  reported yesterday on investigations carried out to confirm the character of Andy Coulson,  the former News of the World editor, when appointed as a Prime Ministerial adviser.  Investigations were commissioned to assess  his suitability to carry out such work.  What is being disclosed is that the checks departed from any manifestation of the spirit of service.  The specifics remain vague but it appears that the clearance assessment was carried out by a contractor, not by an agency vetting-professional.  That contractor had previously undertaken work for the News of the World.  An inference is that the contractor failed to declare conflicting activities and interests, and that the commissioning agency failed to demand openness from him.  The Secretary to the Cabinet’s observation seems somewhat lame, that “the purpose of security vetting, … is about access to information not suitability for a job”.

And on a connected note, the Al Capone principle has continuing currency.  The Guardian has reported that British tax authorities are opening an investigation into the senior police officers paid for giving information to News of the World.  The payments, not disclosed to the Metropolitan Police as the employing agency, were not declared for tax purposes either. That may have greater implications for the officers than the deceit, breach of duty and disregard for the relevant code of conduct involved in not being open about the payments at the time of receipt.

www.independent.co.uk/news/uk/crime/andy-coulson-vetted-by-investigator-linked-to-news-international-2333257.html

www.guardian.co.uk/uk/2011/aug/05/hacking-police-fees-investigated-tax

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August 8, 2011

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Does UNCAC make any difference?

5 August 2011

United States diplomatic muscle has been used to cajole membership of the UN Convention Against Corruption.  In itself this is admirable.  There is no greater benefit to the United States than to the countries that commit themselves to fighting this fundamental constraint on good government.  Vanuatu has become the latest member state.  That puts it among interesting  company.  The other 154 signatories include some vary dubious anti-corruption champions – Afghanistan, Iraq, Zimbabwe and the Russian Federation.

The convention has poor penetration in the Pacific.  Vanuatu, acceding in July 2011, became only the fifth Pacific member state. Australia, Timor Leste, Fiji and Papua New Guinea are the others.  Contemporaneously with the announcement about Vanuatu is a report on Papua New Guinea.  Described as one of the saddest states,  Radio New Zealand reports that a formal assessment later this year of compliance with the convention will mean “a few embarrassed faces”.

New Zealand finds itself among the two dozen nations that have yet to confirm membership of the convention. A few hold out as a matter of principle like New Zealand – Japan, Germany, Ireland and the Czech Republic (all of which are parties to the OECD Convention Against the Bribery of Foreign Officials). Most of the small Pacific jurisdictions have other priorities, and the international misfit states like Myanmar, Sudan, Cote d’Ivoire and Syria probably don’t care.

There seems to be very little correlation between perceived levels of corruption as indexed by Transparency International in the annual CPI  and membership of UNCAC.

The United States enthusiasm for UNCAC is interesting when compared with some other meritorious international conventions.  For example the United States and Somalia (joined now by South Sudan) are the only states not to have ratified, or acceded to, the UN Convention on the Rights of the Child.

www.radioaustralia.net.au/pacbeat/stories/201108/s3283745.htm

www.rnzi.com/pages/news.php?op=read&id=62194

www.unodc.org/unodc/en/treaties/CAC/signatories.htmlwww.stuff.co.nz/business/4274052/NZ-still-one-of-least-corrupt-countries

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August 5, 2011

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Pot calling the kettle black…

4 August 2011

Whether it is a matter of pots and kettles or specks and moats, the Washington Times yesterday  featured a vituperative article about the likelihood of former Illinois Governor Blagojevich, convicted on numerous corruption charges, avoiding a substantial prison sentence.  The Washington Times, owned by News International, has not been a champion of imprisonment for staff on its UK sister paper, responsible for gathering stories through deceit and phone hacking.

Although Blagojevich could be jailed for up to 300 years, the probability is a sentence of fewer than 10 years. Described as the poster boy for everything that is wrong with politics in the United States, the suggestion is that his ‘raping, pillaging, and plundering of public trust’ makes him totally unfit to hold public office.

In what must be unintended irony, the claim is that political scoundrels should get the maximum sentence for any crime they commit; they should be held to the highest standards of conduct and the highest levels of justice. There should be no mitigating circumstances for political corruption. Bernie Madoff is destined to eternal life in prison.  He conned people who should have known better. But, he did not violate the public trust. With a lack of charity characteristic of campaigning journalism,  the article advocates “no pity, no mercy, and no humanity.”

