How to’s of Parliament and the public sector
How to resolve the Martin Matthews saga
How to be heard by a select committee
How to breach the constitution
How to write plain English tax legislation
How to get ahead in the New Zealand public sector
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How to resolve the Martin Matthews saga
Martin Matthews was the chief executive of the Ministry of Transport (MoT) when Joanne Harrison, a senior manager, misappropriated at least $750,000 from the MOT and arranged the payment of $127,160 via another agency for a family member. He was appointed auditor-general in December 2016 and resigned in August 2017. In 2019, he went to the media saying that he had been pressured to resign and that he was petitioning Parliament for an inquiry into his treatment.
The story of Joanne Harrison’s theft was in the public domain by the time it became known that the Officers of Parliament Committee had recommended Martin Matthews’ appointment as auditor-general. Every media follower knew that she had taken the money by the common employee-theft method of falsifying invoices, that from 2013 MoT staff had repeatedly warned Martin Matthews about her conduct, and that he had not investigated the warnings. The inevitable question was how the committee could possibly have considered that he was a suitable person to be auditor-general.
The answer to this question lies in what Martin Matthews chose not to tell the committee. His written application for the job did not mention that a senior manager at the MoT was being investigated for fraud. Nor did it mention that he had been warned since 23 October 2013 by MoT staff that the senior manager was not observing even the most basic rules of financial management. When he was interviewed by the committee, he had to mention the fraud, since it had been well-publicised, but he again did not mention that his staff had repeatedly warned him specifically about what Joanne Harrison was doing. By the time of his interview, 2 reports on aspects of the fraud had been provided to the MoT by Deloitte and Peter Churchman QC, both critical of the way it had been handled. Martin Matthews did not tell the committee about them, either.
In summary, Martin Matthews did not tell the committee anything that would have caused the members to wonder about his suitability.
This raises 2 possibilities: one, that he may have committed a contempt of parliament and, two, that he may not have been properly appointed as auditor-general.
The first possibility arises because of Standing Order 410(b) of the Standing Orders of the House of Representatives, which reads-
“410 Examples of contempts
Without limiting the generality of Standing Order 409, the House may treat as a contempt … (b) deliberately attempting to mislead … a committee (by way of statement, evidence, or petition)”.
The second possibility arises because the appointment of an auditor-general requires a recommendation by the Officers of Parliament Committee to the House, which then makes a recommendation to the Governor-General, to appoint a particular candidate (Public Audit Act 2001, section 7(2)).
What is the situation if the recommendation is based on what the candidate said were the facts but those facts are subsequently shown not to tell the full story? What was parliament’s intention when it required the making of a recommendation? Did it intend only that there be a statement describing itself as a recommendation? Or did it intend that the statement be both expressed as a recommendation, ie, correct in form, and based on all the facts, ie, correct in substance?
Obviously, parliament intended recommendations to be correct in both form and substance. That is why it entrusted the vetting of candidates to a parliamentary committee, which has powers to gather evidence and summon witnesses and is served by advisers and staff. If all parliament had wanted was a piece of paper with “Recommendation” written on it, correct in form but with no substance, it could have written a procedure requiring the Clerk of the House to prepare it.
In the Martin Matthews case, the recommendation failed to satisfy the substance requirement. In my opinion, the consequence is that Martin Matthews was not appointed auditor-general. Since he was not appointed, he could not resign and nor could he be removed under any of the grounds set out in the Public Audit Act 2001, sch 3, cl 4.
One of those grounds is “disability affecting the performance of duty”. It has been suggested that Martin Matthews could have been removed on this ground if he had not resigned first. Using the ground in that way, however, would have affected not just the auditor-general role but many other statutory roles to which that language, or the variant “inability to perform the functions of office”, is relevant*. The disability/inability test in all those Acts would have been stretched beyond its original purpose.
It seems much more sensible to consider what the appointment process requires, as proposed above, and to provide an answer that can apply in the same way to the small number of Acts that specify an appointment process involving a recommendation by the House of Representatives. To bring about the leaving of the person, the House would make an address to the Governor-General stating that its recommendation for the appointment was void. Legislation validating actions taken by a person appointed on a recommendation without substance, as in the Martin Matthews case, would have to be considered on a case by case basis.
