It was good to see the media cover the Jones/Liu issue in detail over the weekend. Now the court case is over, one can look at where this should end up. First it is useful to consider all the background on Liu, when remembering how two separate Labour Ministers refused official advice to rescind his residency and to refuse him citizenship.
- Born yongming yan on 15 June 1969
- He was Chairman of Tonghua Jinma Pharmaceutical which collapsed after a loss of around NZ$100m and he fled China in 2001. It is alleged they were manufacturing placebos.
- As he fled he gained identity documents in the name of Yang Liu, with a DOB of 20 October 1972. In total it appears he had four passports with three different dates of births, and two or three different names.
- We charged in China with fraud and embezzlement. The alleged fraud totalled not $2.5m as reported by some media, but between $170m and $250m.
- CCTV in China reported in 2007 that Australian authorities there confiscated and repatriated A$3.4m to China. This was per a decision by the NSW Supreme Court.
- Yan moved to New Zealand and purchased two properties worth $7.4m. He paid cash for them.
- Yan claims to be a member of Falun Gong, and cites this as why he left China. However Falun Gong prohibit gambling, and Yan was the largest customer of the Sky City casino.
- Paid Labour Party fund-raiser Shane Te Pou $5,000 to help his citizenship application. Te Pou (whom Clark had banned from the Beehive over ethical concerns) introduced him to Internal Affairs Minister Rick Barker. Te Pou was also campaign manager to dover samuels, whom his brother had also worked for.
- Samuels received a $5,000 donation from a tamaki Wu who appears to be a fictitious person, and whose listed address is owned by Daniel Philips, brother of Shane Te Pou.
- Yan also donated $5,000 to Chris Carter and to Pansy Wong. Rick Barker also received an “anonymous” $5,000 donation the same year. It is also a matter of record that Labour held several fundraising dinners at the Jade Terrace restaurant, attended by Yan. At these dinners the “bucket” is literally passed around and no one knows how much any one individual contributed. They are reputed to sometimes raise a six figure sum in one evening.
- Barker did not recuse himself immediately on the basis of his friendship With Yan. In fact he stayed involved until quite late in the piece when he delegated the decision to Shane Jones (Jones was not the Associate DIA Minister, and any Minister could have been chosen) – the one Minister whose most senior office staffer was the brother of Shane Te Pou who was being paid to help him get citizenship.
- Jones was strongly advised not to grant citizenship, on the multiple grounds of the Interpol warrants, the criminal charges in China, the multiple identities and the ongoing investigation by Immigration NZ over whether he was even entitled to residency. Jones granted citizenship.
- Yan given citizenship by Dover Samuels in the Maori Affairs Select Committee Room on 11 August 2008, five days after the decision.
As people can see this is not just an issue about one Minister, Shane Jones. It is about the combined decisions and advocacy of Shane Te Pou, Dover Samuels, Rick Barker, David Cunliffe and Shane Jones.
The Serious Fraud Office has told the Auditor-General they have an interest in this case, and may investigate also. i think it is appropriate to state in my opinion Shane Jones has not broken any law, and there is nothing to indicate that he received any personal financial benefit from making the decision he did. This makes this case different to Taito Philip Field, who did receive considerable benefits from his activities as an MP and was charged with corruption and bribery.
I don't think any reasonable person could dispute that the decision by Jones was wrong. His claim that an official told him Yan would be executed in China has no basis in reality. Not only does DIA have no record of this advice being given, this was an issue over citizenship not deportation. Also Yan's claims of being Falun Gong are also contradicted by the evidence. In fact he has no evidence to back up his claims, while the DIA concerns were all fully documented. Also as reported here, Jones deported a 25 year old resident back to Iran, despite her claims that she faced a death penalty for converting to Christianity.
Now as I said Jones is not the only player here. Many Labour people have acted wrongly in my opinion. Dover Samuels' advocacy on behalf of his good friend was totally inappropriate, and bordering on the threatening. As we saw in the Nick Smith case MPs should generally not get involved in advocacy for their friends.
Rick Barker was wrong to not have immediately recused himself from the case, and wrong to delegate the decision to Shane Jones – the Minister whose SPS was the brother of Shane Te Pou who was helping Yan with the application. Barker would have known this as Te Pou introduced Yan to Barker.
David Cunliffe was wrong to have also gone against the advice of his immigration officials, and not rescind Yan's residency (a move which was cited as a reason to make Yan a citizen).
Shane Te Pou was wrong to take $5,000 to help Yan with his citizenship application. That is an activity incompatible with being a political party fundraiser.
Shane Jones was wrong to grant citizenship, and to (presumably) authorise the special ceremony at parliament.
As I have said previously, I do not believe Jones received any personal financial benefit from approving the citizenship. I do not believe Jones broke any law. But how you judge his actions can vary between a worst and a best case scenario.
