Lobbying firms earning hundreds of thousands from contracts with government agencies

Documents obtained by RNZ show Pharmac is advised how to avoid media.
Documents obtained by RNZ show Pharmac is advised how to avoid media. Photo credit: Newshub.

By Guyon Espiner of RNZ

Universities, government agencies and State Owned Enterprises (SOEs) - each with their own teams of spin doctors - are spending hundreds of thousands of dollars of public money on lobbying firms.

The work includes SOEs paying lobbying firms to gather political intelligence on MPs and ministers - providing them with information about their attributes, vulnerabilities and personal and work lives.

Documents obtained by RNZ show Pharmac is advised how to avoid media - including leaving select committee rooms immediately "looking fairly hurried" - and told which journalists are likely to be friendly or hostile.

RNZ filed more than 70 Official Information Act requests and obtained thousands of emails, text messages and even encrypted Signal communications, giving a rare glimpse into the size, influence and trade craft of the lobbying industry.

Unlike most other developed countries, New Zealand's lobbying industry is unregulated. There is no lobbying register, lobbyists don't have to reveal their clients, there is no code of conduct and no restrictions on how fast they move between top government jobs and the private sector.

$2000 a day in a crisis

Lobbying firm Thompson Lewis, whose team includes two former prime ministerial chiefs of staff and a former prime minister's press secretary, is a leading player, making hundreds of thousands from public agencies.

RNZ obtained invoices from Thompson Lewis to Transpower, which makes extensive use of the lobbying firm, despite having its own corporate affairs team and facing no commercial competition to run the national grid.

In March 2020 Transpower agreed to pay Thompson Lewis up to $50,000 a year, based on a retainer of $6000 a month, and for crisis projects nearly $2000 a day.

One of the crisis projects included a communications review after power cuts in August 2021 left 34,000 customers without electricity on one of the coldest nights of the year.

Lobbying firms earning hundreds of thousands from contracts with government agencies
Photo credit: RNZ

In the review Thompson Lewis lobbyist Wayne Eagleson, a former chief of staff to Prime Minister John Key, advised Transpower how to limit media coverage from Official Information Act requests.

"To the extent possible, release all OIA responses on the same day as the release of the reports/responses to the media, so we get everything out that we possibly can rather than drip feeding material."

Eagleson advises Transpower to "shift the narrative" to highlight that these were issues that needed to be addressed by the whole industry and not just Transpower. The media, he tells the SOE, lacks sophistication.

"They don't necessarily understand the respective roles of the various industry players. They tend to look for simple explanations even where a situation may be more nuanced," he told them. "While we can determine what information we give them, we can't control the headline."

MP profiles

The documents show Thompson Lewis also provides Transpower with political intelligence on MPs considered key players in the energy sector.

A Thompson Lewis profile on National MP Barbara Kuriger includes personal details such as her husband's name, how many children they have as well as her background and aspirations.

A section on her personal traits describes her as "likeable and straight up" and "not known within the National party as being overly ideological". It says she "listens well" and is a "solid if not always inspiring speaker."

The SOE also received a file on its Minister David Clark, including his wife's name and the number of children they have.

The profile says he studied medicine at the University of Otago "but not making the grade, trained to become a Presbyterian Minister".

The profile is less than glowing about his political career saying "after a cup of coffee with Grant Robertson he took up a job as advisor to David Parker" to work on policy development.

It says he is "likeable, honest, very smart" but "found it difficult to make decisions as a minister and was allergic to conflict".

"He had a bad 2020 after being sacked for a couple of silly decisions during the lockdown but the broader issue was that as Health Minister he was at home in Dunedin, rather than in the Beehive steering the crisis response, because he wasn't needed. He wasn't able to make the tough calls and refused to see most key players in the health sector."

Other SOEs are also paying for political profiles of MPs. In 2020 Landcorp paid more than $1000 for a book produced by lobbying firm Saunders Unsworth detailing the character traits and background of MPs. The SOE won't release the book, claiming it is commercially sensitive.

Pharmac's image management

The government drug buying agency Pharmac made extensive use of Wellington firm Draper Cormack Group.

In its OIA response to RNZ, Pharmac claimed it "does not engage in lobbying" but since March 2021 had used Draper Cormack and a public relations company to try to increase its public trust.

Pharmac released more than 300 pages of communications with Draper Cormack but would not say how much it spent with the firm.

The documents include results from the Kantar Public Sector Reputation Index 2022 ranking Pharmac third lowest out of 58 agencies.

Phamac says it gets mostly negative media coverage and needs to "find ways to get more positive coverage about our work".

The documents include a Draper Cormack media plan which advises Pharmac that there are two types of stories: "good news and conflict" and that "outrage drives attention and clicks".

If reacting to media questions, it advises Pharmarc to "Stall: "What questions do you have?" and to consider whether "a statement is better than an interview".

The strategy uses Trump and Brexit to tell Pharmac that hope is the most powerful driver. "Donald Trump was the candidate of hope for enough people. Brexit was the position of hope. Hope drives stronger responses and change."

The documents show how the lobbying firm shapes the messages Pharmac delivers to the public.

