Thursday 27th June 2019
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Treasury Secretary Gabriel Makhlouf failed to take appropriate personal responsibility for the website security breach that allowed the National Party to access secret budget documents ahead of the May 30 budget delivery, State Services Commissioner Peter Hughes has found.
Releasing the report by his deputy, John Ombler, into Makhlouf's actions, Hughes said the outgoing Treasury secretary had acted "in good faith" and without political bias, but his response to the leak "fell well short of my expectations".
"It was a clumsy response to a serious issue and is not what I expect of an experienced chief executive," Hughes said in a statement. "Mr Makhlouf is accountable for that and I'm calling it out.
"The right thing to do here was to take personal responsibility for the failure, irrespective of the actions of others to do so publicly. He did not do that."
However, both Hughes and the Ombler report stop short of suggesting Makhlouf should have offered to resign after claiming and then maintaining for some time that the Treasury website had been deliberately "hacked", and referring the matter to the police. The police swiftly concluded there were no grounds for investigation since the mistake had been of the Treasury's own making.
The report marks an ignominious end to Makhlouf's eight years as the country's most senior public servant. He is leaving the role today to become governor of the Reserve Bank of Ireland.
No statement from Makhlouf was available at a media lock-up run by the SSC this morning to coordinate the report's public release.
Ombler found that "early on in this incident, Mr Makhlouf seems to have developed a very strong mental model which was based on the unacceptability of the conduct of the person or persons undertaking the searches."
Instead, he should have been assuming greater personal responsibility for the politically embarrassing debacle that National Party leader Simon Bridges attempted to paint at the time as a political conspiracy between Makhlouf and Finance Minister Grant Robertson to tar National for its actions.
Bridges called it "the most despicable day in New Zealand's political history", but the Ombler report finds that Makhlouf acted in good faith and without political bias despite mishandling the incident.
"I consider that he went out of his way to ensure he was not implicating the National Party in his media statement and interviews."
A separate inquiry is underway into how the security on the Treasury website was so lax that a simple search using the website's own search bar allowed the National Party to access budget secrets, which Bridges began releasing publicly in the two days before the government's first 'wellbeing' budget.
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