Kiwiblog

I was very pleased to see Michael Swann get nine and a half years jail for his unprecedented fraud of $17m from taxpayers through the Otago District Health Board.

Despite what he says, he has shown no remorse. His pitiful attempts at a defence, that his company did deliver the services contracted showed that. At least Kerry Harford admitted guilt and remorse early on and his sentence of four years three months is about right also.

Look at Harford arguing to the end that what he did nas not so bad:

Mr Haig took issue with the victim impact statement which said the defrauded money could have been used for surgery or more nurses.

“My instructions are that is completely wrong. The money that was taken was health administration money.”

While there was no denying much of the money had been spent on property – “not spectacularly luxurious property I might add” – boats and cars, there was “no real champagne lifestyle”.

I hope the Parole Board don’t let him out halfway through. I don’t detect one hint of remorse.

The ODT editorial says:

First, the crimes of Swann, especially, were those of cunning calculation, carried out from a position of absolute trust and significant authority, involving a sum of money unimaginable to most people. …

Second, Swann and Harford robbed a public institution, not some private enterprise, and thus stole from all taxpayers, rich and poor.

Third, the institution was a hospital board, that is to say, an entity dedicated to the sick and injured, where no “profit” is expected and where every cent of income is desperately important – literally life-saving.

In the annals of so-called “white collar” crime in this country there has been no more despicable example.

One aspect of the editorial scares me:

As to the difficulty of establishing its criminality, it is notable that when first presented with suspicion of what seemed initially to be highly complex circumstantial evidence, the Dunedin police declined to investigate.

The Serious Fraud Office, with its special skills and powers, was finally the agency to put Swann and Harford behind bars.

The Police would not investigate????

And Labour tried to abolish the SFO and transfer its functions back to the Police! Thank God for a change of Government.

The Herald reports today that the Police have rejected the NZ First complaint against the Director of the Serious Fraud Office. They were very upset that he told the truth to the Privileges Committee about the funding of the $40,000 Peters paid Clarkson. It showed that both Peters and Henry had given false evidence to the Privileges Committee, so no wonder they were upset.

But this got me thinking about the Police, and the election. The Electoral Commission has referred multiple alleged offences to the Police this year, and with one exception (the false donation returns from NZ First) it has not announced an outcome for any of them.

The earliest referral was on 27 June in relation to unauthorised banners in Tauranga. This was as simple a case as you can get. How is it the Police have not been able to reach a conclusion in six months?

There was also the Progressive adverts referred on 1 August, the EMA adverts on 26 August, the late Social Credit donations return on 4 Sep 2008, and a further Progressive ad on 18 Sep 2008.

It is difficult to not conclude that the Police just have no interest in enforcing electoral law (as they showed in 2005), when they can’t even make a decision within six months on an unauthorised billboard.

I am totally unsurprised by the outcome of the Serious Fraud Office inquiries into the Spencer Trust. And the outcome is in no way a clearance or an exoneration. What it says is laws have been broken, but not fraud laws.

NZ First’s failure to obey the electoral laws of New Zealand is what made the investigation occur. Because the public facts were that Bob Jones had stated he had made a $25,000 donation intended for NZ First, through the Spencer Trust, and the NZ First Party had filed a donations return saying it had not received any donations in 2005 of over $10,000. To quote the SFO:

There were two competing explanations for how this could be.

1. The Spencer Trust never passed the money onto NZ First, which would be possibly fraudalant
2. The Spencer Trust did pass the money onto NZ First, and NZ First filed a false electoral donations return

No 2 was always far more likely. And thanks to the SFO investigation we now know this is true. In fact we know that NZ First has filed a series of false returns, as has Winston Peters personally, and Peters has lied on multiple occassions about these returns, including giving false information to the Privileges Committee.

This is no case of an accidential omission on a return, due to Mrs Muggins the branch secretary. This was a strategy signed off by the Leader. Let us look at the multiple false returns and statements:

1. A false donations return for 2005
2. A false election expenses return for 2005
3. A false donations return for 2007
4. A false return on the Register of Pecuniary Interests for 2006 (Payment of debt to Bob Clarkson for Peters)
5. A false return on the Register of Pecuniary Interest for 2006 (Payment of debt to David Carter for Peters)

Now these are not just mistakes or errors. Only because of the SFO investigation has this come to light. And it gets even worse. Most semi-honest people would, once they had been caught out, would at least reveal all. But no Peters does not.

He was instructed by the House of Representatives to file amended pecuniary interest returns for 2005, 2006 and 2007. And all he did was amend them to include the two donations that had already been publicly forced out (Owen Glenn and Spencer Trust for Clarkson) but he didn’t declare the $13,640.37 the Spencer Trust paid on his benhalf to David Carter in 2006. These are the actions (assuming Weekend Herald is correct) of a pathological liar, not a cleared man.

And on that issue, it sounds like Eye to Eye at 11.30 am on Sunday will be interesting watching as Matthew Hooton is on the panel with Peters as the guest. Quoting Roar Prawn:

TVNZ sources say that Willie Jackson’s Eye to Eye tomorrow will be one of the most fiery TV debating shows ever seen in New Zealand.

Winston fronted up to the Green Room, last night to tape the show that airs on 11.30 on Sunday on TVNZ, thinking he would be up for a cosy chat with his mates Barry Soper and Chris Trotter.

He was high on hearing that the SFO had dropped criminal charges, but he was less than impressed when he realised that Jackson had decided to replace Trotter with Matthew Hooton.

Hooton won’t talk about the encounter but BustedBlonde’s media sources say that Winston tried to bluff his way out of appearing with Hooton, . saying there was no way he was going to be with someone who called him a liar.

Before they even got on air, we understand Hooton then called him a liar, a crook and a lying c***t straight to his face.

Anyway, things didn’t get much better on air, and the air was so blue Jackson had to stop the pair at one stage and re- record the show.

Our sources say that Winston always wins these debates on points but Hooton had him on the ropes more than once refusing to kowtow to the liar (our words)

Our sources say it was one of the most brutal encounters they had ever witnessed on NZ television.