Should a State servant adopt that attitude? What is the fair, impartial, responsible and trustworthy response to an opportunist, purportedly motivated by the common good, but actually the antithesis of the spirit of service? How do you treat a renegade who rejects your code of conduct?

A focus on the right way too readily leads to righteousness. This week’s Ethics Newsline suggested a way out of this “ethics trap” – of  moralising and assertions of rectitude. “Genuine ethics requires humility and grace as much as honesty and responsibility.  Standing for truth counts for a lot, but so does listening for truth.”

A sense of proportion and recognition that we all have feet of clay is a good start. But integrity and transparency are needed to make a difference. They are the essence of the rule of law, respect for the democratic process and the spirit of service. And that is what good government is all about.

http://communities.washingtontimes.com/neighborhood/middle-class-guy/2011/aug/2/rod-blagojevich-may-get-easy-while-others-rot-pris/

www.globalethics.org/newsline/2011/08/01/the-ethics-trap/

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August 4, 2011

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High speed, low responsibility?

3 August 2011

The State Services code of conduct imposes an obligation on everyone working in agencies to do nothing that harms the reputation of their agency. –“We must avoid any activities, work or non-work, that may harm the reputation of our organisation or of the State services”. This means that some things done out of the work setting may breach the code.  This is a murky area.  But it is just as murky in employment law. All employers are concerned about their reputation and regard activities that harm that reputation as punishable misconduct.

The explanation in Understanding the code of conduct: Guidance for State Servants is that … “As a general principle, what we do in our personal lives is of no concern to our organisation unless it interferes with our work performance or reflects badly on the integrity or standing of the State Services. …We must avoid being connected publicly with behaviour that creates a sense of public disquiet, and that, implicitly, diminishes trust in the State Services.  Involvement in some personal activities, including unlawful behaviour or incidents involving a breach of trust, is likely to bring our organisation into disrepute.”

Unlawful behaviour then tips the balance.  But what about lawful activities?  In the last few years there have been incidents involving agency employees engaging in prostitution in their spare time. Media reaction suggests that greater disrepute flows from that lawful activity than convictions for traffic offences and tax evasion.  The news yesterday of a senior Auckland Police officer being convicted of speeding puts a focus on the relationship between offending, the seniority of the offender and the role of the agency.  The general test is that an official  who contravenes legislation enforced by their employing agency, harms the reputation of that agency.  Inland Revenue staff must pay their tax and fisheries officers  must ensure they throw back any undersize catch. And reflecting another incident reported yesterday, commanding officers of naval vessels must be exemplary in their behaviour.   Police officers are particularly “vulnerable”.

The media report about the speeding officer, coincidentally filmed by a television crew in the intercepting patrol car, is that no breach of the Police code of conduct occurred. By implication the seniority of the officer and the conviction won’t harm the reputation of the Police.  Possibly that is what most New Zealanders would think.  But are the surrounding circumstances troubling?  The officer was speeding in his official car.  Though on leave and with a civilian in the car, he is alleged to have made a claim to being on a covert activity, unknown to any others. He sought to be treated differently because he was a Police officer.  The reality is that senior State servants are different from others in the community. Higher standards are required of them. More particularly, the expectation is for integrity. Leaders are required to model behaviour that is fair, impartial, responsible and trustworthy.

www.stuff.co.nz/national/5379108/8000-bill-after-top-cop-fights-fine

www.ssc.govt.nz/sites/all/files/Understanding-the-Code-of-Conduct-April2010.pdf

www.bellgully.com/resources/resource.01454.asp

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August 3, 2011

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Uniformly well regarded

2 August 2011

New Zealanders  have confidence in a uniform. This is shown in a range of surveys where respondents indicate much higher levels of trust in firefighters, rescue workers, police,  nurses and the military than in most other occupations – and dramatically more confidence than they have in politicians and the media.

