“Prime Minister John Key has described US President Elect Donald Trump as warm and engaging, after the two leaders finally got their first phone call.
Trump offered his condolences to New Zealand after the North Canterbury earthquakes, and had been well-briefed on emergency evacuations and relief efforts in the wake of Monday’s 7.5 quake near Hanmer.
It was the second attempt at getting the pair hooked up, after Key confirmed he had missed a call from Trump’s team in the early aftermath of the quake. Key had been meaning to call Trump to congratulate him on winning the US election last week, but the quake response had taken priority.”
Except the U.S. election was November 8th and according to Wikipedia, the earthquake struck on November 14th, six days later.
Another Stuff article about the matter says that John Key was “not quite sure how the call slipped by, but was hopeful the pair would connect soon.”
John Key then told Stuff “Yeah, apparently, that’s what Trump’s people said, that apparently I missed a call. But I had my phone, I certainly didn’t see it…”
However, in a video interview with the NZ Herald, John Key references Trump’s people having left him a voicemail so it is clear the call was made. In the interview Key blames the transition period for the confusion:
“It’s partly because, if we were dealing with the President’s office then it’s a little bit more structured. But they’re in that transition phase…”
So, it was the six-days-after-the-election earthquake, then it was a phantom call that happened to leave a voicemail, then it was the transition to blame. Welcome to Planet Key.
But there is a far more likely reason for the delay and it is not the geological earthquake, but the geopolitical one:
“About TPP. I’ll put in a pitch and say the TPP has been an important agreement and the US has been a cornerstone in that agreement and I think it’s well and truly in the US’s best interests to be part of it and that while I appreciate that he has concerns about the deal and wants to satisfy himself that the deal meets the standards he wants or make some other suggestions, I don’t think they should leave that void for a long period of time because I think in the end that void could or would get filled and I don’t think that’s in the United States best interests.”
Plan B: Coercion
Newshub.co.nz writes “while Mr Trump has been very vocal about his opposition to the deal, Mr Key thinks he might still be swayed.”
Their article quotes John Key as saying that what Trump promises pre-election and what he does post-election may not be the same things, and that with a little “coercion” the picture might change:
“As we know in the United States, what happens on a campaign trail and ultimately what happens in reality when someone assumes the Oval Office can be a bit different. What Donald Trump has said is that TPP from his perspective is a horrible deal – he hasn’t said that he’s philosophically opposed to trade.
“He hasn’t had great things to say about TPP, but maybe with some coercion, maybe, maybe with some changes that we could agree to that didn’t have an overall significant enough in pact to slow the thing down dramatically, maybe it’s possible to get them there.” [emphasis added]
However, it is unlikely to take too many phone calls to other nations from Donald Trump to stymie Key’s plans should he attempt to go this route. Ultimately, the signatories are more likely to treasure their relationships with the U.S. over their relationships with John Key, who may well exit his Prime Ministership at New Zealand’s general election in 2017.
Key’s determination to ratify the TPP no matter what is extremely short-sighted. He is banking on what he perceives as the strength of the US-New Zealand relationship and New Zealand’s support over the issue of the South China Sea in order to hold sway over Trump. Key has repeatedly stated that the US-NZ relationship is the “strongest it has ever been“.
But that strength came from his efforts to pander to an Obama administration who had made a major investment in what they called “a pivot to Asia“. It was as a result of their prioritisation of the South Pacific region that led to Key’s Defence Minister announcing in kind a $20 billion investment in New Zealand’s comparatively miniscule military might.
Money that may well go down the tubes if Trump chooses diplomacy over continued military expansionism.
Plan E: Moan about lost ‘political capital’
John Key is yet another leader who faces retiring from office with his flagship achievements in tatters. His ‘financial hub’ scheme turned New Zealand into a tax haven uniquely singled out by the Panama Papers whistleblower in his manifesto. Key’s $26 million campaign to change the New Zealand flag became, to put it nicely, the laughing stock of New Zealand.
Now his precious ‘trade’ deal, which he has pushed through at every turn against the express wishes of the vast majority of the New Zealand public (and arguably, against their direct interests) is on the rocks as well.
John Key told the NZ Herald that “Every country has gone through a lot to get to this point. Every political leader somewhere along the line has burnt a bit of political capital and called in some favours to get TPP there.”
What he’s really saying is that this debacle which has spanned more than half a decade is his final swan song, hence his desperation to push it through by any means possible.
How much, or little, weight a Prime Minister of a country of 4 million people holds in the international arena, remains to be seen. His attempts to champion the Trans-Pacific Partnership against Trump’s express wishes are unlikely to win him any favours.