That is very typical of the mischievous Willie Jackson – invite Peters on and then have Hooton on also. Can’t wait to see it.

QC Jim Farmer has criticised Helen Clark and Michael Cullen for their attacks on the Director of the Serious Fraud Office. Farmer is a past president of the Bar Association.

Jim Farmer said criticism of Mr Liddell’s judgment by Prime Minister Helen Clark and her deputy, Michael Cullen, was wrong and unwarranted.

Mr Liddell’s evidence was uncovered in the SFO investigation and showed that Mr Peters had a $40,000 debt paid for him by the Spencer Trust, contradicting his version that he paid it himself.

Dr Farmer said Mr Liddell had a simple choice: whether it was responsible to “sit on” relevant information, or to hand it over.

And Labour wanted the information supressed, because it reveals that Peters broke the Cabinet Manual and Register of Interests even more blatantly than in the Owen Glenn case.

“He has obviously taken a responsible decision. It is very defensible on its merits and it doesn’t warrant attack from politicians, particularly personal attacks in the form of saying he has poor judgment.”

Dr Farmer may not understand that for Clark and Cullen, a public servant exercises poor judgement if they do not act in the best interests of the Labour Party, as opposed to acting in the public interest. You see they have convinced themselves that nothing is more important for the public good than them remaining in power, so anything that may damage that is automatically poor judgement by the public servant involved.

Dr Farmer said there was no formal requirement for Mr Liddell to consult Crown Law and he had “no idea” why Helen Clark and Dr Cullen were suggesting this.

“In carrying out the investigative duties, the SFO and the director are intended to be independent and operate without influence from anyone,” he said.

“Running off to Crown Law or the Solicitor-General to get advice – or approval, if that’s what Dr Cullen is suggesting – doesn’t seem to be obvious or even right.”

Indeed. And in fact a growing number of Government Departments no longer even use Crown Law for their legal advice or representation in court.

This is amazing. Rodney Hide has just questioned Helen Clark on whether she is happy with the $40,000 donation to Peters from a donor through the Spencer Trust. Peters tried to block it half a dozen times but he finally got to ask it.

Clark’s response was she has not seen the wiring diagram from the SFO that was in the Privileges Committee report.

So the PM has not even bothered to read the report. This takes her hear no evil, see no evil to new levels. That $40,000 strikes cast grave doubt on the integrity of decision making around the racing portfolio and the PM declares she hasn’t even looked at the evidence.

I mean seriously just when you think the standards can not drop any lower, they do.

So Helen Clark has cleared Winston Peters from any wrong doing, and she did it without even needing to read the report of the Privileges Committee. She will presumably be voting against the report – also without reading it.

Two fascinating comments from Cullen, according to NZPA:

Attorney-General Michael Cullen says the Serious Fraud Office’s judgment over releasing information to a parliamentary inquiry is questionable.

Not really, but Michael isn’t a lawyer so doesn’t understand the concept of law over politics.

But let us think more about this. The SFO has revealed the then Foreign Affairs Minister lied to the Privileges Committee. Also that he had an undisclosed $40,000 donation. And is our Chief Law Officer concerned about the content? No – not at all. He is just concerned that the SFO revealed the truth.

He also raised concerns over the SFO decision to investigate New Zealand First donations at a time when its future was being decided by politicians.

And here we have partisan hypocrisy. The SFO invstigated the National Party just prior to the 2002 election. Was he concerned about that? of course not.

Cullen also says:

This morning Deputy Prime Minister Michael Cullen said Mr Peters would not be reinstated to his ministerial portfolios before the election which is to be held on November 8.

Now this is significant. The suspension from portfolios was due to the SFO inquiry only. Cullen is now sayign even if the SFO clears him, they will not reinstate his protfolios – yet they will keep him on as a Minister without portfolio and all his baubles.

Isn’t that ridicolous?

Having now seen the evidence from the SFO, it is no surprise that the Prime Minister is furious that they told the truth to the Privileges Committee. Clark is still questioning the judgement of the SFO Director, and complaining he did not consult Crown Law.

Apart from the fact there is no requirement he do so, I say thank God he didn’t. Crown Law would have informed the Attorney-General who was moonlighting as Co Chief Defence Counsel for Winston Peters at the Privileges Committee.

Look at who the Director did consult:

1. The Clerk of the House of Representatives
2. The Auditor-General (who is empowered to investigate matters relating to the Register of Interests)
3. A QC

There really is no question that the Director acted properly. Those suggesting he did not, are trying to divert attention from the devastating evidence he provided. You see we learnt that the Spencer Trust did not just deliver money to NZ First, but to Winston Peters personally by paying off a $40,000 debt of his.

ACT tried to get the Privileges Committee to further investigate the Spencer Trust after the SFO investigation. And they are right that the issue of secret donations through the Spencer Trust to pay off a $40,000 debt of Peters is of massive concern.

The reason the PM is so furious is because the SFO evidence directly calls into question the integrity of decision making in her Government.

It is hard to not conclude that the ultimate donor of the $40,000 was the Vela Family. The descriptions in the SFO report strongly suggest that. And the Vela Family make much of their money from horse racing.

Now I am not suggesting the Velas had bad motives with their donations. I support their right to donate to parties they support. But there is a massive difference between a donation to a party and a donation or gift to an MP personally. The former is absolutely common. The latter is unheard of in NZ at the level of $40,000.

Winston Peters got the Government to give a lot of money to the racing industry. He had to persaude Clark and Cullen to ignore Treasury advice and go along with his plans for the Giovernment to provide prize money for some horse races.

Now if he was the personal beneficiary of a $40,000 donation (through paying his debt) from racing industry figures, then that absolutely 100% had to be disclosed. In fact the Prime Minister has to approve retention of any gift over $500 this is such a serious issue for Ministers.

Consider how scandalous this would be in a different portfolio.  Let us say Winston was Minister of Health and he persuaded Cabinet to fund a new drug against the advice of Pharmac. And then it turned out the drug company that manufactures that drug had given him $40,000. You start to get the idea of how serious it is.

