Friday, May 05, 2006

John Armstrong: Rattled by unprecedented and malicious leak

While maintaining an air of composure, the Government will be rattled by the leaking of confidential Cabinet papers to Telecom.

Understandably so. On the scales of political and commercial sensitivity, this leak is right off the dial.

There appears to be an enemy within. That is worrying enough.

While Labour has not been damaged so far, there is the other worry that the State Services Commission inquiry confirms the leaker is a public servant or political adviser working in a ministerial office in the Beehive, rather than some anonymous official based inside a large Government department.

That would be highly embarrassing for the affected minister - and could even raise the prospect of resignation if procedures for handling sensitive documents in his or her office are deemed to have been lax.

National is demanding Communications Minister David Cunliffe resign because the Cabinet paper went out under his name. That is a pretty harsh call, given the paper was in the hands of all ministers last Friday and was not received by Telecom until Wednesday.

However, the Opposition is right in underlining the serious nature of this leak, which is thought to be unprecedented.

Sir Roger Douglas offered to resign as finance minister in 1986 after his office mailed Budget documents to news media organisations ahead of Budget day. That was a bureaucratic botch-up. This leak was malicious.

The closest comparison may be the 2001 case of a consultant working for the Treasury who leaked potentially sensitive information about the business plan of the yet-to-be-established Kiwibank to Act's Rodney Hide.

However, the current case is more serious for involving Cabinet papers, which are deemed sensitive by definition and whose circulation is subject to strict rules.

The Telecom paper was doubly sensitive for being Budget-related. Moreover, it contained information of the highest commercial sensitivity which was bound to impact negatively on the share price of one of the country's largest companies with tens of thousands of shareholders.

There is the question of motive. Was it some official who believed opening Telecom to more competition was bad policy?

Or was the leak an effort to sabotage the Budget?

Or was there a financial motive which saw the perpetrator benefit personally through insider trading?

If the leak was politically motivated, the perpetrator would more likely have handed the document to the Opposition in order to embarrass the Government.

The Prime Minister is said to be running the full gamut of emotions from fury to apoplexy, demanding the leaker be caught post-haste and summarily sacked.

The list of ministers and officials who would have had a copy or access to one are thought to number around 50.

There seems to be no obvious reason why a minister would have leaked the paper as that would have cut across Labour's Budget strategy.

Helen Clark is not so worried that the Government's decision to boost uptake of broadband has become public earlier than planned as the announcement has had plenty of positive exposure. But she hates leaks. She is a stickler for discipline. Leaks are a sign of lax discipline. Leaks of this scale help the Opposition paint a picture of a Government at war with itself and not in control.

The Prime Minister was already on the warpath following a couple of recent minor leaks from the Labour caucus.

Whatever the State Services Commission uncovers, you can guarantee there will be some stern lectures to the troops from on high.

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