Never did I expect we would be proven right in such a spectacular fashion as via the Panama Papers leak.
A leak that has shone light on an agenda to use New Zealand as a port of safe harbour for vast swathes of foreign cash. An agenda that does not stem solely from the ruling Party. It comes from on high.
From the description of the above video, posted in April 2014:
“Last month, the kiwi government tabled a bill that would remove the current 28% tax rate on income incurred by non-residents investing in funds held in New Zealand.
The move by the government is the latest to entice investors to domicile assets on its shores. A year ago, prime minister John Key, a former Merrill Lynch banker, created a focus group to examine how the nation could become more welcoming to foreign assets and enlisted consultant Oliver Wyman to examine the country’s options.
The consultancy’s recommendation was to market New Zealand as a funds domicile in the Asia-Pacific region.”
As depicted in ‘House of Cards‘, even at Presidential level, the real government is who the leaders of countries talk to when they get home at night.
And who they are talking to is people with great wealth, who know damn well what a foreign trust is, and how to utilise tax havens to their benefit.
Tax havens like New Zealand, run for the last eight years by arguably the most pro-Wall Street, pro-America Prime Minister in generations: ex-Member of the Federal Reserve Bank of New York, John Key.
New Zealand and the Panama Papers
New Zealand is once again in an uproar and debate is evolving at a swift pace. It has just discovered that it is a laundering haven for drug money and other illicit international funds, and that the personal lawyer of the leader of the country was involved in lobbying to ensure that the legislative status quo with regards to offshore trusts remained intact.
Our already-scandal-plagued Prime Minister is doing his best to cling to power, attempting to sidestep these latest revelations as deftly as he has countless prior instances of mass public indignation – rare moments in which the mostly-cowed and constantly-culled national press corp begin to do their job.
After all, the Panama Papers’ whistle-blower’s recent statement singled out John Key and New Zealand.
Back in 2011, Ireland was Greece. Being strong-armed by the IMF, bound to Greek-style austerity measures to stave off impending bankruptcy.
Bankruptcy that loomed because of “a mirage driven by clever use of tax-haven rules and a huge credit boom that permitted real estate prices and construction to grow quickly before declining ever more rapidly.”
Guess who was making full use of Ireland to reduce the tax liability of offshore funds on behalf of his wealthy clientele?
How do we know this?
Because he said so.
New Zealand Prime Minister Telling Porkies
In an enthusiastic 2005 interview with Fran O’Sullivan of the NZ Herald, then future Prime Minister of New Zealand John Key bragged about how his moving businesses and funds offshore to Ireland had saved his Merrill Lynch clientele megabucks.
From the July 19, 2005 article:
Key words… ‘Head of global foreign exchange’; Ireland; “..huge chunk of private clients’ business”.
Fran O’Sullivan writes of Key, “But as a former money-man, he is also interested in how Jersey built its economy on the back of offshore trusts.”
While the above ‘offshore trusts’ quote is addressed in a forgiving tone (bizarrely, by being reiterated), there is no mention whatsoever of the “huge chunk of private clients’ business” that Key moved to Ireland for tax purposes as Head of global foreign exchange for Merrill Lynch.
Reporter: “The Papers show that a lot of the overseas people are using it for business interests, not connected to inheritance or things that you’ve talked about in terms of opposition parties in countries that are unstable and that sort of thing. What reason would someone, in Mexico for example, using a business deal, have to set up a trust in New Zealand?”
John Key: “So the first thing you appreciate is that I haven’t seen the papers. So it’s very difficult to comment when I can’t see the individual cases. Nor am I a tax expert so I can’t comment on individual cases. But, for example, apparently there was one case that I just heard someone talking about where the person was Mexican, and had set up a Trust because they were uncertain about Mexican inheritance law, tax law, and that’s legitimate.
In short: He doesn’t know what’s in the Papers, even though he was Minister in charge of the New Zealand equivalent of the CIA. He “isn’t a tax expert” and says he can’t comment on individual cases… but then does.
The exchange continues:
Reporter: “There are plenty of examples that just refer to straight business deals. So why would someone with no connection to New Zealand be setting up Trusts here?”
John Key: “I can’t answer why that is. Well, New Zealand is a jurisdiction which is a good jurisdiction to do that and for all the reasons that we know. That we do have exchange of information, that we do have transparency, that we do meet the highest possible codes, so there’s all sorts of reasons that people might, but you have to go and ask those who establish those why they do that, I’m just not an expert in that area.”
