Panama Papers continued to swirl around both John Key and the Overseas Investment Office

Bernard Hickey | 4 May 2016

The Government was under sustained pressure in and out of Parliament yesterday as the fallout from the Panama Papers continued to swirl around both John Key and the Overseas Investment Office.

Key was forced to remind his former Revenue Minister Todd McClay that he had indeed told McClay that his personal lawyer wanted to chat in late 2014 about the IRD’s proposed review of the foreign trust industry. McClay was initially unsure if Ken Whitney was linked to the Prime Minister when asked yesterday about what he knew in the wake of the now famous and disputed conversation between Key and Whitney.

Key’s intervention ensured the removal of any doubt about the episode, and reduced the potential compounding of the damage from Key’s failure to identify Whitney to journalists on April 13 when he said “one of the (lobby) groups asked about it (the IRD report),” without saying it was his personal lawyer.

McClay also denied that he felt pressured before he made the decision to shelve the IRD review.

Earlier, Key defended his decision to refer Whitney’s query on to McClay as the normal practice whenever he was approached by someone he knew about an issue that he was unaware of. Key again denied he was aware of the impending IRD review, or that he had expressed a firm view to Whitney about the review not proceeding.

Whitney’s email to McClay certainly made clear he thought Key had made up his mind, even though Key said he had told Whitney he knew nothing about it. Key also rebuked Whitney yesterday for that misrepresentation, saying the lawyer’s email to McClay was ‘sloppy’.

Key told reporters before National’s caucus meeting that he had since spoken to Whitney, who had agreed with Key’s version and that Key thought the email had been “sloppily written.”

“He is absolutely confident that my version of events is correct and that’s what he attempted to write in the email,” Key said.

“It may be the email was sloppily written if that was the case, but that was absolutely right. I was not aware either of the changes that were there. I was certainly aware that we weren’t making any changes because I would have known about them, because I would have seen the work, and I hadn’t seen any work. But outside of them, I sent him off to the minister,” Key said.

“In the end, you know, people write things in a way which is sometimes shorthand,” he said when asked how a trained lawyer could write an email sloppily.

‘Anyone can approach me in the Koru lounge’

Key was then asked if he was concerned about perceptions of vested interests having special access to the Prime Minister to exert influence.

“No, I am not concerned about that. Look, we are very accessible and that includes being out and about in the community pretty much every day that we are not in Parliament or overseas. That also means that I make sure I am out there,” Key said.

“If I go to the Koru Lounge, for instance, I don’t sit off away in the corner. I stand out in the middle, people come up to me from all works of life every single day,” he said.

“There is nothing precluding anyone, just because I know them, asking me a question. I don’t live in a test tube and people do come up and do that. I don’t wear a sign that says ‘don’t ask me a question’. What I do is thoroughly professional, which is to say ‘I am not aware of any changes’ but then ‘your industry group needs to go and talk to the minister’. They went and did that. That happens again pretty much every day.”

OIO embarrassment

Meanwhile, David Cunliffe’s digging around a purchase of a Taranaki farm by a pair of Argentine brothers linked to Mossack Fonseca paid off for the Opposition yesterday at the expense of the Government.

After the initial revelation of the Mossack Fonseca link last week, the OIO said it was satisfied the brothers had met its good character test.

Then Labour uncovered that Rafael and Federico Grozovsky had been convicted of discharging toxic chemicals into a river in Argentina, which should have been found by any OIO search to verify the brothers’ claims not to have any convictions.

On Monday the OIO said it was investigating, and then yesterday it revealed it would conduct an independent review into the OIO’s process around the good character test after it found information was not passed on to the Minister.

“I have advised Land Information Minister Louise Upston of this situation and apologised. I have also given her an assurance there will be no repeat of this situation in future,” said LINZ Chief Executive, Peter Mersi.

“The OIO has a robust process for dealing with applications but on this occasion, it does not appear to have been followed. This was a regrettable lapse,” he said.

Upston also said she was disappointed that one member of the OIO’s staff had not passed the information on, but said she retained confidence in Mersi. Other media reported the staff member no longer worked at the OIO.

This morning, Cunliffe described the OIO’s mistake as the ‘tip of the iceberg’ and he promised more revelations in the days to come. Winston Peters, who has been rising in the polls on concern about migration and foreign investment, said the episode confirmed his view that the OIO had acted as a rubber stamp.

And we have yet to see the expected release of a database of 200,000 entities in the Panama Papers on May 9.

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