The PM needs to urgently find out whether that $40,000 was in fact donated by the Velas. The secrecy of donations through trusts (a practice I sumitted to Parliament should end incidentially) has only ever applied for donations to political parties. There can be no secrecy for donations to Ministers of the Crown.

As people will have read, NZ First is outraged that the SFO has revealed to the Privileges Committee that the evidence given by Peters and Henry is false. I mean shame on the SFO – how dare they reveal the truth. What sort of law enforcement body do they think they are.

So NZ First have complained to the Police about the SFO. Now this is of course a media stunt -designed to maybe convince the most stupid 5% of the electorate. For the benefit of the other 95%, I’ll link to Dean Knight – a public law specialist at Victoria University.

Dean makes four points:

1. s39 of the Serious Fraud Act does not apply as the information given to the SFO was not protected under some other Act (which is linked to the SFO’s coercive power to require information protected under other legislation)
2. s36 might apply as it refers to a wider set of information but 36(2)(e) allows the Director to disclose to “any person who the Director is satisfied has a proper interest in receiving such information” and Dean says a committee of Parliament fits this definition
3. Regardless the letter to the Privileges Committee is covered by parliamentary privilege under the Bill of Rights 1688
4. Those complaining about the letter may be in contempt of Parliament as Standing Order 400w includes ” assaulting, threatening or disadvantaging a person on account of evidence given by that person to the House or committee”

So Peters and NZ First may be in contempt of Parliament (again) due to their attacks on the SFO for telling the truth to the Privileges Committee. If Parliament wasn’t about to dissolve, it would be worth an MP writing to the Speaker about!

The implicit attacks on the Serioud Fraud Office Director by Clark and Cullen (and Peters) are really final proof that this is a Government that thinks they are above the law. There is a very disturbing pattern of abuse directed towards senior officials who ever draw attention to the fact someone in the Government is breaking the law.

Here’s five examples:

1. Helen Clark attacked the Police for the investigation of her for forgery in Paintergate
2. Labour attacked the Chief Electoral Officer for stating the 2005 pledge card was an election advertisement and referring them to the Police
3. Labour and allies launched a sustained campaign of vilification against the Auditor-General for whistle blowing on their illegal use of taxpayer funded parliamentary budgets
4. Just last week Jim Anderton attacked the Electoral Commission for referring him to the Police for a possibly illegal election advertisement
5. The refusal of Clark and Cullen to express confidence in the Director of the Serious Fraud Office while the SFO is investigating one of her Ministers on serious or complex fraud allegations

Now consider this. The evidence the SFO seemingly gave to the Privileges Committee was that one of Helen’s Ministers lied to the media, lied to the public and gave a false statement to the Privileges Committee. This is an incredibly serious thing. The only reason it isn’t perjury is because they never swore their statements under oath.

Labour resent being held to account by the laws of this land. Whenever laws are broken they attack the law enforcement agencies. This goes well beyond a third term born to rule attitude. It is a sense of entitlement and being untouchable that is repugnant.

The NZ First President is reported to have complained to the Police about the SFO. This is a media stunt designed to hide the fact that the evidence the SFO is meant to have revealed is devasasting for Peters and Henry’s credibility. The NZ First President should in fact be thanking the SFO – he was one of those who knew nothing about the Spencer Trust before they shed light on it.

Ross Meurant has said he will be returning to NZ and will speak to the SFO, if they wish to speak to him.

It will be good if he does this promptly, because it is in everyone’s interest to get these matters cleared up as soon as possible.

Audrey Young has a very useful blog entry analysing what Winston says now, and what he said before the truth came out.

As readers will know, Winston is outraged because the SFO passed on evidence to the Privleges Committee that proved Peters and Henry lied. In Winston’s world it is outraegous if law enforcement agencies expose his lies.

Audrey notes:

Peters confirmed that the Spencer Trust had reimbursed his lawyer Brian Henry the $40,000 Henry had personally paid for costs awarded against Peters in the Tauranga electoral petition, talking to drive-time host Larry Williams on Friday night:

This is quite crucial because if anyone but Peters paid that $40,000 debt then beyond doubt that had to be declared on the Register of Pecuniary Interests.

”Mr Henry paid the money initially. He was later reimbursed out of the trust account from the Spencer Trust funds. In that sense yes,” Peters said. ”But that was a trust to assist the New Zealand First Party and any actions it might take. What’s wrong with that?”

What is wrong is Winston failed to disclose this. Just as NZ First failed to disclose donations from the Spencer Trust.  This is not a series of one off “mistakes”.

The great service done by the SFO investigation has been to expose the failure of NZ First and Peters personally to disclose funding from the Spencer Trust. And in case anyone really thinks it was all a mistake – consider the fact that these “mistakes” only came to light due to the SFO. Peters did not at any stage move to correct on his own initiative his public statements. He only admits to something once law enforcement agencies pry it out of him.

It means that the information Peters gave in a speech on August 20 to supposedly “clarify” what had been said about the $40,000 at the privileges committee two days earlier was actually not true.

“Mr Henry paid the money [$40,000] to ensure the bill was paid in time – and he was later reimbursed by myself,” Peters told Grey Power in Upper Hutt.

“He checked his records yesterday and found this was indeed the case.”

A clarifying letter was sent to the privileges committee to that effect.

People should be very aware of this point. The lie which has been exposed by the SFO is not about what was said at Privileges Commitee in response to Russel Norman. Most people would accept that you could be mistaken when responding to an unexpected query on the spot.

But what we have here is Peters claiming two days later, in a formal speech, that he had “checked the records” and Peters had reimbursed Henry. And they were so certain of this info, they sent a letter to the Privileges Committee stating this.

Their claim and letter was false. The Prime Minister once again keeps Winston with his baubles of office despite the fact he has been exposed at deliberately deceiving the public and the Privileges Committee. This was no mistake made in the heat of the moment. It was a statement made two days later which they claimed was based on a check of records.

