In this story

It was on April Fools’ Day 1997 that a group of Labor Party staffers set out to change the way the political lobbying business operated in Australia.

They determined not to be just another public relations company that also did some work with government. They would be all politics, all the time.

Nor would they try to work both sides of the political street. A lot of lobbying outfits employ former politicians and political staffers, but try to spread their influence by having some from each side. Not these guys.

“We were going to be totally partisan,” says one of them, former Kim Beazley staffer Justin Di Lollo.

“All you have to do to become a lobbyist is fill out a form. There’s no ethical check. We make a mistake in thinking lobbyists are an acceptable part of our democratic process.”

So was born Hawker Britton, named after its two principals Bruce Hawker and David Britton, the first a former chief of staff to New South Wales premier Bob Carr and the second Carr’s senior media adviser.

Between them, the line between those in government and those seeking to influence it was further blurred. “We are sometimes unkindly called the privatised wing of the Labor Party,” says Di Lollo.

Unkind but not unfair.

The business model proved to be very successful, and success encourages imitation. So now we have a conservative equivalent, named Barton Deakin, whose collection of party old boys is even more impressive, particularly as Hawker and Britton have since left the company that bears their name.

Barton Deakin’s chairman, Peter Collins, was once Liberal leader in NSW. But the real big cheese, the really connected bloke, is Grahame Morris.

Over more than 30 years’ association with conservative politics, he has served three federal leaders – Alexander Downer, Andrew Peacock and prime minister John Howard, to whom he was chief of staff. He is also a consummate machine man, having held senior organisational roles at state and federal levels and worked on more than two-dozen federal campaigns. It’s unlikely there would be a conservative politician in the country who would not welcome Morris if he knocked at the door.

But let us return to the story of Hawker Britton, the originators of the hyper-partisan lobbying model.

Hawker Britton people could not be described as “ex-Labor” or “Labor-aligned” lobbyists. They never stopped being party players. They were by turn corporate advisers and party strategists, and often both at once. People moved from positions with the party to positions with the firm. They moved the other way, too. Eight Hawker Britton staff have gone on to sit as Labor parliamentarians. Sam Dastyari is one. Many more have become senior staffers.

They are also big donors. Over the years, Hawker Britton has tipped several hundred-thousand dollars into Labor coffers. The outfit spread from NSW to Queensland, then Victoria, Western Australia and South Australia. In each case they worked on the campaigns, helped win the elections for Labor, and then set up office, drawing down the political capital they had built up as campaigners, to help their clients. They were very successful.

“In marketing they talk about ‘category killers’,” says Di Lollo. “We were category killers. We basically owned the jurisdiction when Labor was in government. The problem is that exactly the same thing which makes you the best company in town when there’s a Labor government makes you the worst company in town when there’s not a Labor government.”

They understood this from the start. New staff members were warned, and still are warned, that their jobs were contingent on election outcomes. When Labor lost, people were made redundant.

“We were prepared to go down with the ship,” says Di Lollo. “We never even conceived we’d want to keep our jobs.”

Hawker Britton’s fully political business model also meant that for 10 long years after its establishment, while the Howard government held power, the firm had “essentially no presence in Canberra”.

“But we took over the market within weeks of Rudd winning government,” Di Lollo says. “And for a while we were in a very happy state of having Labor governments wall to wall.”

Those were the days when across the nation Hawker Britton people could knock on just about any door in government and be assured the occupant would be receptive to them and their client.

The same now goes for operatives from Barton Deakin. Just like the Labor firm, the conservative one is a generous political donor. Over the past five years, according to Australian Electoral Commission records, it has given $130,000 to the Liberal and National parties.

No doubt they can afford it. These are good times for Barton Deakin, with the Abbott government in Canberra and Mike Baird’s Coalition government utterly dominant in NSW.

And here’s the kicker: though they might appear to be natural enemies, though they have no common staff and have separate listings with the corporate regulator, the two lobbying concerns share a couple of important things other than an operating model.

First, clients: they regularly refer clients to one another. But second, and more importantly, they share an owner.

The most politically connected company in Australia is one most people would never have heard of.

Its name is STW Group, and it is Australia’s largest marketing company. It owns about 75 businesses: PR firms, research companies, marketing PR, web design, all manner of communications and content outfits, and political lobbyists. Apart from the two we’ve already detailed, there is one more big one, Parker & Partners, which is nominally bipartisan but in reality more Liberal-connected.

Di Lollo explains that STW acquired Hawker Britton almost a decade ago, “but as savvy operators they could see the big flaw in the business model”. They asked him to establish a conservative equivalent, an “evil twin” as he calls it. And in December 2009 Barton Deakin was launched.

So now Di Lollo carries the title of head of government relations companies for STW Group, which means he no longer has to worry about “going down with the ship” if the government changes. His boat floats whether the political tide flows for Liberal or Labor.

1 . Tip of the iceberg

There are 270 lobbying firms and 615 individual lobbyists now listed on the federal government’s register – or nearly three lobbyists for every elected representative. But the numbers who turn up on Australian registers are only the tip of the lobbying iceberg, and the reason that Di Lollo can legitimately claim to represent the slightly more transparent end of the business.

Current laws, vague and toothless as they are, cover only so-called third-party lobbyists. They do not cover in-house lobbyists, of whom there are far more.

