Thursday 22 August 2019

New Zealand government launches investigation into whether incoming Central Bank governor Gabriel Makhlouf misled about alleged hacking

Gabriel Makhlouf, formerly New Zealand’s treasury secretary. Photo: Vivek Prakash
Gabriel Makhlouf, formerly New Zealand’s treasury secretary. Photo: Vivek Prakash

Donal O’Donovan

The New Zealand government has launched an investigation into whether incoming Central Bank of Ireland Governor Gabriel Makhlouf misled the New Zealand government about alleged hacking of the country’s budget last week.

New Zealand State Services Commissioner Peter Hughes, head of the body that oversees the country’s civil service, has officially confirmed he will look into whether Mr Makhlouf misled the government about how the budget information was accessed.

New Zealand's Treasury Secretary Gabriel Makhlouf was last month selected by Finance Minister Paschal Donohoe to succeed Philip Lane as Governor of the Central Bank of Ireland. He's due to take up the post in September, but in the meantime has become embroiled in a furore in New Zealand – where he heads’ the equivalent of the Department of Finance - after opposition members of the parliament there were able to access copies of the national budget in advance.

Gabriel Makhlouf called in the Police, and issued a statement citing advice from the National Cyber Security Centre (NCSC), an arm of the Government Communications Security Bureau (GCSB).

Read more here: New Central Bank chief forced to call police after leak of New Zealand budget 

New Zealand's treasury department had been deliberately hacked, Mr Makhlouf said.

"The treasury has gathered sufficient evidence to indicate that its systems have been deliberately and systematically hacked," Mr Makhlouf said in a statement.

It later emerged that the information had in fact been available on the Department website, and there had not been a hack.

New Zealand’s Prime Minister Jacinda Ardern has said the apparent disconnect between the statement and how the budget leaked was something she expected State Services Commissioner Hughes to look into.

In his statement, Mr Hughes said the investigation will look into recent questions raised concerning Mr Makhlouf, "and his actions and public statements about the causes of the unauthorised access to Budget material".

"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."

Read more here: Incoming head of Central Bank calls in police after New Zealand budget leaked  

Deputy State Services Commissioner, John Ombler QSO, will lead the investigation.

"Mr Makhlouf believes that at all times he acted in good faith," Mr Hughes said.

"Nonetheless, he and I agree that it is in everyone's interests that the facts are established before he leaves his role on June 27, if possible. Mr Makhlouf is happy to co-operate fully to achieve that."

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