Peters’ admission about the reimbursement also raises questions about whether the $40,000 should have been declared to Parliament in 2007 in the Register of Pecuniary Interests.

There is no question that it should have been.

We now know the Spencer Trust was run by Winstons’ brother, law partner of his brother and a staff member in Winston’s office. And it paid personal bills on behalf of Peters. So Audrey reminds us of this press conference:

Q: Mr Peters are you seriously saying that people are meant to believe that you don’t know what the ST is used for?
A: Yes I do. You know why? Because those are the facts.
Q: We asked your brother yesterday and he wouldn’t answer the question.
A: Well Audrey you should show a bit of knowledge, experience and a bit of commonsense, right? Go and ask him again.
Q: Who should we ask?
A: You’re entitled to ask it all the questions you like.
Q: But you’re not answering them.
A: How can I answer them if I’m not in charge of the trust.
Q: Because you know what that trust is using the money for.
A: Sorry I don’t.
Q: Really?
A: Well I just said no I don’t.

And as you read what are really bare faced lies (unless you think Winston can somehow not know that the Spencer Trust paid a $40,000 debt on his behalf), remember once again that Helen Clark has no problems keeping Peters on.

Audrey also goes back to the original Privileges Committee hearing when Brian Henry lied and insisted he paid for it personally (you would know the difference between paying $40,000 out of your own pocket and temporarily paying $40,000 and getting reimbursed). He obviously did not want to admit the Spencer Trust effectively paid for it, so in response to an incredulous Wayne Mapp:

Mapp: Are you seriously suggesting that you would’ve paid $40,000 in court costs which were against Mr Peters and you advised Mr Peters of that fact, and that Mr Peters would not have understood that that would’ve effectively come out of the $100,000 – well the donations received?

Henry: Mr Mapp, I’m not ’seriously’ saying it; I am saying it. I’m not suggesting it. I’m telling you exactly what I did…..So don’t slur it – this is what I did. I’d like to finish with Mr Mapp….Mr Mapp I am telling you what I did. So please do not slur it or belittle it by saying ‘Are you seriously suggesting….’ This is actually what I did. You mightn’t like it but that’s what I did.

Such outrage, all faked.

Whale Oil also blogs about further revelations from Spencer Trustee Grant Currie. On radio Currie said that they spent money on behalf of NZ First, after consulting with “someone” who was not a duly elected office holder of NZ First. That someone would be McClay on behalf of Peters I suspect.

You have to wonder if there is a single MP or office holder in NZ First with any spine? The party president didn’t even know of the Spencer Trust. Money meant for NZ First went into the trust, and then spent on behalf of the party bypassing the authority of the NZ First President and Board.

No wonder Peters and Cullen are both highly upset at the SFO.  The Herald speculates that the SFO may have told the Privileges Committee that the Spencer Trust paid the $40,000 court costs that Peters paid Bob Clarkson.

If this is true, it is devastating for Peters and his Labour defenders.

The $40,000 is crucial because there is no doubt it was a debt owed by Winston Peters personally to Bob Clarkson. There is an arguable case about whether money given to Henry is paying off Winston’s debts as Henry claims he never invoices Peters. But there is no doubt over the $40,000.

After Brian Henry testified that he paid the $40,000 to Clarkson, it then became clear that this meant Peters had broken the Register’s rules by not declaring that Henry had paid $40,000 on his behalf. But suddenly two days later Peters and Henry claimed Peters had repaid Henry so there was breach on that issue.

If the Herald is correct, and the Spencer Trust reimbursed Henry for the $40,000, then what does it mean?

1. That Peters broke the rules of the Register by not declaring The Spencer Trust in his annual return.
2. That Peters and Henry both lied when they claimed Peters had paid Brian Henry back
3. That Winston has such control of the Spencer Trust, that he can get it to pay his personal bills

Now in an attempt to divert attention from the evidence, Peters and Cullen are going on about a letter that may have been sent by an anonymous SFO staff member some months ago to Ron Mark, criticising Mark for supporting the SFO being wound up.

It was wrong for that staff member to write such a letter, and they should be given a kick in the behind. However this is not exactly the crime of the century. Thousands of state employees have written letters to MPs on issues affecting their employer – anyone remember thousands of firefighters collecting petitions for a referendum to stop their restructuring? However one does expect a higher level of standards from SFO staff and the Director should kick butt now he knows of the letter.

But for the Attorney-General to refuse to express confidence in the SFO Director, due to the actions of one staff member, is appalling. Make no mistake Cullen is not concerned by the letter – he is aghast the SFO may have told the truth to the Privileges Committee and damaged the Government. Cullen is reacting as an accessory after the fact, not as the Attorney-General.

If the Herald is correct, and the SFO does have information that the Spencer Trust paid (back) the $40,000 debt to Bob Clarkson, it would have been outraegous for them to sit on that information. They are reported as having asked the Auditor-General and the Clerk of the House whether they should inform the Privileges Committee of evidence that contradicts the public version of events by the Foreign Minister. Both agencies presumably said “Of course you should, it would be wrong to allow the Privileges Committee make a decision on false information”.

To say NZ First’s latest explanation fails the Tui test, is putting it mildy. Before we totally dismiss it out of hand, let us look at what they say:

The New Zealand First Party has admited they made a mistake by not declaring a donation they recieved from Sir Robert Jones.

The party is putting the non declaration down to an administrative error which happened at a time when they say there was an extensive changeover in administrative staff, who were new to their responsibilities.

They say the $25,000 donation was correctly banked into the New Zealand First account, along with other donations which were unfortunately overlooked when it came to declaring anything over $10,000.

The latest revelation comes after the Serious Fraud Office obtained Spencer Trust records.

The letter from auditor Nick Kosoof says New Zealand First made an administrative error by not declaring the money.

It says the amount was banked into the party’s bank account in September 2005, and unfortunately went overlooked by error, along with other donations.

This fails the credibility test on so many levels, it is not funny.

