The revolving door: why politicians become lobbyists, and lobbyists become politicians

The “revolving door” of politics – the means by which government officials leave office to become lobbyists, and by which lobbyists become government officials – presents problems for modern democracies that largely go unrecognised, unaccounted for and unpoliced.

In certain respects, the revolving door is inevitable, a natural byproduct of political tragics fulfilling a varied career in politics. But when even the most senior politicians go on to work as lobbyists, it can profoundly undermine democracy.

Unprecedented access

A lobbyist’s efficacy primarily depends on their ability to gain access to decision-makers.

Of the 538 lobbyists registered by the Department of the Prime Minister and Cabinet at the time of writing, 191 are former government representatives.

Working in government in any capacity provides knowledge that is invaluable to lobbyists. But the advantage is not merely informational: having worked with government officials means knowing them. It often means having had drinks with them, or knowing their loved ones' names and birthdays, or their personal phone numbers.

The best lobbyists do not merely lobby a government contact: they lobby a friend. This immediately creates a conflict of interest that cannot be overcome; we are fundamentally biased toward those we like.

Incompatibility with the law

However, the conflict of interest does not end there. The revolving door makes it all too easy for corruption to take place, because it creates problems that aren’t adequately policed by anti-corruption laws in Australia (or in democracies generally).

The Commonwealth Criminal Code prohibits government officials from “dishonestly” asking for, agreeing to receive or receiving a benefit, where that benefit will influence the exercise of their duties. Beyond this, a patchwork of state and federal laws and codes of conduct exist with the express purpose of preventing quid-pro-quo forms of corruption in politics.

However, with rare exceptions, such as the prosecution of former New South Wales state MP Eddie Obeid, the laws designed to prevent corruption among government officials are rarely enforced.

This can be viewed two ways. One is to argue corruption isn’t occurring because the laws work as a deterrent. The better view is the law makes it almost impossible to prosecute corruption, owing to difficulties with investigation, evidentiary rules and the burden of proof. The phenomenon of the revolving door complicates these problems exponentially.

Intemporal conflicts of interest

Consider this hypothetical. If a minister benefits from a decision immediately, it is in breach of their code of conduct. It may also be in breach of the law.

A delayed benefit, however, is more likely to escape legal restriction and scrutiny. The official is no longer bound by their code of conduct, and it is too hard to prove a criminal act.

The acts of receiving $1 million and thereafter conferring a political favour can be readily associated for the purposes of prosecution. However, it is far harder to associate the same political favour with a job offered many years later, following retirement, that pays $1 million as “salary”.

The deck is very stacked in that sense. All former government officials deserve the presumption of innocence and many may well accept private sector jobs, or positions as lobbyists, for innocuous or even altruistic reasons. But even in these scenarios, the conflict of interest remains.

This is in part illustrated where ministers from the most recent era of Labor governments have left their positions to work as lobbyists, often for industries directly tied to their portfolios.

Ministers, in particular, can use their access to help their clients, but they also create conflicts of interest that become apparent only after they leave office.

Take, for example, former senator Mark Arbib going to lobby for Crown, or the former resources and energy minister, Martin Ferguson, lobbying for … the resources and energy sector.

Arbib and Ferguson are not alone; the problem is rife. Former Howard government ministers went on to work as lobbyists in prolific numbers: Nick Minchin, Mark Vaile, Michael Wooldridge, Peter Costello, Richard Alston and Peter Reith, among others, went on to become lobbyists despite these delayed conflicts of interest.

Reith, a former defence minister, offers a most interesting example. He joined Tenix, a defence and logistics firm, after retiring in 2002. Tenix had won an important supply contract when he was minister in 2001. It went on to secure numerous other defence contracts while he lobbied for the firm.

We assume Reith acted perfectly legally. But that’s the problem – the law is inadequate.

(Partially) closing the door

In a representative system, lobbyists fill an inevitable and important role.

However, their ability to gain disproportional access to decision-makers means non-profit organisations, let alone the hoi polloi of the Australian electorate, are not given anywhere near the same ability to converse, dine and wine with their own government. The revolving door dramatically compounds this problem.

And while politicians decide on contracts worth billions of dollars, there is significant incentive (however fulfilled or unfulfilled it may be) for corporations to act nefariously and try to use government for their own gain.

The proliferation of lobbying, the loopholes that allow conflict of interests, and the lack of rigorous regulation and oversight make it impossible to calculate just how much money the taxpayer loses when officials decide to put their self-interest ahead of public duty.

As radical as it may sound, the revolving door may need to be legislatively closed, at least for ministers. Those who take high elected office, well-paid and prestigious as it is, must remember they are public servants. They should not then accept positions that create clear conflicts of interest.

If that means forgoing the astronomical financial windfall of accepting work as a lobbyist at their retirement, the parliamentary pension is hardly cold comfort.