In most Western democracies, a direct move by the Prime Minister’s chief of staff to a leading position in a merchant bank would be regarded as a public scandal.

Arthur Sinodinos is a well-liked and respected person, and Goldman Sachs JB Were a very successful business. But the firm has extensive business with the Australian government – it was for example one of the global coordinators for the T3 float.

This raises massive conflict of interest problems.

Prior to departing, was Arthur working on any issue with which the company was also involved? In any large corporation with an ethical code, if a senior employee accepts a job offer from a major supplier or competitor, they will be taken off line, sent on “gardening leave” to avoid conflicts. That did not happen here.

Post departure, given Arthur Sinodinos as the Prime Minister’s top adviser was privy to every important government policy decision, how can he avoid a perception that he’s able to use that knowledge to unfairly advantage Goldman Sachs?

Sinodinos is undoubtedly ethical and will not deliberately take advantage of his inside knowledge or disclose sensitive information. But we’ve not yet invented the Men in Black device for removing memories: so there can be no certainty that his information won’t indirectly influence his work. Conflicts of interest are about not only actual but also the perceived potential for conflict.

Many other governments insist on cooling off periods before senior officials can accept employment with firms that contract to or lobby government.

The UK requires employment offers to be subject to consultation with an independent advisory committee for two years post departure.

Canada presently has a one-year cooling off period but the new Federal Accountability Act will raise it to five years for any lobbying activity.

The US has a much tougher regime: permanent bans on some types of activity after leaving a post, and otherwise mostly a two-year cooling off period (one year in some circumstances) before you can deal with an issue you knew about while in government.

An e-brief from the parliamentary library on codes of conduct provides other international and Australian State/Territory examples.

In 2002 the Australian Democrats sought to include cooling off provisions in the Ministers of State Amendment Bill. They failed. It has become common practice for not just advisers but Ministers in the Australian government to walk through the revolving door into lucrative private sector positions. But being common does not make it right: it corrodes standards of public life and ethics.

You can understand a government does not want to restrict its staffers’ employment opportunities. The problem is that government decisions should not be swayed by Ministers or staff thinking about future jobs they might pick up: that leads to bad policy and the rest of us losing out.

There is a solution in this case. If the government wanted to avoid any perception of conflict, it could decide to give no more work to Goldman Sachs for, say, a year. That would effectively institute a cooling off period, without having to legislate, and bring us into line with comparable democracies.

But don’t hold your breath.

Peter Fray

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