1. The TV3 item on the Spencer Trust showed a payment of $50,000 not $25,000 paid to NZ First.
2. NZ First has never ever declared a single donation from the Spencer Trust, so are we to believe that in three years of existence it has only received and passed onto NZ First a singular donation from Bob Jones?
3. NZ First claim to have only had a couple of donations over $10,000 in the last decade, so how one could overlook your largest ever donation since 1996 is beyond belief.
4. Since the Jones donation was exposed a couple of months ago there has been speculation that the NZ First 2005 return may be inaccurate. Why did no one in NZ First check until today?
5. Why is the auditor, not the accountant, explaining the error? Are they the same person as suggested in the NZPA report?

There is a constant pattern here with NZ First – deny the donation until it is no longer credible to deny it, and then suddenly discover it somewhere. They do not deserve any benefit of the doubt. Thank God the SFO is investigating.

Even though they can not be prosecuted under the Electoral Act for the breach, it doesn’t mean that the SFO shouldn’t disclose how many other donations were illegally not declared to the Electoral Commission.

This also poses a challenge for Helen Clark. She has said she will act if there is evidence of illegal behaviour. We now have an admission from NZ First that it broke the Electoral Act 2003 in April 2006 (and maybe again since then). And filing a false donations return is not a minor or technical breach – it is incredibly serious.

Colin Espiner also has some good insights:

I am going to criticise the Prime Minister for something else, however. Her decision yesterday to launch into the Serious Fraud Office and claim the agency tipped off the National Party about its pending inquiry into donations to the New Zealand First Party was extraordinary. I don’t think a prime minister in this country has made such an accusation against a law enforcement agency before. …

It’s difficult to see Clark’s outburst as anything other than a deliberate attempt to undermine the credibility of the agency investigating one of her ministers, whom she clearly wishes to be cleared of wrongdoing as soon as possible. She has gone out on a limb on this one. The attack looks desperate, unwarranted, and unfair.

As Colin says, one can’t even recall Muldoon at his worst attacking law enforcement like Clark has.

Asked whether any of his MPs had met Lord Ashcroft, Key said: “I think so, yes.”

Here’s what Key should have said to Duncan Garner’s first question: “Sure I met Lord Ashcroft. Why wouldn’t I? He’s close to a friend of mine, David Cameron, and I always take the opportunity to meet my counterparts from like-minded parties overseas, as does the Prime Minister.”

It’s this automatic first instinct to avoid an issue that has got National into trouble before. Why wasn’t Key’s meeting with Lord Ashcroft in his diary released to the media? Why not offer journalists the opportunity to talk to the pair? I’m sure he’s an interesting fellow. If the meeting had been released, I could almost guarantee the media would have ignored it.

I agree strongly here. I guess it is easier with hindsight, but the meeting should have been in the diary. It would have prevented any suspicion, by front footing it. Clin provided the perfect response to any questions.

Finally a word on the billboards. So far: Lame. National is missing John Ansell, the man behind the party’s wickedly clever 2005 billboards terribly. Apparently National isn’t Right-wing enough for Ansell these days, and he’s gone off to support ACT – so look out for some clever billboards from them.

Colin must have missed the news that John parted ways with ACT.

There does seem to be a consensus that the first National billboard isn’t particularly good. The most common complaints is it has too many design elements, and is not clearly a National billboard.

Bill Ralston fires at multiple targets, and hard to disagree with him too much:

Ok, you can argue, like Obama, Key is not part of the political establishment but anyone more politically experienced would know you get your staff to run quietly around the gallery comparing you to Obama and then, hopefully, some hack short of a line or two for their column will make the comparison for you.

By doing it yourself you merely look vain and immediately open yourself to ridicule and sneering from Clark and Cullen and, believe me, no-one can curl their upper lip and mock like those two. Which they duly did, in a schoolyard “nah, nah, nan, nah, nah” fashion.

Indeed they did, and Key took the ribbing in good humour in the House today.

There was a big backfire with Clark’s attempted counter-attack on Key’s refusal to work with Winston Peters, Clark first saying he must have been tipped-off about the Serious Fraud Office Inquiry by the SFO then, when the SFO strongly denied it, she said it must be the Police or the Crown Law Office who told him.

So much for her sad attempt to undercut John Key’s long awaited sudden growth of a political spine. He didn’t need a tip-off. I suspect he simply came to the conclusion most of us have already – Winston Peters is completely untrustworthy and a liability to any cabinet he serves in. Three Prime Ministers now have come to that same conclusion (even if Helen had that conclusion forced upon her).

Exactly. The Owen Glenn affair was proof enough.

The Prime Minister just looks desperate, she is guessing (wildly and I believe wrongly), she has just slandered her own public service and she has implied that she is facing some kind of internal revolt by her own top public servants. For someone who has always appeared so in control, so well grounded in maintaining constitutional proprieties, sternly retaining discipline over those who serve her government, Helen Clark has now given us the impression that she is weak, beset by traitors and reactionary forces plotting to bring her down.

Slandered her own public service. Indeed.

By the way, is it only me or are you too immensely amused by Labour aligned commentators and politicians trying to play their violins for Winston Peters?

I know several blogs have been sniggering at poor old Chris Trotter’s convulsions as he tries to extract some sympathy for the NZ First Leader, accusing the media of “pack raping” Winston. Aside from the ghastly imagery involved in that metaphor, dear old Chris seems to have forgotten Winston spent the last 25 years building his career on getting the media to “pack rape” other individuals and institutions he had targeted with the odd leaked document and claims of impropriety.

Those who live by the allegation, die by the allegation.

Touche.

TV3 last night interviewed one of the Trustees of the Spencer Trust. They report:

3 News has been given an extract of the Spencer Trust’s financial records which show a $25,000 donation made by Sir Robert Jones did go to New Zealand first. …

Grant Currie is one of three trustees of the Spencer Trust.

“The only purpose of the trust was to receive donations from supporters of NZ Trust and to pass them to New Zealand First,” explains Currie.

The Trust was formed in August 2005 – its intention was to channel money from donors to New Zealand First.

The statement shows that money along with another anonymous $25,000 donation was paid to New Zealand First less than a month later, on the 7th of September.