This may reflect admiration for the risky nature of these roles.  We see these workers in life and death situations.  They face higher stakes than many of us. When things go wrong, they can do so dramatically.  The Independent Police Conduct Authority investigates the situations when policing has gone wrong. Instances where suspected offenders are shot, die in pursuit-related car crashes, or are roughly subdued where there is public disorder could well diminish public trust. But they seem to have minimal influence. The public wants to believe in the Police commitment to the community.

There is widespread capability to upset this belief if it is unfounded. Almost everyone seems to have a camera on their cell phone. Poor policing would inevitably be filmed and, in no time, feature on You Tube. Badly behaved cops would inevitably gain an online notoriety. But it doesn’t happen.

In some parts of the United States where polarised policing reflects polarised societies, filming police at work is prohibited.  Video footage seems to be unwelcome if it discloses police violence.

A web article comments that “in at least three states, it is illegal to record any on-duty police officer, even if the encounter involves you and may be necessary to your defense, and even if the recording is on a public street where no expectation of privacy exists. …Illinois, Massachusetts and Maryland are among the 12 states where all parties must consent for a recording to be legal. Since the police do not consent, the camera-wielder can be arrested and charged with a felony.”  This seems seems a strange restriction in the land of the free…

www.police.govt.nz/news/release/25957.html

www.ipca.govt.nz/

www.alternet.org/story/151806/15_years_in_prison_for_taping_the_cops_how_eavesdropping_laws_are_taking_away_our_best_defense_against_police_brutality/

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August 2, 2011

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Being ethical is being business-like

1 August 2011

The role of State sector agencies is to support executive government.  Their function is to implement law and policy for government.  Perversely in some cases, supporting executive government means ensuring that activities are carried out independently of Ministers or are explicitly supportive of the Legislature rather than Ministers.

Independent Crown entities (there are 17 of them) are an illustration.   Agencies like the Commerce Commission carry out their role as part of executive government. A Minister is responsible for them, seeks an appropriation to fund them and accounts to Parliament for their activities.   But often what they do is an irritant to the Ministers.  They serve the Minister by exercising their decision-making independently of the wishes of Ministers except when statute provides otherwise.  Some ICEs like the Privacy Commission serve their Minister with functions that can include advocating against the preference of  Ministers.

State owned enterprises (there are 16) are required to operate in a commercial manner, but in doing so they must have regard to the Ministers interests as their owner/shareholder. Wherever agencies fit in the scheme of the State sector, their employees must give effect to the Cabinet Manual directive to be fair, impartial, responsible and trustworthy.

Recent developments regarding  Securency International, the Australian Reserve Bank trading subsidiary, illustrate the harm to government that arises when business imperatives take precedence over the obligations to be trustworthy. The chickens are coming home to roost relating to a pattern of corrupt payments made in several markets where Securency sought bank note printing contracts.  Australian Federal Police have charged seven senior managers with multimillion dollar bribes. A major contract to print the Bank of England five pound note has been scrapped, and further enforcement actions may encompass prominent personalities who were directors of the Reserve Bank. Central banks are supposed to epitomise integrity. The way part of the Australian Reserve Bank has been operating will undermine public confidence in government.

Australians will be influenced by media reports. Perceptions will become their reality.  That is why the way agencies and their staff are seen to behave is always important. The obligation on all New Zealand State servants is to do nothing that will harm the reputation of their agency or the State Services. Acting unlawfully to enhance the position of an agency is as unacceptable as acting unlawfully for personal gain.  Integrity is the essence of public service; it is what being business-like means for everyone who works for government.

www.ssc.govt.nz/sites/all/files/Guide-to-NZCGA-1July2011_0.pdf

www.atmmarketplace.com/article_print/182818/Bribery-scandal-halts-5-polymer-banknotes-printing-deal

www.cabinetmanual.cabinetoffice.govt.nz/3.50

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August 1, 2011

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Whistleblowing icon

29 July 2011

The Protected Disclosures Act has been in force for well over ten years in New Zealand. Why then are there remarkably few occasions when informants seek the security promised by this statutory process? Are we discouraged because of the way the media reports whistleblowing elsewhere in the world? Do people becoming aware of problems in their workplace share their concerns with someone they know and trust rather than putting faith in formal arrangements?

