The Dangers of Mates Having a Drink Together
Crony capitalism is a despicable thing. It occurs when government sidles up to businesses to offer favours and rewards not available to competitors if they will do the government's bidding. It's a "you scratch my back, and I'll scratch yours" situation. Publicly it's sold as a "win-win" for all. The reverse also occurs. Businesses sidle up to government to lobby for contracts and benefices. The quid pro quo is often support in the form of funds for political campaigns or, worse, money in the back pockets of politicians.
All governments and politicians, of whatever stripe (ideologically left, right, and centre) are susceptible to such corruption. Power corrupts. Businessmen and private capital are entirely corruptible when they get close to power. Politicians are already well down the track, their hubris driving them on.
The only way to resist the invasion of such rodents gnawing at the body politic is to maintain a high wall of separation between politicians and the decision makers who will decide which contracts and tenders will be awarded to whom.
Those who decide must follow defined process and have no conflicts of interest in the decision. Their processes in decision making must be subject to public, independent audit. When politicians breach the ethical boundaries they ought to be subject to immediate ejections from the Parliament and/or the Administration.
New Zealand's prime minister, John Key is particularly vulnerable to the temptations of crony capitalism. There are others in his party with a business background who are likewise vulnerable to temptation. Key has been a successful businessman in a former life, and an exceptional deal maker. It is to be expected that he would be tempted to carry over that deal making skill and ability into his political responsibilities. He would "do deals" with big monied businesses.
A deal was stitched together pretty much in a back room, laundered through a suspect public tender process, and signed with New Zealand's largest casino company, Sky City. The terms of the deal were that Sky City would build a large public convention centre in Auckland city, with no input of public money, but would be granted concessions to deploy more pokey machines in its facilities. It was inevitably sold as a "win-win" for everyone. The deal caused a great deal of public discomfort. It had all the malodorous scents that normally attend crony capitalism.
A month or so ago Sky City informed the government that it had underestimated the cost of building the convention facility. This was despite an alleged competitive tender process in which Sky City's proposal was chosen on its merits. It now needed hundreds of millions of dollars of cash from the taxpayer or Auckland would have to put up with an "eyesore" building, rather than an iconic, architectural objet d'art. All sorts of questions were begged. Had Sky City deliberately under-estimated the cost of building the convention centre in order to win the tender, all the while gambling on being successful later at standing over the government when it was committed and the building contracts locked in? Had Sky City just made a dumb mistake and underestimated the cost?
Key began to soften up the public for taxpayers' money being laundered through Sky City's operations. It would be terrible, he averred, if the new Sky City convention centre ended up being not an iconic building, but an "eyesore". The public (left, right, and centre) was outraged. Key and his cronies have backtracked quickly, and affirmed that no such injections of public money would be forthcoming. Sky City has been left with a project to build what has now been billed, by Key, as a public eyesore. It's a well deserved slap on the wrist for a temporizing prime minister whose ethics have been called into question.
At best the whole saga bespeaks gross incompetence on the part of Sky City and faulty moral compass on the part of the Prime Minister. The best the Prime Minister is left with is the public evidence that his pragmatism lacks a strong ethical foundation, and he is, therefore, likely to act without necessary scruples.
The positive result is that this instance of crony capitalism has been exposed, has been nipped in the bud, and has clothed the respective politicians with shame. The backdown has been public and therefore embarrassing. Hopefully the public damage to their reputations will mean they will never countenance anything like this again without it being at more than a long arm's length.
Let's hope the "eyesore" will long stand as a public monument to the corrupting influences of crony capitalism.
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