Martin Matthews leaving the auditor-general role in the way he did was not a constitutional outrage; rather, it was the system working as it should. A candidate is not a suitable person to be auditor-general who, by not telling the whole truth, risks a charge of contempt of parliament and denies the Officers of Parliament Committee a chance to make a recommendation that is correct in substance.
How to resolve the Martin Matthews saga? The best advice I can give is to look not at the removal process but, rather, at the appointment process.
* It should be noted that “disability affecting the performance of duty” is old-fashioned statutory language that should not appear in any Act passed after 1993, when the Human Rights Act extended protection against discrimination to the ground of disability and defined that term. It is sad to see the sensitivity that the disabled community asked for then being casually overridden now.
2020
How to be heard by a select committee
I made a submission to the Officers of Parliament committee on the Martin Matthews saga, attaching the article above. This is what happened next.
11 April 2020: submission sent to Officers of Parliament committee
“Chair
Officers of Parliament Committee
Parliament Buildings
Wellington
11 April 2020
Dear Sir
Petition by Martin Matthews and 14 others
I wrote a piece about the Martin Matthews case for my blog (attached, marked A), because I considered that the answer to Martin Matthews’ petition lay with the appointment process, not the leaving process.
I then read the submissions on the petition. My reaction is to suggest that everyone involved take a few steps back from the detail so that they can clearly see the two propositions the petition puts forward.
The first proposition is that a person who gets to be auditor-general by not being upfront with the committee is entitled to keep the job even when the truth comes out.
The trouble with this proposition is that it says integrity is less important to the job of auditor-general than it is to the jobs of head of the Immigration Service and chief executive of Maori Television. In 2008, Mary Anne Thompson, the head of the Immigration Service, was investigated to see if she had helped relatives get residency in New Zealand; in the course of the investigation, it was discovered that she did not have the PhD she claimed to have when she entered the public service. In 2002, John Davy, the chief executive of Maori Television, was discovered to have falsified his CV by claiming a non-existent qualification from a non-existent university. Mary Anne Thompson resigned and John Davy was fired. There was no suggestion from anybody that the resignation and firing should not have happened. Yet Martin Matthews and 14 others are telling the committee that his resignation/firing should not have happened.
Why is this? All 3 enhanced their job applications – Mary Anne Thompson and John Davy by claiming qualifications they did not have and Martin Matthews by withholding information that might damage his application. If it was wrong for Mary Anne Thompson and John Davy to do that but all right for Martin Matthews to do it, the only explanation can be that being honest when seeking employment is crucial for the roles of head of the Immigration Service and chief executive of Maori Television and not for the role of auditor-general.
The second proposition is that public servants who repeatedly warn their chief executive about a colleague’s risky financial behaviour deserve, from the public purse, an apology and consideration of appropriate redress, but the chief executive who ignored their warnings deserves, from the public purse, a payment of at least $4,640,279.00.
The trouble with this proposition is that it says ordinary public servants who do their jobs are very much less important than a chief executive who does not do his. (This statement is made on the fairly safe assumption that the redress the State Services Commissioner eventually agreed with the public servants was not a payment of $4,640,279.00 each.) The timeline of events in the Wevers report shows that MoT staff warned Martin Matthews about Joanne Harrison’s conduct repeatedly; specifically, on 23 October 2013, 1 November 2013, 25 August 2014, 29 August 2014, 11 December 2014, possibly 28-29 October 2015, and 4 December 2015. In his comments on the Wevers report, Martin Matthews explains his ignoring these warnings by saying “I was taken in by this fraudster, whom I believed until April 2016 to be a trustworthy and able member of my leadership team. I was wrong. I was not alone in this regard. She was a very convincing and manipulative person who many other experienced people were also taken in by, including a previous employer from whom she had stolen”.
That explanation makes no sense. Perhaps “many other experienced people” in other organisations were taken in by Joanne Harrison but many experienced people right there in the MoT were not and were prepared to say so to their chief executive. Moreover, the chief executive to whom they were bravely voicing their concerns was a Fellow of Chartered Accountants Australia and New Zealand. The staff should have been able to rely on such a well-qualified person to see the significance of the information that they were giving him and to investigate Joanne Harrison’s actions properly. By claiming that, after ignoring his staff, Martin Matthews is entitled to a payment of $4,640,279.00, the petitioners are sending a very clear message to the staff about how little they are valued.
