Tuesday 4th June 2019
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An investigation into last week's Budget leak by the State Services Commission has morphed into an investigation into the actions of Treasury Secretary Gabriel Makhlouf after the discovery that the National Party had obtained accurate information from the 2019 Budget.
With just 23 days left in the job he's held since 2011, Makhlouf is hanging onto his position despite his agency being not only responsible for an embarrassingly simple website vulnerability, but also for advising the Police and Finance Minister Grant Robertson that he believed the Treasury had been "hacked", a term describing a cyber-attack that compromises a site's defences.
It became clear within hours that far from being hacked, it was possible to get supposedly embargoed Budget secrets by using the search engine on the Treasury website, which gave results taken from a 'clone' site.
The pressure on Makhlouf is intense as he prepares to take up his new role as governor of the Irish central bank, an organisation with even more serious cyber-risks than the Treasury because of its role to ensure the monetary system works.
In a statement this evening, SSC head Peter Hughes says his probe will hold "an investigation into recent questions raised concerning the chief executive and Secretary to the Treasury, Gabriel Makhlouf, and his actions and public statements about the causes of the unauthorised access to Budget material".
Last week, when Makhlouf called for an SSC inquiry into the Budget leak itself, Hughes said he was "considering his options".
The SSC statement was released an hour after Prime Minister Jacinda Ardern's weekly post-Cabinet press conference, where she repeatedly expressed the "expectation" that any formal inquiry would look into the "quality of advice and decision-making" that added to a debacle that overshadowed the government's first-time 'Well-being Budget', intended as a moment of maximum political impact.
“Mr Makhlouf believes that at all times he acted in good faith,” said Hughes. “Nonetheless, he and I agree that it is in everyone’s interests that the facts are established before he leaves his role on 27 June if possible. Mr Makhlouf is happy to cooperate fully to achieve that. I ask people to step back and let this process be completed.”
However, the inquiry could be expected to take "some months", with terms of reference and an inquiry head or team yet to be appointed.
"The questions that have been raised are a matter of considerable public interest and should be addressed," said Hughes. "The investigation will establish the facts in relation to Mr Makhlouf’s public statements about the causes of the unauthorised access; the advice he provided to his Minister at the time; his basis for making those statements and providing that advice; and the decision to refer the matter to the Police."
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