In one example, Pharmac chief executive Sarah Fitt asks her internal media advisor for help, after getting frustrated with media questions about why it took 25 years to subsidise EpiPens.

"I went with '(it's) been on the list, now reached an agreement, got the budget etc' but need something a bit snappier esp for patients listening," Fitt writes in an email.

Pharmac's senior communications advisor Jane Wright called in the lobbyists. "Can you help us come up with a fresh one liner in response to "why does it take so long?" - our old messages are not cutting it!"

Lobbying firms earning hundreds of thousands from contracts with government agencies
Photo credit: RNZ.

David Cormack, of Draper Cormack, advised them to fudge it. "There isn't really a great answer, so this is a bit of a non-answer: We would love to be able to fund every medicine for every condition but unfortunately that's not realistic. The budget increase we got this year is the largest in our history and allowed us to fund medicines that have been sitting lower down our list of priorities."

When Pharmac received an OIA request asking about spending on communications and media contractors, Draper Cormack was eager to intervene.

"There are two OIA requests in this doc that are sensitive AF - OIA on comms staff/contractors and especially on comms strategy for review," David Cormack wrote in a June 2022 email. "Can I help with these before they go?"

Draper Cormack also plans to improve Pharmac's reputation by "proactive stories" including a "soft media piece" on Sarah Fitt to feature "in softer media, such as Women's Weekly".

A "brain dump of proactive story ideas" includes one on contraceptive numbers. "Are NZers hornier at a particular time of year?"

The strategy also sees Pharmac give certain journalists advance copies of important releases, including its response to the government review of Pharmac by an independent panel.

Pharmac's response to the interim review was given to journalists from Stuff and Newshub on 6 September last year, a day before it was sent to all media.

Judgements are also made about which journalists are likely to be friendly and hostile.

When Pharmac finally moved to fund Spinraza, a treatment for the deadly muscle wasting disease SMA, Draper Cormack saw it as a good opportunity to turn around negative perceptions.

"Advocates have been calling for Spinraza to be funded, and have openly criticised Pharmac for not making a funding decision. Rachel Smalley and her organisation The Medicine Gap have focused specifically on Spinraza, people with SMA, and the treatments Pharmac had not yet funded," the lobbying firm wrote to Pharmac.

"While Rachel Smalley is not the only media personality with a serious bent against Pharmac's approach to helping those with SMA, she is one of the loudest voices in this discussion."

It said that much of the media coverage was "very negatively slanted against Pharmac, with strong implication of incompetence, a lack of caring on Pharmac's behalf, and a lack of fairness in the system".

Starting the process to fund Spinraza could change that, the lobby firm said. "We have a strong opportunity to reset the discussion around SMA, gain favourable media coverage around this issue, and gain ground in the discussion around whether Pharmac is equitable/fair."

The documents also show Pharmac's PR staff making calls on where it believes journalists' sympathies lie.

In November 2022, when TVNZ's Breakfast programme wanted to interview Fitt, Pharmac's senior communications advisor Jane Wright claimed that host Indira Stewart may not be impartial.

"I do know that Indira is a massive Fiona Tolich fan so likely already prejudiced," she writes in reference to SMA advocate Fiona Tolich.

In June 2022 the lobbying firm prepared a staged exit for Pharmac to avoid media questions at a select committee hearing at Parliament, as questions mounted about why it hadn't yet funded the Cystic Fibrosis drug Trikafta.

"What we want to avoid: Sarah [Fitt] being chased by cameras, being hassled about the review. Steve [Maharey, chair of Pharmac] leaving the room after questions about the Review/'heads rolling'. Both of these headlines are very damaging."

The plan was for Pharmac's Jane Wright and Draper Cormack's Tasmin Prichard to tell the media that the CEO has to leave straight after the committee.

"Jane and Tasmin arrive first, prep (the) media saying, 'Sarah has got to go immediately after the committee hearing, if you have questions about Trikafta, we can have media responses back to you today'."

The lobbyists say the CEO and chairman should "arrive very close to start-time," presumably so the media don't have a chance to ask questions.

"After the hearing, Sarah and Steve (are) to leave (the) hearing room immediately … either after answering one or two questions, if they want, or not - looking fairly hurried!"

Universities paying lobbyists

New Zealand's universities, despite having their own communications departments, also pay lobbying firms to do their bidding with the government.

Since January 2020 University of Waikato has paid a $6900 monthly retainer to Capital GR, spending about $262,000 to February this year.

Massey University uses former Cabinet Minister Clayton Cosgrove and has paid his company nearly $64,000 since 2020.

AUT used lobbying firm Sherson Willis for "communications advice" between June and October in 2020 at a cost of $16,220. Most of this related to crisis management advice when the university faced sexual harassment complaints against one of its senior staff members.

Sherson Willis helped draft answers to questions put by Stuff journalist Alison Mau, who broke the story, and also helped draft a complaint about Stuff's coverage of the incident.

AUT also spent $15,266 for "communications advice" from Thompson Lewis between January and March in 2021.

Auckland University paid $10,000 to Sherson Willis in 2021 but refused to release its communications with the lobbying firm under the OIA arguing they were too sensitive.