In summary, the petition seeks acceptance for the propositions that integrity is not important for an auditor-general and that the work of ordinary public servants is unimportant. Everyone involved might want to consider whether these are healthy ideas for the New Zealand public sector to embrace.
The petitioners will object that the comments above take no account of the fact that Martin Mathews did not have a chance to read the Wevers report, respond to it in writing, appear before the committee to speak to his response, and ask that further witnesses give evidence in his interest. These rights are provided for in SOs 237 and 238.
However, even if Martin Matthews had had the chance to do these things, he could not have rewritten history. The record would still show that,-
1. in his written application, he did not say-
(a) that a senior manager at the MoT was being investigated for fraud; or
(b) that he had been told at least 6 times over 2 and a half years by MoT staff that the senior manager was not observing the most basic rules of financial management; and
2. in his interviews by the committee, he did not say-
(a) that he had 2 reports on aspects of Joanne Harrison’s fraud, one by Deloitte and one by Peter Churchman QC, that he could make available to the committee; or
(b) that he had been told at least 6 times over 2 and a half years by MoT staff that Joanne Harrison was not observing the most basic rules of financial management.
Given that the ultimate result would be the same even if SOs 237 and 238 had been observed, the petitioners might want to consider being guided by the Beatie report and accepting that an apology is the appropriate redress.
Yours faithfully
Margaret Nixon
Contact: Email address from which submission received. (Emphasis added in view of what happened next.)
Submitting as individual or on behalf of organisation: Individual. (Emphasis added in view of what happened next.)
Appearance before committee sought: No.”
4 June 2020: enquiry to Officers of Parliament committee clerk about submission
From: Margaret Nixon
Sent: Thursday, 4 June 2020 6:54 p.m.
To: Officers of Parliament <OfficersofParliament@parliament.govt.nz>
Subject: Submission to OP select committee on petition by Martin Matthews and 14 others
“In case it was not clear that my email below was intended as a submission, I am resending it with the word ‘Submission’ added to the subject line of the email and to the heading of the letter.”
5 June 2020: Officers of Parliament committee clerk tells me he decided to present submission to committee as correspondence, not submission
From: James Picker
Sent: Friday, 5 June 2020 08:42 a.m.
To: margaretnixon@xtra.co.nz
Subject: Re: Submission to OP select committee on petition by Martin Matthews and 14 others
“Good morning Margaret. Your email has been tabled by the committee but I’m afraid as correspondence, not as a submission. It will be part of their record for their consideration of the item however.
Regards
James”
7 June 2020: informing Sir Maarten Wevers
From: Margaret Nixon
Sent: Sunday, 7 June 2020 06:18 p.m.
To: maartenlwevers@gmail.com
Subject: Martin Matthews’ petition: my wish to state support for your position
Dear Sir Maarten
I tried to make a submission on Martin Matthews’ petition in line with the reports that you have made to the Officers of Parliament Committee. I have been stymied by the select committee clerk choosing to present my thoughts to the committee as correspondence rather than as a submission. I am annoyed about this but there is nothing I can do about it.
It seems wrong to me that the weight of evidence in the submissions will appear to favour Martin Matthews’ position, when there is at least one ordinary person in the community – me – who does not support it. I am, therefore, sending my thoughts to you (see below) in the hope that you will read them. I am not asking anything of you other than that.
I should state that I do not know anyone involved with this petition.
Yours sincerely
Margaret Nixon
8 June 2020: courteous reply from Sir Maarten Wevers
I note the speed and courtesy of the reply and do not reproduce it here.
How to be heard by a select committee? The best advice I can give is don’t ask me since I plainly don’t have the knack.
2020
How to breach the constitution
The separation of powers is a fundamental rule in New Zealand’s constitution. The powers referred to are the 3 branches of government – judicial, ie, the courts; executive, ie, the government; and legislative, ie, parliament. The reason why the separation of these powers is crucial is that it enables each branch to keep an eye on the others and so prevent them from abusing their powers.
