Written By: - Date published: 9:00 pm, October 26th, 2008 - 142 comments
Categories: corruption, election 2008, john key, national, slippery -
Tags: corruption, Flectcher Challenge Forests, shares, tranzrail
When the Tranzrail shares came to light, Key was asked whether he had any other undisclosed shares entailing a conflict of interest. He said he didn’t. That was not true.
National Party Leader John Key failed to disclose his conflict of interest arising from his share holding in Fletcher Challenge Forests while using his privileges as an MP to obtain information and make public statements relevant to that company’s industry and its major contractual relationships with Tranzrail.
Research I conducted exclusively for The Standard shows Mr Key owned 40,000 F-class shares and 60,000 S-class shares in Fletcher Challenge Forests (which is now called Tenon) when he became an MP after the 2002 election. He owned these shares in his own name, not in a trust.
Standing Order 166 states that “a member must, before participating in the consideration of any item of business, declare any financial interest that the member has in that business.” In other words, conflicts of interest must be disclosed. It was violating this rule that got Key into trouble over his Tranzrail shares. And it is this rule that he has broken again by failing to reveal his FCF shares when talking issues that related to FCF’s share price.
Every time Key had a conflict of interest with Tranzrail he also had one with Fletcher Challenge Fletcher. FCF had a contract with Tranzrail for moving timber and pulp around its logging sites, milling operations, and to ports. Because of this major contractual arrangement, what happened to Tranzrail also affected FCF and vice versa (FCF needed that lease of Tranzrail stock to move its timber, the contract was a major revenue source for Tranzrail).
FCF was also part of the Rail Freight Action Group, which was campaigning for the Government to buy the rails off Tranzrail. FCF believed such a deal would improve rail services for its logging, boosting its profitability, and, thereby, its return to shareholders. Key asked a number of questions in his capacity on the potential for a government deal with Tranzrail.
The information Key sought by asking questions about the potential sale of Tranzrail could have been used by him to make a gain on both his Tranzrail and his FCF shares. His shares in FCF alone meant Key had an interest in Tranzrail’s ownership. This means each one of Key’s statements and the questions he asked as an MP relating to Tranzrail’s ownership also created a conflict of interest in relation his FCF shares, which he failed to disclose.
In March 2003, Key spoke against a Bill that removed the cap of $6,000 on redundancy payments, at the same time Fletcher Challenge Forests was laying off workers at two mills and planning further redundancies. Key failed to disclose his conflict of interest.
Key also spoke on the Te Uri o Hau Claims Settlement Bill. This Bill gave Te Uri o Hau ownership over Pouto forest and 45% of Mangawhai forest in Northland. The logging rights to these forests may have been held by FCF (FCF logged many forests in the region but I’m still trying to get the documentation to confirm they logged Pouto and Mangawhai). Here’s the exchange from Hansard, October 2, 2002:
Key: Jim Peters declared his ancestry and his conflict of interest, if there is any, in this settlement process. I am happy to declare I have none….
An Hon. Member: The member is absolutely positive?
JOHN KEY: I am absolutely positive of that.
Ron Mark: You don’t know what skeleton is in your wardrobe.
If FCF was logging those forests, Key had a very real conflict of interest. By denying it, he will have misled Parliament, a serious offence.
Key was a shareholder in FCF during each of these incidents. Each of these failures to disclose his conflict of interest is a breach of standing orders and could be grounds for Key to be brought before the Privileges Committee in the next term of Parliament.
Key did not sell his Fletcher Challenge Forests shares until June 2003, the same time as he sold his Tranzrail shares. He sold them in four parcels, on the 11th, 12, and 16th of June, for total of around $105,000 [share price]. As Key sold both his Tranzrail and FCF holdings at the same time, it may be that he sold his entire New Zealand share portfolio at this time This matches with his statement on Sunrise that he hasn’t owned any New Zealand shares since 2003. Why he chose to sell then and what other companies he held, we don’t know.
Key may have had other undisclosed conflicts of interest arising from shareholdings in other companies as well as Tranzrail and Fletcher Challenge Forests. My research was not, and could not be, a search of all New Zealand registered companies’ registers during the relevant period; only eight registers were examined. The fact that this search of just eight potentially interesting companies turned up another conflict of interest (and more information, which I will be releasing in due course) suggests that there is more waiting to be uncovered.
Key failed, on multiple occasions, to reveal his shares in Fletcher Challenge Forests while using his privileges as an MP to ask questions that were pertinent to the value of those shares. And he misled the public, just four weeks ago, when he claimed he had no more skeletons in his closet.
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I know we should avoid such talk,
But Sarah, with regards to all your whining about this site. Just curious, considering you seem to be the great crusader of objectivity… do you go and ask the same questions of kiwiblog and/or whaleoil?
riiiiight.