So John Key, who moved an “aircraft leasing business, the complex interest rates derivatives business, the entire back office for global foreign exchange and a huge chunk of private clients’ business” to Ireland on behalf of one of the biggest investment banking firms in the world, in order “to take advantage of a 10 per cent tax rate for foreign investors” – an “investment” described as a “runaway success” – is “not a tax expert”.
He claims that the reason all these overseas businesses are setting up accounts in New Zealand is purely because of good compliance and transparency.
Over 10,000 in total – flocking to New Zealand because they want increased compliance and visibility?
The opening position in their submission is nothing short of astounding. They posit:
‘One may ask, “Why introduce tax rules that would benefit wealthy foreigners?” We think this is the wrong starting point, and the question should rather be: “Why not?”’
Under the sub-heading “Why would any fund manager choose New Zealand?” Parry Field suggest eight answers, and allude to “many more“.
None of which are transparency or high compliance standards, as John Key asserted at his press conference. In fact, they cite a lack of regulations as being part of the attraction:
“Regulations imposed by the European Union and other supra-national bodies are making life increasingly difficult for the traditional financial centres.”
The cherry on the cake:
The Inland Revenue Department themselves have a different take on why tax fund managers choose New Zealand:
Back to the press conference, once it is a veteran government apologist asking a question, John Key starts sounding very much like a tax expert.
Barry Soper: “Prime Minister it is said that overseas businesses use trusts in New Zealand to avoid tax. Well we’re not undermining our tax base. But is it acceptable that they’re using…”
John Key: “…It is possible, for people to potentially, through the mismatches of the different tax systems, if they want to be creative and work hard, to significantly reduce their tax liability but in a lawful way. That is at least possible for what some multinationals are doing, and we don’t like that, and we’d like to close that down… but we can’t just magically say, New Zealand is going to stop that, we need other countries to work with us.”
So the rest of the world is to blame?
That Key fronted at all for the press conference is reassuring. The previous day he had reportedly missed his regular radio spot for the first time ever.
The predominant narratives coming out in John Key’s defense have all been heard before.
They are being regurgitated because they have worked in the past. He has thusfar retained his throne.
The ‘left-wing conspiracy theorist’ slur Key slung about in response to Dirty Politics and Moment of Truth, is back.
So is ‘I haven’t read it‘, and ‘I’m not an expert in that.’
Pet commentators – and paid commentators – are hard at work, plugging away at defending the indefensible.
The most notable and obvious of whom are Chris Trotter (yes – this Chris Trotter) and long-time military-slash-financial-industrial-complex propagandist Matthew Hooton.
Famously implicated in Nicky Hager’s book‘Dirty Politics’, and representing clients of a particular ilk that tend to be inconvenienced by Hager’s internationally-acclaimed investigative journalism, Hooton has many axes to grind.
He decries the documents as ‘secret’, and complains about only the journalists being able to see them.
Having apparently forgotten that he complained about only journalists being able to see them, he then complains about them being publically released too. Hooton conflates the investigation to include all trustees and plays the privacy card despite being ideologically and professionally opposed to everything that actual privacy activists stand for.
And yes – this is from the very man who was revealed to have – and admitted to – supplied Nicky Hager’s home address to political operatives with a vendetta against him.
The smearing of journalists and interference in their careers is a common theme revealed in the book Dirty Politics, and even after its release, the practice overtly continued.
So the Prime Minister has told porkies by the hundreds and the chief defenders of his socio-economic group leave much to be desired.
Doctorates vs. Spin Doctors
Whether John Key sticks it out or is finally toppled remains to be seen. At his press conference, the strain was palpable. For, despite his protestations to the contrary, Key is the public face of what is now beyond doubt an international tax haven.
The New Zealand tax system is so structured as to allow the country to be used as a tax haven. Specifically, it allows non-residents to use trusts established in New Zealand to avoid the tax they would otherwise have to pay in their home country. This article explains how this works, and asks whether New Zealand law should be changed so as to prevent tax avoidance of this kind or, at least, to make it easier for other governments to prevent it.
So while the government tries to play it down, it appears that the entire world gets it. New Zealand is a tax haven – a sanctuary for dodgy money dubiously accrued by undesirable people.
The Apple Doesn’t Fall Far From The Tree
As much as he’d like to disclaim any liability, not only was the entire scheme of transforming the country into a foreign financial services hub the brainchild of New Zealand’s Grand Poobah himself – there is also a direct connection to his personal network.
The implication of John Key’s personal lawyer, Ken Whitney, is a saga unto itself.
Now we are told that he was involved in setting up a “sham” trust that is under investigation by the Serious Fraud Office. A Trust involving backdated documents, and for which Mr Whitney admitted to witnessing a signature that required his physical presence, from half a world away.