A practical way to ensure that this supervision is maintained is to provide each branch with its own legal advisers. The legal advisers become expert in defending the area of power on which they give advice and critiquing the exercise of power by the other branches.
The legal advisers to the judicial branch are the counsel who appear before the courts. Their knowledge of case law gives the judges the information they need to apply existing precedents and make new ones.
The legal advisers to the executive branch in New Zealand are the counsel employed by the Crown Law Office (CLO). The CLO website explains clearly how the office works for the government. It says-
“The Crown Law Office provides legal advice and representation services to the government in matters affecting the executive government … The Office has two primary purposes in providing these services:
- to ensure that the operations and responsibilities of the executive government are conducted lawfully, and
- to ensure that the government is not prevented, through legal process, from lawfully implementing its chosen policies and discharging its governmental responsibilities.”
This paragraph should start by saying “The legal advisers to the legislative branch are the lawyers employed in the Legal Team in the Office of the Clerk of the House of Representatives.” However, a difficulty arises. The legislative branch no longer has its own legal advisers and, instead, uses those of the executive branch.
This situation is revealed in a matter before the Officers of Parliament Committee. In 2019, the committee received a petition from Martin Matthews seeking redress for his treatment by the committee leading to his resignation as Controller and Auditor-General. The Controller and Auditor-General is an officer of parliament, one of only 3 such positions. At an earlier time, the committee had wanted legal advice on Martin Matthews’ situation. It asked the CLO for advice and the CLO gave it. The advice can be seen on the committee’s web page as part of the evidence on the Martin Matthews petition. (Tab “Submissions and Advice”, documents “Crown Law advice to the Speaker of the House 1 August 2017”, “Crown Law (Advice from Una Jagose QC to Speaker of the House on Controller and Auditor-General)”, and “Crown Law (Advice from Virginia Hardy to Speaker of the House on Controller and Auditor-General)”. The last 2 documents are both dated 26 July 2017 and are identical except that one was signed by Una Jagose and one was signed by Virginia Hardy. The advice of 1 August 2017 concludes “We are happy to assist further on this issue, if required.” and the advice of 26 July 2017 concludes “I am happy to provide further information or advice if that would assist.”)
The Officers of Parliament Committee should not be seeking legal advice from the CLO at all – much less on such an essentially parliamentary matter as the removal of an officer of parliament. Moreover, the CLO should decline to give the advice when asked. If the CLO has decided that it is proper for it to give advice to the legislative branch, it should say this clearly on its website, just as clearly as it says now that it advises the executive branch.
How to breach the constitution? The best advice I can give is to disestablish the Legal Team in the Office of the Clerk so that the legislative branch is left without independent legal advice.
2020
How to write plain English tax legislation
Simon Farrow wrote a letter to the Dominion Post in December 2018 headed Economists’ English. It made me laugh. It took me back to my days as the lead law drafter on the rewrite of the Income Tax Act (see Rewriting the Income Tax Act (2004)).
The rewrite project was launched with great fanfare in the early 1990s. The idea was that the IRD would turn the incomprehensible language of the Act into something that reasonably normal people could understand. The decade went by and nothing emerged. I began work on the rewrite in 2000 and 4 years later the major part of the work was done.
It seemed to me that the IRD could not make progress on the rewrite because the place was riddled with economists, accountants, and tax lawyers. To them, this provision made perfect sense: “This section applies to revenue account property for which an amount derived from the extraction, removal, or sale or other disposition of the revenue account property is gross income of a taxpayer under section CJ 1”. To me, an experienced plain language law drafter, it was the stuff of nightmares. I knew it was English, but what could it possibly mean? (And I’m not making it up – it really was section DJ 13A(1) of the Income Tax Act 1994.)
No-one at IRD or in the tax industry was grateful to me for pushing the rewrite on and actually getting something achieved. However, I did enjoy my laugh with Simon Farrow.
How to write plain English tax legislation? The best advice I can give is to sideline the economists, accountants, and tax lawyers; employ an experienced law drafter; and give that drafter a modicum of support.
2018
How to get ahead in the New Zealand public sector
Do this now! Take these 3 easy steps and watch your career take off!