Back in your box
Sophie: Guyon would make a good spin-doctor for John Key and he has been practising for a long time on TV1 so he would be able to skip the interview. His brother Colin Blog on Fairfax is a different level altogether.
And, by the way. How intriguing is it that the tory spin artists have turned this entire thread in to a discussion about Paintergate of all things!
The point that I see very clearly here is:
Key asked about a million (yeh i counted) questions in the house of Clark banging on about Peters and the donations saga…. THEREFORE:
You reap what you sow Johnny Friendly.
I hope some media get a hold of this and do something, oh but thats right, they barely made a whisper over ‘Tranzrail eyes’ yet over Winston they bring out the artillery. Liberal Media though… Right??
Sophie – yes. He is shockingly biased and is obviously pro Labour. His performance tonight was disgraceful: “Peters edging towards 5%” (just over halfway is the reality); “…Key won’t have the numbers on election night” (the centre right has 63 seats and can govern on tonight’s poll).
He must have been promised a good bonus for these lines. He ran some great Winston Peters publicity last night and the night before too – lead stories and all!
Good point Chris G. Of course during Question Time National prepared the questions and handed them to Wodney and gave him their question time so that Wodney would collect the credit/blame.
Sorry to be a pain and bring the thread back to the topic … but how is this a conflict of interest?
As stated it seems a stretch, and less than bullet-proof. And you can forget about the MSM showing any interest unless it can be packaged into a dumbed-down-bite-sized-goody for ease of dissemination.
Good stuff Steve
I wonder if there is more to come. I hear that Australia may be the lucky country.
Kiwigirl.
You fret about a painting that was not very good given to a school to help them with operational expenses and you cry foul. I would be much more worried about insider trading, which is all but what Key did and he lied when asked about his shareholding.
You also complain about a driver transporting Helen driving too fast. I am much more concerned about world peace and climate change. When I think of what John Key has said over the years I am confused, because he has said two entirely different things and I get the impression that he is saying not what he actually thinks but what he thinks will be popular.
Of course one can find things to support one’s prejudices. The only thing is that Helen’s “shortcomings” are minor in the extreme whereas John’s shortcomings go to the essence of his ability to be PM. Why would you want a currency trader to be PM especially if you consider recent events?
JK was a really good currency trader. That meant that he was good at making a profit over a three month period and that he did not give a dam about the effect on the citizens of the affected countries of these decisions. This is the last person that I would want to be in charge of my country.
Go Helen!! Sorry Sarah but if you want to beat up on lefties you should go to Kiwiblog.
snakes and ladders danny boy. go back to the top and read the original post. it is quite obvious that keys had an interest in several of the questionsa tissue and what is odd that he sold his shares pretty soon after he realised that parliament has rules and is not dog eat dog liek the commercial world where slight of hand and telling untruths is the norm when seeking advantage.
travellerev – I have no desire to visit the gits over on kiwiblog. It’s like talking to a bunch of immature retards.
I like some of the stuff on this site, but sometimes it can get so partisan that it’s frustrating (ie. when there are 4 or more posts a day smearing Key). But when it’s balanced and both sides of the spectrum can voice their opinion then its one of the best blogs on the market. But I wish someone would start up a popular run-of-the-mill intelligent centre blog.
@hs (waaaay above)
Oh, Tizard couldn’t be THAT bad as Speaker, just ask whoever wrote her wikipedia article:
“Judith Tizard (Born 3 January 1956) is a New Zealand politician. She is a member of the Labour Party. She is nice. And loves tangerines.”
DeeDub and MickeySavage
Janet wrote: “Sometime I hope that someone does a critique of the so called lies of Helen Clark. For example the painting.” And -
“Ianmac – only if you had asked the taxi to speed. There is no evidence that Helen asked the drivers to speed to get to the airport.”
Geeze – I was trying to show Janet that information or opinion is very easy to find on the Internet – and that you can find ANYTHING to support your point of view. [which is something you're not allowed to have around here, evidently.]
I think I’ll go back to GREENER pastures.
And he was a good derivatives trader too. Oh oops, aren’t those the same financial products now collapsing the entire western financial world?
And didn’t the FRNZ just announce (nice touch, Sunday morning 8:05 in the first Holiday weekend of the year, what you reckon? They really wanted to tell the NZ punters that our financial system was as contaminated with these crappy SUV’s as the rest of the world) to buy billions of dollars worth of mortgage-backed securities.
Captcha: left maintain. Way to go left!
Immature retards, Sarah?