“If the allegation is that Mr Jones’ donation didn’t go where he intended it to then it completely refutes that allegation,” says Currie.

Mr Currie is right that that particular allegation does appear to be refuted, if bank records back up their books.

However the problem for NZ First is that these documents prove $50,000 was donated to NZ First on 7 September 2005 from the Spencer Trust. And in all probability, much more than that on other occassions.

And according to the Electoral Commission, NZ First made a nil donation return in 2005.

One the face of it, this is impossible to reconcile, and prima facie the NZ First donations return was false – a very serious matter. The law in force at the time was the Electoral Act 1993. S214G(4) says:

Every secretary of a political party registered under Part 4 who forwards to the Electoral Commission under subsection (1)(a) a return that is false in any material particular—

(a) is, if the secretary forwards the return knowing that the return is false in any material particular, guilty of a corrupt practice and is liable on conviction on indictment to imprisonment for a term not exceeding 1 year or to a fine not exceeding $20,000, or to both; and

(b) is, in any other case, guilty of an illegal practice and is liable on conviction on indictment to a fine not exceeding $20,000, unless the secretary proves—

(i) that he or she had no intention to mis-state or conceal the facts; and

(ii) that he or she took all reasonable steps in the circumstances to ensure that the information in the return was accurate.

So the NZ First Party Secretary may have commited a corrupt practice or an illegal practice. They may argue of course that the money from the Spencer Trust went into a special account controlled by, umm, say the Leader, and they knew nothing about it. This could explain why the NZF Party President says he has never heard of the Spencer Trust – something unlikely if it went into their main bank account.

Now even though the law appears prima facie to have been broken, s226 means they can not be prosecuted for it:

A prosecution against any person for a corrupt practice or an illegal practice shall be commenced within 6 months after the offence was committed

But this is not an issue just of will someone go to jail. Winston Peters needs to explain to the “court of public opinion”. The media needs to demand from NZ First how they can reconcile their nil 2005 donation return with the $50,000 donation from the Spencer Trust.

Now remember Helen Clark and Winston Peters campaigned on financial transparency. Regardless of the SFO findings, does the Prime Minister have no problems with a political party that appears to have filed a false donations return, or multiple false donation returns? How does she reconcile this with her stance on wanting greater electoral funding transparency?

It will be very interesting if the SFO investigation reveals exactly what bank account the $50,000 was paid into. Is it one known to and controlled by the party? Unless it is, then the money may still be found not to have gone to the intended recepient. If it did go into an account controlled by the party, then the donations return is false – you can not have it both ways.

The Herald says the SFO should remain:

There are good reasons to retain the Serious Fraud Office. One of the most obvious was mentioned last week by the Finance Minister, Michael Cullen, when he noted New Zealand was facing the most complex and challenging economic forces for 20 years. The fall-out from this will demand a dedicated fraud-detection agency.

Several commentators have said that in the midst of finance company collapses in entirely the wrong time to abolish them.

To suggest, however, as Progressives leader Jim Anderton has, that this inquiry was initiated by the SFO to serve its own purposes is ludicrous. Even greater depths of shamefulness were plumbed by the Prime Minister yesterday when she claimed it was “almost certain” the SFO tipped off National about its intention to investigate NZ First. The two extraordinary accusations suggest nothing less than a wilful and self-serving Government campaign to undermine the credibility of one of its own law-enforcement agencies.

And what do you call a Government which campaigns against its own law enforcement agencies?

Harsh times inevitably bring to light practices that tend to remain concealed when things are going well. Already, the SFO is investigating the Blue Chip property companies that went into liquidation this year owing $80 million to 2000 investors, and Bridgecorp, a finance company that owes about $500 million to 18,000 depositors. History suggests other probes will follow. This mocks the Government’s claim that substantial white-collar crime is no longer part of the landscape, and that it is safe to dispense with the agency.

But what about the sucessor?

There is little chance that alleged rorts by finance-company executives would be tackled adequately by the police’s Organised and Financial Crime Agency, which, according to the Government plans, would absorb the SFO. The Police Minister, Annette King, has admitted the agency’s focus would “very much” be gangs, as part of a strategy of getting tough on organised crime. The type of investigation typically undertaken by the SFO would not be a priority, and would also be seen as far more onerous than tackling gang activity. Fraud is the the most difficult of crimes to detect and prove its intent beyond reasonable doubt.

Indeed.

Yesterday saw a remarkable series of allegations from the Prime Minister, which I am going to go through in detail. There are two explanations for them:

1. She is a desperate paranoid leader who really thinks her own law enforcement agencies are colluding with the Opposition.
2. She deliberately accused the SFO of leaking, knowing the “media meerkats” would forget all about asking her questions about how she knew “No” meant “Yes” in reference to Owen Glenn’s donation, and instead focus on the SFO instead.

I suspect No 2, as the media did all fall for it. Very little coverage on the Owen Glenn issue. But whether her allegations are desperate or calculating, they are extraordinary to tolerate from the country’s Prime Minister. It almost brings Nixon to mind, railing against the FBI.

Let’s start with her performance on Breakfast yesterday.

I find the National Party statement and timing interesting. Because I would say it is almost certain they got a tip from the Serious Fraud Office that it was about to move.

So Helen Clark can not work out if Winston is telling the truth, but she is “almost certain” that the SFO tipped off the National Party. Does she has a shred of evidence for her claim? No.

And I challenge them directly to come clean on that, because it is a very serious thing if an agency like the Serious Fraud Office is leaking to the Opposition.

It is a very serious thing. Almost as serious as inventing allegations against the Serious Fraud Office. Note that Clark has gone from inventing the allegation to now demanding that the guilty parties come clean on it.

I’m saying they acted on a tip. There was news around Wellington on Tuesday night last week they were about to move. The next day the National Party moved.

This is a classic 2 + 2 = 7. First of all National moved the day Owen Glenn directly contradicted Winston Peters’ version of events, shattering what remained of his credibility. Helen Clark seems to be the only person left in NZ who believes Peters knew nothing of the donation until July. In fact not even she can beleive it because at a minimum she told Peters about it in February.