Step 1: Be a man!
Why is that? Read Gender bias in the public sector … if only that woman had been a man!
Step 2: If you must be a woman, be the right sort of woman!
What is the right sort of woman? Simple, just read this story!
There were once 2 Offices, staffed by public servants and deep in the heart of the legislative process, that needed new chief executives. Although these offices are unknown to almost everyone, they are vital to the making of New Zealand’s laws.
In Office 1, there were 2 candidates for the position. One was a woman and one was a man. They had both worked in the Office for some years.
The woman had the specialist qualification that one might reasonably expect for a role in an office involved in law-making. She was an assertive person who did not mind ruffling feathers if it was necessary to do her job properly. On a scale of women leaders with Christine Rankin at one end (https://www.speakers.co.nz/our-speakers/all-speakers/christine-rankin/) and Margaret Bazely (https://www.ufba.org.nz/news/2015_ufba_conference_in_brief) at the other, the woman was towards the Margaret Bazely end.
The man did not have the qualification.
If only the woman had looked in the mirror!
In Office 2, there were also 2 candidates for the position. Both were women. They had both worked in the Office for some years and both had the appropriate qualification.
Woman A was an assertive person who did not mind ruffling feathers if it was necessary to do her job properly. She was an excellent writer with a passion for plain language. On a scale of women leaders with Christine Rankin at one end and Margaret Bazely at the other, woman A was at the Margaret Bazely end.
Woman B could not write her own application for the job; she did a draft but had to get an editor to put it into shape and correct the punctuation and grammar. But, on a scale of women leaders with Christine Rankin at one end and Margaret Bazely at the other, woman B was right at the Christine Rankin end.
If only woman A had looked in the mirror!
Step 3: Don’t be a New Zealander!
Who should you be? Simple, just read this story!
There was once a government office that needed a new chief executive. At the time, a mid-level civil servant from England was here looking for a job because he had been made redundant from the UK’s Government Legal Service.The State Services Commissioner, Mark Prebble, met this chap at a party and thought he was a nice bloke, so he appointed him to the chief executive job. There were 4 suitably qualified New Zealand candidates but, hey, who wants a Kiwi accent when you can have that oh-so-sexy English one?
Having assumed the position, the Whitehall mandarin learned that he could get a redundancy payment in the UK if he could only do 18 months more in the UK’s Government Legal Service. What to do? No worries, mate. The NZ government and the UK government made an arrangement – the English chappie would have a mid-level position in a UK government department for 18 months while a deputy stood in here.
That was all fine, except that the Act setting up the office did not provide for a deputy’s position. An urgent legislative change was needed. Parliament had to amend the Statistics Act 1975 to defer the 2011 census, so why not chuck in a change allowing a deputy for this other office that had nothing at all to do with the census? Thus was born the Duties of Statutory Officers (Census and Other Remedial Provisions) Bill and, in particular, clauses 5 and 6. The clauses tried to hide what they were doing in a welter of words, but judicious pruning reveals their true purpose-
5 Principal Act amended
This Part amends the Statutes Drafting and Compilation Act 1920.
6 New sections … inserted
The following sections are inserted after section 8A:
“8B Delegation of functions, responsibilities, duties, or powers
“(1)The [chief executive]—
“(a) may … delegate to any … staff member of the [government office] any of the functions, responsibilities, duties, or powers of the [chief executive]:
“(b) must ensure that an appropriate delegation is at all times in place … to enable a person to act in place of the [chief executive] during any absence … of the [chief executive] ….
“8C Absence … of [chief executive] …
“(1) A person who holds a delegation … may act in place of the [chief executive] while the [chief executive] is absent ….”.
The bill whizzed through Parliament in 2 sitting days, which left just enough time for the English chap to appoint a deputy before heading off back to the Mother country. His photo appeared on the UK department’s website as a team leader throughout the time that the deputy acted as the [chief executive] back here.
The English import came back so that he and his deputy could be rewarded with QSOs for their efforts and then went home to be rewarded with his redundancy money.
If only those those New Zealanders had not been colonials! If only their ancestors had stayed in the UK!
2015
Margaret's musings 