The 2010 State Services Integrity Survey found that only 40% of respondents were satisfied with the action taken by their agency in response to reported misconduct. Where misconduct relates to senior officials many lack confidence that appropriate action will be taken. A consequence is the encouragement given to agencies to promote their Protected Disclosures policies.

In the United States whistleblowing is surrounded with much drama. The outcome is often a public profile for the whistleblower, followed by career disintegration. A case this week has seen the vindication of whistleblowing, even if the process has been somewhat protracted and the US Army does not come out with any glory.

Bunny Greenhouse may well become an icon, the whistleblower of the decade.

This week after six years of litigation the US Army has settled her claim, compensating her with almost $1m for her losses. As a senior procurement executive, she strongly objected to massive, secret, non competitive, cost-plus contracts being given to Kellogg Brown and Root, a Halliburton subsidiary, in the run up to the Iraq war. Her agency closed ranks. She was demoted and notice of her dismissal withdrawn only because of media attention.

She testified at a Congressional committee about corrupt practices, in the face of advice from her agency that it would not be in her interests to do so. Subsequent legislation remedied the arrangements she disclosed and the Army ended its relationship with Kellogg Brown and Root. But she was removed from the senior executive service and lost her top secret security clearance. She sued for this retaliation. The case settled this week and she has been assured of a full career and benefits.

The National Whistleblowers Center has described Greenhouse as an American hero. “Whistleblowers like her save the taxpayers hundreds of billions of dollars and are on the front line fighting fraud and corruption. They need to be rewarded and supported.”  Many would be dispirited after this sort of experience. Greenhouse however has commented that she was simply doing her job and protecting the public interest … ” I firmly believe, regardless of the many injustices to me as a professional, that integrity in government is not an option, but an obligation.”

www.ombudsmen.govt.nz/index.php?CID=100018

www.ssc.govt.nz/sites/all/files/integrityandconduct-survey2010-findings-summary.pdf

http://en.wikipedia.org/wiki/Bunny_Greenhouse

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July 29, 2011

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Integrity is expected of universities

28 July 2011

Are university employees subject to the same integrity obligations as  State servants?

Police are investigating the misappropriation of about $500,000 from the Auckland University of Technology. A contemporaneous report is that a senior University manager has resigned.  Circumstances like this bring into question the claim by university staff that they are different from other government employees, and should be exempt from integrity expectation held of others.

New Zealand has 29 state funded tertiary education institutions – eight universities, eighteen polytechnics and three wananga.  TEIs have a hybrid form of governance.  They are Crown entities but few parts of the Crown Entities Act apply to them.  They are part of the Crown but, like State owned enterprises, are excluded from the State Sector Act definition of the State Services. They seek to distance themselves from the Crown but enjoy non rateable status on their inner city heritage properties because of the Crown relationship.

TEI staff are officials for the purposes of the Crimes Act – of particular relevance to bribery and corruption offences – but are excluded both from the State Services Commissioner’s standards of integrity and his general jurisdiction regarding advice and guidance on matters of integrity and conduct.

The rationale for this distinction is that universities are the conscience of the nation; their intellectual endeavour should not be circumscribed, their academic freedom is essential.  Standards cannot be imposed on TEI employees, and members of governing boards are not subject to the integrity duties of Crown entity members. Ironically of course many in TEIs  do no research or teaching and have no justifiable claim to academic freedom.

However, there is more than one way to skin a cat.  All are subject to the ubiquitous application of the Cabinet Manual. TEIs are part of the State sector, and subject to the provision requiring that “all employees in the State sector must act with a spirit of service to the community and meet high standards of integrity and conduct in everything they do. In particular, employees must be fair, impartial, responsible, and trustworthy.”

These four principles of public service are informed by the State Services Commissioner’s code. Guidance on Understanding the Code explains what they mean.  There would never be doubt about the apparent offending reported at AUT, but with the impending general election, TEI staff should consider whether in fact they have the political neutrality obligations of State servants.

www.3news.co.nz/AUT-CEO-resigns-amid-fraud-claims/tabid/423/articleID/220246/Default.aspx

www.ssc.govt.nz/sites/all/files/Guide-to-NZCGA-1July2011_0.pdf

www.cabinetmanual.cabinetoffice.govt.nz/node/42#3.50

www.ssc.govt.nz/code-guidance-stateservants

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July 28, 2011

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