Report on incoming Central Bank governor due in New Zealand

Gabriel Makhlouf’s allegations of hacking sparked political furore last month

New Zealand’s treasury chief Gabriel Makhlouf:  he is due to become the Irish Central Bank’s new governor

New Zealand’s treasury chief Gabriel Makhlouf: he is due to become the Irish Central Bank’s new governor

 

The result of an inquiry into charges that incoming Central Bank of Ireland governor Gabriel Makhlouf misled the New Zealand government is expected later this week.

Mr Makhlouf, who is set to leave his job running New Zealand’s treasury on Thursday, claimed last month that budget details had been hacked from the department’s computer systems despite advice to his staff from the Government Cyber Security Bureau that this was not the case.

It emerged later that the treasury department had mistakenly uploaded the sensitive information to its website in advance of the budget’s official release, and that the opposition National Party accessed the data through a search engine without breaking the law.

It is understood the New Zealand state services commission is on track to report the result of an investigation it called into Mr Makhlouf ’s conduct and the question of whether he misled senior government ministers before he leaves his post.

Mr Makhlouf’s allegations of hacking sparked a political furore last month, when details of the budget were published early by the opposition. He claimed the data had been “deliberately and systematically hacked”, advice that he gave to finance minister Grant Robertson, who then issued a press release that repeated the claim.

The statements triggered a frantic effort by the head of the government’s cybersecurity bureau, Andrew Hampton, to contact senior ministers to alert them to his view that no systematic hack took place. Earlier in the day, bureau staff had advised treasury its computer network had not been compromised and suggested that the matter be referred to police.

Mr Makhlouf continued to repeat the allegation of hacking in media interviews the following day.

“Imagine you’ve got a room in which you’ve placed important documents that you feel are secure, that are bolted down under lock and key,” he said. Somebody had found a weak bolt and attacked it, “deliberately, repeatedly, persistently.”

Call for resignation

Simon Bridges leader of the National Party accused Mr Makhlouf of trying to “cover-up treasury incompetence,” and called for his resignation.

The New Zealand taxpayers’ union also called on Mr Makhlouf to resign, and on Monday it pressed state services minister Chris Hipkins to confirm the commissioner is on track to announce the results of his investigation by Thursday.

“If the investigation’s findings aren’t made public until after Mr Makhlouf ’s departure, it is unlikely that taxpayers will see any real accountability or explanation from one of the country’s highest-paid public servants,” executive director Jordan Williams said.

Earlier this month, government officials threw an awkward farewell celebration for Mr Makhlouf at the Beehive, the executive wing of the New Zealand parliament buildings where the prime minister and cabinet ministers have offices.

In his speech, Mr Robertson said it was a chance to acknowledge Mr Makhlouf ’s role in the wellbeing budget, “notwithstanding the current situation”.

Mr Makhlouf said he was proud to leave the books in order and proud to call himself a New Zealander. He made no mention of the ongoing investigation.