The best case scenario for Jones is that he just gave Yan citizenship because Samuels asked him to. He trusted Dover's judgement, and decided pleasing Dover was more important than the good character test in the Citizenship Act. Now this is not illegal, and Ministers do have discretion. However I believe such a failure of judgement means Jones is not fit to be a Minister again. If Nick Smith is removed as a Minister for a mere letter of advocacy, then Jones for granting citizenship to someone obviously not qualified has offended far worse.
Also, even putting aside the decision itself, Jones has shown incompetence in not documenting his decision. If I was a Minister of the Crown and I was making a decision that goes against official advice, I would absolutely ensure my reasons for doing so were documented, signed and dated and that this be added to the official file. It is because Jones failed to do such a basic thing, that there is enhanced speculation over what his motives were. The fact that the decision was one where he had been lobbied by his political colleagues should have made it even clearer that he should have documented his decision.
That is the best case scenario. That is based on an assumption that no one ever told Shane Jones that Yan was a very wealthy man who had already donated to Labour, and presumably would donate more in future. This means that Dover Samuels never mentioned it, Rick Barker never mentioned it, Chris Carter never mentioned it, Shane Te Pou never mentioned it, and Shane's brother Daniel never mentioned it despite being the most senior official and advisor in Jones' office.
You see if any of those people did tell Jones that he had donated to Labour, and implied Labour would do well out of Yan in future if he was made a citizen, then it literally becomes a case of selling citizenships to donors. Now again this is not illegal, as far as I can tell. Only if a specific donation was promised for a donation, would it be illegal – and I am unaware of any evidence that this was the case. It was about buying influence, not buying a decision.
Now I don't know of anyway we can resolve if it is the best case scenario or the worst case scenario. The SFO have said they have an interest in the case. However as I have said, there do not appear to be any laws broken. So I don't see a role for the SFO, unless there is more to emerge than is currently in the public domain.
Now we have the letter from David Shearer to the Auditor-General. His PR says:
“Based on my discussions with Shane Jones, I believe that he followed a proper process. But given the differing statements made in and outside of court and the questions that have been raised publicly, I believe that an independent agency should review the case.
“I've asked for the Auditor-General to look into all the departmental as well as ministerial processes involved in this case.
The trouble is here that the issue is not generally about process. The process is that DIA provides a background paper and a recommendation and the Minister makes a decision. The only process issue I can think of is Jones failing to document his decision, but the wider issue is that Jones has made a decision which runs contrary to all the evidence (as opposed to unsupported allegations) in this case.
Now the Auditor-General is in no way bound by the terms of reference proposed by David Shearer. She has the authority and power to set a much wider terms of reference. If she does investigate, she should set as wide a terms of reference as possible.
But there is still a big problem. The Auditor-General's scope is generally the Government. Would the Auditor-General be comfortable determining how much money Yan donated to the Labour Party. Could she determine whether Yan was the “Tamaki Wu” who donated to Dover Samuels (from the address of a house owned by Daniel Phillips, brother of Shane Te Pou). Can the Auditor-General find out how much Yan donated at the Fundraising dinners. Testimony would ne requited from Te Pou, Phillips, Samuels and Yan himself. Maybe though this mystery DIA official whom Shane Jones can't even name,whom he insists told him Yan would be executed, can be identified!
So overall, upon reflection, I am unsure if an inquiry by the Auditor-General will resolve issues. As I said, the issues are not just about Shane Jones, but about numerous Labour Party people – many no longer in Government. The Auditor-General may not have the scope to fully investigate, and at the end of the day it is impossible to prove whether or not Jones was or was not influenced by the fact Yan was a donor to Labour.
What I, and others, have advocated in the past is for an Independent Commission against Corruption, with powers like the SFO has. The NSW have one, which works well. An ICAC could investigate not just breaches of the Crimes Act, but abuses of power in the wider sense – such as Government decisions favouring donors and mates of MPs. They do not have the ability to prosecute but have the standing powers of a royal commission to investigate, report and recommend charges if warranted.
Ultimately this issue is likely to be resolved as a political question, not a legal one. David Shearer needs to consider whether he regards the following as appropriate:
- Labour Party fundraisers acting as agents for people wanting a favourable Ministerial decision
- Labour MPs advocating in the strongest possible terms on behalf of their friends and known Labour donors
- Labour Ministers refusing the rescinding of residency and granting citizenship to donors, against the advice of officials
- Labour Ministers not documenting any reasons at all for why they overturned a recommendation, and allowed citizenship to someone whose identity wasn't even known, had an Interpol arrest warrant out for them, and was under investigation by multiple agencies
- Labour MPs declaring donations by seemingly fictitious people, allegedly living at a residence owned by a senior Ministerial advisor
If David Shearer wants to say that is all fine, and is business as normal – well that is his call. But I suspect he knows in his heart of hearts that things were not kosher, and that Yan would never have been made a citizen if it were not for the fact he donated to and befriended multiple Labour MPs, through the efforts of Labour fundraiser Shane Te Pou.