Thus you won’t find the name of Martin Ferguson, for example, the former resources minister who left politics to work for the resources industry. Nor Mark Arbib, the former Labor factional chief and federal minister, who went off to advocate for James Packer’s gambling empire. Nor Gary Dawson, chief executive of the Australian Food & Grocery Council, who was a former senior staffer to John Howard. Nor the thousands of others who did not hang up their shingles as freelance lobbyists, but went to jobs with individual companies or industry groups where their function is essentially the same.

Nor will you find on the register the legal firms who intercede on behalf of their clients. We saw an extreme example of such an intervention made public this week, in the ABC Four Corners story on Tony Madafferi, who was slated for deportation from Australia to Italy on the basis of police evidence that he had been involved in “substantial criminal activity”, including murder for the Mafia.

A senior Liberal Party operative arranged a meeting with then-immigration minister Philip Ruddock. A lawyer for Madafferi turned up to try to persuade Ruddock to stop the deportation.

Ruddock was reportedly furious and threw them out. But subsequently, after more lobbying and donations to the Liberal Party slush fund, The Millennium Forum, the deportation order was overturned by Ruddock’s successor, Amanda Vanstone.

“When even the Mafia now have lobbyists, it highlights the need for reform,” says Greens senator Lee Rhiannon. “A starting point would be some consistency. In-house lobbyists should be bound by the same rules as third-party lobbyists. We should be tightening up rules of disclosure of who meets whom. The diaries of ministers should be made available so we can see who ministers meet.”

And not just ministers. As she points out, backbench MPs can also have powerful influence over government decisions. So can minor players on the crossbenches. So can senior bureaucrats, who also are targeted by lobbyists.

Mark Ogge, principal adviser for progressive think tank The Australia Institute, reckons the mining industry spends about $50 million a year trying to buy influence.

“And most of that is done in-house, not by third-party lobbyists. They wine and dine every relevant staffer and bureaucrat. Increasingly, resource departments see themselves just as an arm of industry. There is a revolving door of people who work in the bureaucracy one day, resource industry the next.”

And it is largely unregulated.

2 . Tracing the history

Di Lollo says the history of all various lobbyist regulation can be traced back to Western Australia and disgraced former Labor premier Brian Burke. “It was in the time of the Gallop government and the motivating idea was how they would stop Brian Burke from lobbying. So they came up with a scheme to stop Burke. But it didn’t have at its heart a pure public policy principle.

“There should be one national scheme designed in a way that is transparent about the way the entire government-exposed sector deals with government. What we have now does very, very, very little.”

Indeed the existing registers are more intriguing than informative, as Mike Daube, professor of health policy at Curtin University, attests.

He became interested while seeking information on the lobbying representatives of tobacco, alcohol and gambling interests and wound up making a submission to a parliamentary inquiry a couple of years ago. It was a waste of time, he says. “It was a 10-minute job: the conclusion seemed predetermined.”

His trawling of the various registers showed all sorts of odd relationships: lobbyists owned by other lobbyists; lobbyists who lobby on behalf of other lobbyists; lobbyists who were subsidiaries of corporate consulting or advertising firms, but who did not (because they are not required to) list the clients of those related firms; lobbyists who represent clients with apparently conflicting interests, such as welfare agencies and booze companies.

What they mostly don’t show, though, was important information about the scale of the lobbying effort, a record of meetings, the historical record.

“So even if you were lobbying a month ago but aren’t now, it doesn’t show,” Daube says. “And it’s virtually impossible to get that information.”

Some jurisdictions are slightly better than others. Queensland gives a little history. NSW – largely as a result of the work of the state’s Independent Commission Against Corruption – now provides some detail on ministerial meetings with vested interests.

“I’m not against lobbyists,” Daube says. “They have been around forever. Moses was probably lobbied to get one or two of the Ten Commandments dropped. But I do think there should be much greater transparency, particularly for lobbying by commercial interests, and even more particularly for those promoting harmful products. There should be one national register. We should not be fobbed off with processes and registers that are close to meaningless.”

Geoffrey Watson, SC, whose work as counsel assisting ICAC has given him a close understanding of the way the business works, is much harsher. He sees the very word “lobbyist” as a euphemism, in many cases, for “scumbag crook”.

“We seem to have thought the registration of lobbyists was one step to making them an acceptable part of the process. Like registering travel agencies, to give them a specious credibility.

“But all you have to do to become a lobbyist is fill out a form. There’s no ethical check. We make a mistake in thinking lobbyists are an acceptable part of our democratic process.”

The reality of their operation is that they are integral to the money-go-round of the electoral funding system, based on the offensive notion, Watson says, “that there is an implied freedom under our constitution that extends to allowing wealthy people to use their money to buy access”.

But finding a solution is hard. “In NSW they’ve introduced some processes, but what if you [the minister being lobbied] don’t put it in your diary or put it in your notes? There’s no real way of knowing when one of these people is at someone’s 40th birthday party, if he’s lobbying or just having a good time.”

Watson, like Rhiannon, like many others, has come to the conclusion that what is needed is not just closer regulation of lobbyists – including in-house lobbyists – but electoral funding reform to severely limit political donations. And the establishment at a federal level of an equivalent to ICAC.

The conservative parties are resistant to each of these reforms. The Greens support both. Labor supports limited campaign finance reforms.

Labor is split on a federal ICAC. Shadow Attorney-General Mark Dreyfus is apparently keen. Shadow Special Minister for State Gary Gray, who worked as a lobbyist after his stint as federal director of the Labor Party and before his entry to parliament, is opposed.

Heaven knows why, particularly given Labor looks these days so much like the “me too” party, too timid to boldly differentiate itself from the conservative government.

We can only assume someone is lobbying hard against it.