And as for the PM’s Sherlock Holmes like conclusion that there was gossip in Wellington, so the SFO must be leaking to National, it is more like Inspector Clouseau.

First of all it had been reported in the media that the SFO had been interviewing key parties. Hence it was not surprising that people would speculate that they may launch a formal investigation at some stage. I’d been hearing such gossip for one to two weeks.

Second, Clark overlooks the obvious. That some of those who were interviewed by the SFO, formed a conclusion that they thought a formal investigation was likely, and were saying so – hence the source of the gossip.

Then the SFO responds:

“We do not believe that there has been any leak from the SFO and have received assurances to that end from all SFO personnel involved with the donations matter, and we do not intend to make further comment.”

So is that the end of the matter?

NZPA:

Miss Clark said she had “no option” but to take the SFO’s word.

Good God. She invents a wild accusation with no proof. The SFO talk to every staff member and respond, and her response is to say she has “no option” but to believe them. That is code for saying she doesn’t beleive them, but can’t prove it. And of course she can’t prove it, as she invented the allegation.

The Press:

Late in the day, Clark widened her claims to include two other agencies.

“I have no doubt whatsoever that word seeped out that the SFO was about to make a move,” she said at her post-Cabinet press conference. “Whether it seeped from there or from others in the loop remains to be seen.”

Asked who else was in the loop, Clark said: “Crown Law and the police”.

Now remember, Clark still has not produced a shred of evidence, apart from the fact there was gossip in Wellington (something that happens every day of the year), yet now she claims Crown Law or the Police may be leaking to National.

She said she was not dealing in rumour.

Not dealing in rumour??? She is creating the rumours!!!

The Herald reports

A Crown Law spokeswoman, who confirmed Mr Collins was involved, said he “absolutely did not leak to the National Party, or anyone else for that matter”.

Next Clark will claim it must have been the Cabinet Office, or DPMC or Heather Simpson or anyone at all she can fit up, because Helen is “almost certain” someone leaked to National.

I am trying to think of a parallel where a Prime Minister has just invented allegations against three senior law enforcement agencies, like Clark has. I honestly don’t think even Muldoon acted in such a way.

Finally we do know there was one definite tip-off:

But Helen Clark was also tipped off on Wednesday by Deputy Prime Minister Michael Cullen – who had learned of the impending investigation in his capacity as Attorney-General.

She said she was told late on Wednesday, after Mr Key held a press conference saying a National government he formed was highly unlikely to work with Mr Peters.

Maybe she will accuse Dr Cullen of tipping off National?

The sad thing is the media all played along with her bizarre claims, and let her off the hook on her knowledge of the Owen Glenn donation.

With absolutely no evidence at all, Helen Clark stated on television this morning that the Serious Fraud Office almost certainly leaked to National that they were about to announce their investigation of Winston Peters.

Ben Thomas at NBR has been in contact with the SFO and their response:

The Serious Fraud Office has denied leaking information about its investigation of Winston Peters to the National Party, contradicting allegations made by Prime Minister Helen Clark.

Acting SFO director Gib Beattie said, through a spokewoman:

“We do not believe that there has been any leak from the SFO and have received assurances to that end from all SFO personnel involved with the donations matter, and we do not intend to make further comment.”

So the Acting Director has checked with every staff member involved. Will Helen Clark accept their word against her invented accusations?

Some people have suggested that Helen Clark is losing it, with his smear this morning against the Serious Fraud Office. Danyl at the Dim-Post though has a more logical explanation:

At first glance the Prime Ministers allegation that the Serious Fraud Office is in league with the National Party – for which she has not a shred of proof – suggests that she has joined her former foreign minister for a stroll in the gloomy sunless woods of paranoid delusion.

I mean it is extraordinary to have the Prime Minister accuse the SFO of actively working against her Government.

I don’t think the PM is losing it – I think she’s partly throwing shit in the hope that some of it sticks but I also think Clark assumes that the SFO staff abuse their authority to empower their friends and destroy their enemies through leaks and political theater because that’s what she would do if she ran the department. The notion that these public servants carry out their investigations with integrity and diligence without turning them into a savage partisan farce is simply unimaginable to her.

I wouldn’t want to argue that Danyl is necessairly wrong!

First we had Winston Peters smearing the SFO, basically saying they are corrupt and would be investigating him because of criticisms he made a decade ago about them.

Then senior Cabinet Minister Jim Anderton on Agenda smeared them, saying he thought they were motivated to investigate Peters to stop the agency being wound up (never mind all the staff have jobs in its sucessor agency).

Now we have Helen Clark herself smearing the SFO, saying:

“I find the National Party’s statement and timing interesting because I would say it’s almost certain they got a tip from the Serious Fraud Office that it was about to move,” Miss Clark said today on TV One’s Breakfast programme.

“I challenge them directly to come clean because I think it’s a very serious thing if an agency like the SFO is leaking to the Opposition.”

This is unbelievable. This is not an Opposition politician accusing the SFO, but the Prime Minister of NZ. She is issuing public challenges through the media, when as PM she can ask the SFO directly if they leaked.
What do you call a Prime Minister and Government which attacks and smears a body investigating a Minister for corruption? Reminds me of Italy I have to say.

John Key ruled Winston Peters out the day Owen Glenn contradicted Peters, saying Peters had solicited the donation. But Helen says it is “almost certain” National has been tipped off about the announcement the next day. Well what proof does the Prime Minister has to be “almost certain” in smearing the SFO?

And here is the irony. When National was investigated by the SFO in 2002, a politician was tipped off by the SFO. Not allegedly, but confirmed by the SFO. That politican was Helen Clark through Mark Prebble.

National was obviously very upset that Helen Clark was told in advance, and attacked the SFO for that. But here is the difference – National did not allege something unproven. They reacted to being told by the SFO that it had informed DPMC of the investigation into National.

If Helen Clark has some proof that the SFO tipped off National that they would announce the formal investigation the next day, she should provide that proof. Otherwise she should stop smearing them.