In this High Court ruling, his conduct was described as “far from satisfactory” by a High Court judge, who also referred to Whitney’s evidence as being “inconsistent“.
Yet the Prime Minister, in the below video by Stuff.co.nz, is standing by his man. Aside from the blanket denials, perhaps the most remarkable moment is when he tells the assembled reporters “you guys were very careful last night, I think, in your coverage of these matters: the reason you were is because you don’t want to get your asses sued off you”.
The Trusts Are Only Half The Problem
New Zealand isn’t just being used as a place to stash illicit funds, but as a fake operating base for an array of banking and financial services.
“Although John Key’s official financial services hub may be on the back burners, the unofficial New Zealand financial services sector is still going strong.”
The Reserve Bank issued a warning about an entity ‘also known as Irish Nationwide Bank‘…
Which is “one of about 1,000 shell companies incorporated in New Zealand over three years [that] had been used to carry out banking activities free of regulatory oversight… 143 New Zealand registered companies were implicated, over a four year period, in criminal activities overseas…”
Given all the above, it is beyond debate that:
New Zealand is a tax haven for the benefit of the ultra-rich
This has scandalised New Zealand’s international reputation
New Zealand’s Prime Minister is the living embodiment of it
His denials to the contrary are hollow and impotent
But this is all part of a much wider issue. One with implications so huge that it is rarely tackled by the news media, who instead focus on small, digestible pieces and never quite get around to confronting the elephant in the room:
New Zealand has been economically, politically, socially and militarily invaded. By our so-called allies.
Few have the guts to admit this, or to confront the reality of it.
Yet deep inside, we can feel it.
New Zealand as we knew it, no longer exists.
The Shire is being burned to the ground.
[How that happened, and the global implications will be explored in depth on our sister site ContraSpin, in Part 2 of this article, titled: “The Desecration Of New Zealand“]
Never did we dream that our second post on this site would be on a topic that may end the political career of Prime Minister of New Zealand John Key.
Famous Kiwi investigative journalist Nicky Hager has just a few hours ago NZST, released an explosive new book called “Dirty Politics” that implicates the office of the Prime Minister and his Press Secretary, Cabinet Ministers, and other political figures in the seemingly routine leaking of information which allegedly may include information obtained from sensitive intelligence documents to Canon Media Award-winning right-wing blogger Cameron “Whale Oil” Slater.
It seems Slater has been caught out creating AstroTurf media by regurgitating not only information from the sitting Government but apparently also publishing word-for-word spin sent to him by shady corporate figures including the tobacco industry.
More shockingly, the Prime Minister’s office is alleged to have participated in not only the leaking of material for political motives, but the compromising of Labour party computers in order to facilitate the aforementioned.
These hypocritical political players are all critics of whistleblower Edward Snowden, and deride the leaking of information for the public good, yet appear to approve of and participate in leaking information for their own personal political gain.
Even more shockingly, the involvement of ex Minister of Police, now Minister of Justice Judith Collins, who has previously been outed by ‘The Listener’ regarding her leaks to media (saying “I do ring people up and give them stories, because, gee, I guess I think that’s my job…”), takes this to another level and suggests that this may snowball to become one of the biggest political scandals in the history of New Zealand – because Judith Collins is the sponsor of cyber-bullying legislation that was supposed to prevent exactly the type of bullying that WhaleOil engages in at the apparent behest of Judith Collins herself and a host of other established Parliamentary figures.
According to the Stuff.co.nz April 2013 article, Judith Collins’ “legislation will make it an offence to send messages or post material online that is grossly offensive, indecent, obscene, menacing or knowingly false. That sort of material will be punishable by up to three months’ imprisonment or a $2000 fine.”
Considering the extreme and offensive nature of Cameron “WhaleOil” Slater’s targeting of an alleged rape victim and his disgusting references to Pike River Mine victims/their supporters, what an ironic situation the NZ political and media jetset now find themselves in.
As many media commentators have noted, the revelations are mind-blowing and are only just unravelling. Until we have read the book for ourselves and seen how things play out over the next 24 hours, we will use this post to archive the information that is becoming available in the public sphere.
Media & commentary is also being aggregated on the Twitter hashtag #DirtyJK – a euphemism combining the title of the book “Dirty Politics” with the initials of Prime Minister John Key and the internet colloquialism for “joke”, which is exactly what has been made of WhaleOil’s blog and of the Ministers/political lackeys engaged in such underhanded backroom behaviour.
There have already been several calls for the resignation of the Prime Minister in the event that these allegations are proven, including from Helen Kelly, President of the Council of Trade Unions.
Aggregated media relating to #DirtyJK / #DirtyPolitics: