By Joshua.Chambers

01 Nov 2012

Tight rules control how troops can engage in combat; but the regime governing how former military figures can sell their skills and contacts to private companies are much weaker. Joshua Chambers assesses the system.

“It is the next big scandal waiting to happen,” David Cameron said of lobbying in 2010. “We all know how it works: the lunches; the hospitality; the quiet word in your ear; the ex-ministers and ex-advisers for hire, helping big business find the right way to get its way.”

The prime minister was certainly prescient, as the latest scandal shows. Late last month, following a sting operation, The Sunday Times published evidence that former senior military officials had offered to lobby their ex-colleagues on behalf of fictional foreign defence contractors. Some were recorded saying that they could do this despite the rules, with one general even claiming that he could influence the Ministry of Defence (MoD) permanent secretary because they had attended the same school.

While the specific allegations are disputed by those involved – and the MoD is investigating – the sting was triggered by a former permanent secretary telling The Sunday Times that military procurement across the board is being “contaminated” by retired generals lobbying on behalf of arms firms. The implications of the sting look serious for public and private sectors alike, so CSW has assessed the likely fallout.

Currently, officials and officers leaving the Ministry of Defence are supposed to follow the guidelines set out by the Advisory Committee on Business Appointments (ACOBA). This committee may put restrictions in place around the kind of work they can undertake, in order to prevent inappropriate lobbying and the abuse of knowledge and influence. However, one military figure said to The Sunday Times that “you just basically ignore it,” adding that the rules “have no legality” and that the system is “broken.”

Certainly, ACOBA doesn’t have enforcement powers or the power to hand out sanctions for breaking its instructions, which may run for up to two years after people leave public service. What’s more, legal obstacles meant that during 2007-2009 the committee couldn’t exercise even these powers in the defence sector. In 2010, ACOBA chair Lord Lang told CSW he wasn’t unduly concerned by the gap, because most military figures would have “self-scrutinised” before taking up jobs. “These are people of distinction who have had honourable careers,” he said. When asked whether people might have said the same about MPs before the expenses scandal, he replied: “I don’t think it is a fair parallel. The kind of people that come before us are sought after because of their successful and distinguished careers. MPs are elected from a wide range of sources. Some are very able; some are less so.”

When presented with his comments, Lang now says that “we cannot pre-judge the outcome of the MoD inquiry. I continue to believe that the majority of those working in public service are honourable regardless of what it is alleged that some individuals may have done.”

The ACOBA process could hardly be deemed obtrusive in its scrutiny, as former first sea lord Admiral Lord West made clear when appearing in front of the Public Administration Select Committee (PASC) earlier this year. He described an “exceptionally polite” process driven by paperwork, and was unclear about the requirements being placed upon him.

This lack of clarity reflects the difficult question of what is a legitimate lobbying role. After all, “ex-military people have to earn a living somehow,” says former rear admiral Chris Parry (who chose not to pursue a career in defence when he left the MoD). PASC chair Bernard Jenkin, meanwhile, says that “there is nothing inherently illegitimate in former members of the armed forces being employed in the defence industries, in order for them to give their advice and expertise to those companies to improve their products and perhaps sell their products abroad.”

However, both believe a problem arises when one time public servants are hired for their personal influence over former MoD colleagues, rather than their expertise. “I don’t think anybody objects to [companies] employing people for their technical expertise; it’s people being employed for their ability to influence [buying] decisions that’s unethical,” Parry says, adding that “everybody knows that it happens, it’s been pretty obvious” and that “the real litmus test is whether [appointees] are doing a real job or not.” If they don’t have a clearly-defined role, their job may be to keep in touch with useful friends inside government.

The nature of the armed forces makes it easier for former senior figures to retain influence outside Whitehall, Parry believes. “It’s like any hierarchy. People do favours for people, and those favours get returned,” he says. “If somebody has been your patron and says: ‘Look, I work for ‘X’, we would really like to get some business intelligence,’ it’s very difficult for somebody to turn that down. You have to have a certain amount of moral courage, I would suggest.”

Furthermore, the armed forces do need to have a close relationship with defence contractors, Parry says. “There has to be a close relationship, because you have to make your products and services relevant and appropriate.”

PASC believes that the best way to determine the legitimacy of appointments and then enforce the rules is to introduce a ‘conflicts of interest commissioner’ overseeing a system of independent regulation, based on the Canadian model. “We recommend statutory rules. If you breach them, you’re breaking the law and there will be penalties and sanctions,” Jenkin says.

However, he admits that the Canadian system can still suffer from problems – in particular, “the misconception that the rules are a definitive guide to conduct when, just because you’re not breaking the law, it doesn’t mean you’re not doing something wrong.” Further, it’s difficult to pin down a definition of what constitutes ‘lobbying’ on behalf of a company – especially in a sector where personal engagements such as regimental dinners or Royal British Legion events see former colleagues meet up with serving officers.

Douglas Carswell MP speaks frequently about the “revolving door” between the MoD and defence companies, and disagrees with PASC’s proposal. “It would be ludicrous to try to draft a complex set of rules that apply to every civil service job, every situation that could arise,” he says, adding that “it sounds good, but I think it would be genuinely unfair on civil servants.”

Carswell instead calls for more transparency: “If you work for government as a public official then go and work for a private sector [business] that is a contractor for government, there should be a requirement to disclose what it is you’re doing for that company,” he says. Such people should publish their diaries, he believes, arguing that this would be “perfectly compatible” with personal privacy.

Jenkin warns that serving civil servants should be rigorous in keeping records of their conversations with people in private companies. “I imagine that one of the systems that will be established in the Ministry of Defence is that people will have to record those meetings much more regularly and record what was discussed,” he says. “People will want to do that for their own protection.”

Meanwhile, Parry believes that a cultural change is necessary. “We’re in an age of moral relativism now, where certainties have faded,” he says. “Society gets the people it deserves, and if it commodifies these intangible things like honour, duty, loyalty, patriotism, it will find that people take advantage of these things to say: ‘I’m in this for myself’.”

ACOBA says The Sunday Times allegations are “serious”, adding that it doesn’t have the “role or powers itself to investigate or sanction individuals who do not abide by its advice. The powers and the rules operated by the committee are set for it by government. We await the government’s response to the PASC report.”

That PASC report makes up just one of many efforts to reform the business appointments system, but previous calls by the committee for change have produced slender results. Carswell says that reform of the system does have support in Parliament, although “I’m afraid many colleagues are still lulled into thinking that the answer is a quango.”

The prime minister wanted to prevent “the next big scandal” by setting up a statutory register of lobbyists; something the Cabinet Office is currently working on. However, this will only cover public affairs firms, so the former generals wouldn’t have been registered.

They would have been bound by strict lobbying rules – with penalties – by PASC’s proposed new regulator, though, and the government has yet to respond to the select committee’s recommendations. As they mull over the options, The Sunday Times’s sting will add weight to the growing calls for reform.

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