As I understand it, Helen Clark has suspended Winston Peters only from his portfolios, but not as a Minister. In other words he still gets his normal pay, his housing and transport allowances, his office, his ministerial funding and most importantly of all his staff, except the portfolio specific ones.

This means he gets to run his election campaign with full Ministerial resources, and they don’t even have any Ministerial duties to attend to.

John Key makes clear that his ruling out Winston is not tied to the SFO investigation:

Mr Key said questions still remained around the 2003 parliamentary inquiry into the scampi fisheries quota and whether Mr Peters had misled the public in relation to the Glenn donation.

He also questioned Mr Peters’ assertion today that Sir Robert’s donation had found its way to NZ First. If that was the case then why was it not declared, he said.

Mr Peters’ credibility had been severely dented and he would now find it hard to trust his word.

“We’ve had so many instances now where Winston Peters’ version of events just doesn’t stack up with the version of events presented by others.

“Really the call we made on Wednesday to effectively cut Winston Peters and New Zealand First loose wasn’t a call we made easily or lightly. We did it with the full knowledge it may well cost National an opportunity to be in government,” he said.

“I would find it enormously difficult trusting the word of Winston Peters.”

Key picks up a point I have made previously. The Herald today says:

The statement, several pages long, was generated by the trust and showed incomings and outgoings. It showed money from the Vela brothers and Sir Robert Jones going in, then being paid to New Zealand First.

If this is true, then NZ First have filed false donation returns for years on end.  As Winston Peters was railing against secret trusts, he had one which was funding NZ First. If what Peter WIlliams says is true, then how did the Auditor for NZ First ever sign off the donation returns? Or is there some explanation as to how Bob Jones gave $25,000 to the Spencer Trust, the Spencer Trust gave it to NZ First and NZ First does not declare a donation from the Spencer Trust?

Key again makes his stance clear in another Herald story:

“From our point of view,” he said, “the appointment of a minister to Cabinet has to be done on the basis that as Prime Minister I can look that person in the eye and have confidence that I can rely on their word.

“In the case of Winston Peters, I’m just not confident I can do that.”

Yet Helen is. How can anyone in NZ really think Peters was telling the truth when he said in July 2008 that he only first knew of the Glenn donation that day? I mean Helen Clark told him about it in February 2008, even if he didn’t actually know about it since it was solicited in 2005.

For all of Peters’ complaints about the SFO wanting to get revenge on him, they are doing exactly the same thing as they did in 2002 with regard to National, when there were also allegations about funding through a secret trust.

The SFO announced on 13 May 2002 the investigation:

Mr Bradshaw said he was investigating “a particular allegation relating to an aspect of funding provided to the National Party in the mid-1990s”.

It was not until 10 July 2002, that it cleared National:

Today, SFO director David Bradshaw said in a statement the investigation was complete and “there is no evidence of any criminal wrong-doing”.

Helen Clark called the election on 12 June for 27 July, so the SFO took two months back then to investigate, despite the fact it was in the middle of an election campaign. So any suggestions the SFO will on Monday announce it is all sorted out, seem rather optimistic.

The Herald has a copy in full of the SFO statement. I am interested at the exact wording:

“I have sufficient information that gives me reason to suspect that an investigation may reveal serious and complex fraud.”

Interesting he said serious and complex, not serious or complex.

“I want to emphasise that it is entirely possible that there are innocent and honest explanations. The use of the statutory power to require documents to be provided will enable the SFO to ascertain how funds were applied,” Mr Liddell said.

This is very important. I have never stated thet Peters or his cronies have broken the law. Quite simply not enough information is known to be able to make any such conclusion. But this decision means that the SFO will be able to gather the information they need to decide.

“I have decided on the information currently available that I do not have a basis for using statutory powers to inquire into allegations that Mr Glenn’s donation was misapplied or that there was an attempt corruptly to influence the Primary Production Select Committee that inquired into allegations of corruption in the Ministry of Fisheries in relation to scampi quota in 2003.

This means that the threshold to launch a full investigation is not just allegations, but that they have been substantiated in some way.

It is possible that the investigation I have authorised might be broadened at some later time and these other matters inquired into as a result of whatever information comes to light in the course of the investigation about to commence,” Mr Liddell said.

Might be broadened. A fascinating concept.

In the case of the allegations concerning the scampi select committee, the allegations are serious, but serious of allegation alone is not enough. There needs to be information availabel to support the requisite suspicion, and there is not, at this point.”

It would be tragic if the SFO, while looking through the NZ First bank accounts, for the Vela donations, also found some other donations – ones which had been denied as existing.

On information currently to hand, there are serious questions whether donations intended for one purpose may have been put to a different purpose. The allegations concern important matters relating to the funding of a political party, which go to the heart of the democratic process, and involve a minister in the Government. They also relate to the actions of laywers, who as officers of the court have fundamental obligations to uphold the law.”

Lawyers upholding the law. A wonderful concept.

“This investigation will be accorded priority. It is not possible to say how long it will take. Should the scope of the inquiry be substantially broadened, I will make a public statement. I will make a further public statement at the conclusion of the inquiry.”

We await any further public statements.

The founding director of the SFO, Chas Sturt, has said that the SFO should use its power to compel documents:

The Serious Fraud Office should be using its special powers to investigate the Winston Peters donation controversy, says its founding director, Chas Sturt.

Mr Sturt said the publicly available information about donations intended for Mr Peters’ NZ First party met his “smell test” – making it suspicious enough for the SFO to use the statutory power that can force documents to be produced. Mr Sturt said this would allow SFO investigators to check the “paper trail”.

Now Mr Sturt has some history with Peters, but he is right that independently checking the paper trail is crucial with these issues.

But the SFO has not ruled out using those powers, if it decides to launch a full investigation. It may find there is enough evidence already out there to launch a full investigation, without invoking their powers at this stage.

If however they do decide there is nothing to investigate, then the non-use of their powers to verify information could seem unusual. But from all accounts they are taking their duty very seriously, and have been doing in depth interviews with relevant players.