State Services Commissioner Peter Hughes announced the findings of an investigation into Gabriel Makhlouf and the Budget debacle:
. . . • Mr Makhlouf acted in good faith, reasonably and without political bias in relation to the advice he gave the Minister of Finance
• Mr Makhlouf’s decision to refer the matter to Police was made in good faith, was reasonable and showed no evidence of political influence
• Mr Makhlouf did not act reasonably in relation to:
o his use of the phrase “deliberate and systematically hacked” in his media statement issued at 8:02pm on Tuesday 28 May
o his use of the bolt analogy in media interviews on the morning of Wednesday, 29 May
o in his media statement on the morning of Thursday, 30 May, continuing to focus on the conduct of those searching the Treasury website rather than the Treasury failure to keep Budget material confidential.
• In relation to Mr Makhlouf’s other written and oral media statements, Mr Ombler found Mr Makhlouf acted in good faith, reasonably and in a politically neutral manner.
The Commissioner said he accepts Mr Ombler’s investigation report and all his findings, which were reviewed by former Solicitor-General Mr Michael Heron QC.
Mr Hughes said his expectations of chief executives when things go wrong is very clear: they need to own it, fix it and learn from it. And stand up and be accountable. He was disappointed Mr Makhlouf’s actions on this occasion fell short of those expectations given the fact there was a breach of the Treasury’s information security, which was his responsibility.
“The breach of security around the Budget documents should never have happened, under any circumstances,” said Mr Hughes.
“The right thing to do here was to take personal responsibility for the failure irrespective of the actions of others and to do so publicly. He did not do that.
“As the investigation found, Mr Makhlouf focused more on the actions of the searchers of the Treasury website rather than his own personal responsibility as Chief Executive for the failure of the Treasury systems.”
The investigation found Mr Makhlouf’s decision to refer the matter to the Police was in good faith, reasonable and was not politically influenced. But Mr Hughes said Mr Makhlouf should have sought more advice before issuing a media statement about the referral.
“In my view it was not managed well by Mr Makhlouf,” said Mr Hughes. “It was a clumsy response to a serious issue and is not what I expect of an experienced chief executive.
“I have concluded that Mr Makhlouf failed to take personal responsibility for the Treasury security failure and his subsequent handling of the situation fell well short of my expectations. Mr Makhlouf is accountable for that and I’m calling it out.”
The Commissioner said the investigation report is very clear that there are no grounds to support allegations that Mr Makhlouf’s public statements or actions were politically biased. . .
The correct response to mismanagement of this magnitude is the 4-A formula: Admit the mistake, Accept responsibility, Apologise and if appropriate and possible, make Amends, none of which was evident in Makhlouf’s reply:
Mr Ombler’s investigation was conducted thoroughly and fairly. I have read the report carefully and encourage others to do so. I apologise that Budget information was not kept secure. The inquiry that I asked the SSC Commissioner to undertake will help us understand exactly how that happened and how to stop it happening again.
The report confirms I acted at all times in good faith and with political neutrality. It also confirms that I acted reasonably, other than in my descriptions of the incident. I am pleased that my honesty and integrity are not in question.
It has been my privilege to have had the opportunity to serve New Zealanders and I’m very proud of what my Treasury team has achieved over the last 8 years.
This is a 4-A formula failure and theTaxpayers’ Union is understandably unimpressed:
Responding to the release of the State Services Commission’s findings into Treasury Secretary Gabriel Makhlouf, New Zealand Taxpayers’ Union spokesman Louis Houlbrooke says:
“The State Services Commissioner deserves credit for an investigation that made clear and damning findings. The report finds that the ‘deliberately and systematically hacked’ statement, plus the bolt analogy, were not accurate, and that Mr Makhlouf failed to take personal responsibility for the security failure. In other words, Mr Makhlouf has failed in his first responsibility: to the taxpayers who fund his salary, and who deserve accuracy in the public statements of one of the country’s most highly-paid bureaucrats.”
“Mr Makhlouf’s complete lack of repentance in the face of these findings insults the public, and it is a stunning failure of process that his departure from the job today is allowing him to escape the full wrath of accountability. The Government must order him to face up to the media and public in the next few hours. If he doesn’t have to do this, he’ll be laughing all the way to Dublin.”
“The timing of the announcement of these findings looks cynical; it’s the same day and Makhlouf leaves his job and the Government announces a high profile reshuffle. If he plans on going into hiding for his final few hours, it is the job this Government and the media to flush him out of the woodwork, lest we see a bitter failure in accountability. The public are entitled to expect more accountability than Mr Makhlouf reading the report as he jets off to Ireland.”
The damage done by the initial unreasonable response has been compounded by the lack of repentance by Mackhlouf and the inability for Hughes to do anything about it.