Do I even have to finish this thought?
well done Steve – the scandal is of course the lie, not the conflict of interest. That could have been sorted by an “oops, sorry”. Incredible how the same berks who keep trawling through the distant past to try to find any scrap to attack Helen with (her driver was speeding, how is that her fault?) are SO touchy about the left digging the dirt on Key. If he were just a member of the public it would be excessive but – he wants to be PM, FFS! People want to know whether he can be believed or not and on this evidence alone, he can’t.
Sarah I agree with you over the Kiwiblog place. Seldom a dialogue. But I am not sure that there are smears against (or about) John Key here exactly. He is a bit of an enigma. Tonight on Sunday TV1 they were examining the history of Obama and the concerns were raised that he had only been in politics for 12 years and there was insufficient info about the “real” man. Our John has been visible for 6 years and we do not really know who he is. The tactic to remain in the mists is deliberate I believe. Hence lets find out about him ourselves. Do you really know who John is – what he really cares about? Do tell.
Hi Sarah,
There is hope for you yet.
It is actually very easy to start a brandspankin free of charge blog. And it’s great fun too. Just go here and register.
You seem to be endowed with intelligence and perhaps you could add a valuable bipartisan and intelligent blog.
If you comment here, while I’m sure that most people will stay staunchly entrenched within their political views, I’m sure people would be more than interested to hear your opinions on the issues presented even if you do not support the partisan clobbering of John Key.
Maybe you don’t think so and you are entitled to your opinions but Slippery John is so eminently clobberable.
See Ianmac,
Again not a very ignorant remark at all, in fact rather insightful. LOL.
If someone shows up on the stage of national politics out of the blue and no info is forthcoming than that should make us curious.
If this person is closely guarded and prepped by some of the most mercenary of PR consultants with a big industrial tycoon in the background and this person can’t help himself in the stock market casino using his political connections for his own personal gain than our level of curiosity should go ballistic.
IB & SP: Tweaked the database to push it up…
It will stay at the top until tommorrow night. BTW: I can’t believe that when I looked at the net that some clown was wanting to charge for a utility to do this. All that was required was that the post date was changed. I suppose there ia sucker born every minute.
Just listened to the 10 o’clock news. No one has picked up this story yet. I’m sure there must be journos out there spending their Sunday trying to find some good stories and who must drop into the Standard if they have any sense. But this might not meet with the approval of their bosses at this sensitive time.
Steve Pierson:
Section 118 of the Companies Act actually says this:
Not a great look on a thread called “Key exposed”!
What section were you intending to refer to?
Janet – There are far more impotant stories for them to cover like celebrity marriages. Go back to sleep New Zealand, your corporate overlords are taking care of everything.
Nomestradamus you didn’t have to copy all that out. Just a typo. It’s section 218. I found that easily enough. Did you mean to spell your name as Nostradamus?
Jaymam:
Great, thanks for clearing that up.
My name is a bit of a piss-take really – long story.
Hi Randal,
I did read the original post. I don’t see the FCC conflict. The questions Key asked concerned another company.
SP indicated the contract between TR and FCC sufficed for a conflict by way of his FCC shares. He may be correct. However he may also be incorrect, which is why I asked what the significance was about that specific contract.
It is not at all obvious that the identity of the majority shareholder in TR would change the rights that FCC enjoyed under the contract (or the likelihood of the contract being renewed etc), so as to cause a material effect on the share price of FCC.
I am not saying SP is wrong, I am just saying that there is nothing in his post that is obviously problematic for Key. One needs to add their own speculation in order to be outraged.
Cheers,
D
It’s a bit too late and I’m rather too tired to properly absorb all of this but on the face of it Steve it looks like a decent piece of invetigative work. If I were still an editor I’d certainly assign a journo to first fact-check your stuff and then follow it up (with due credit of course) but prima facie, as the lawyers say, there’s a story here.
Meanwhile Akldnut comments:
Not sure that’s quite the implication you were aiming for, Akldnut
If it was, then it seems we’re in agreement. Because I see on the one hand an Emperor in clothes long since tattered, getting increasingly septic as bits fall off; and on the other a would-be Emperor in a flesh coloured bodysuit… or possibly naked… but who keeps moving around so you really can’t tell, all the while smiling reassuringly and hoping you won’t get a good look before he passes by.
Such is the choice facing NZ voters. No wonder they’ve had a gutsfull.
KiwiGirl
October 26, 2008 at 8:13 pm
“Geeze – I was trying to show Janet that information or opinion is very easy to find on the Internet – and that you can find ANYTHING to support your point of view. [which is something you're not allowed to have around here, evidently.]
I think I’ll go back to GREENER pastures.”
OK. But that wasn’t really clear in your post. That’s why you’ll notice my whole reply was a question not a statement.
Last night Johnkey was on Bill Ralston’s meet the Leader on Prime. Odd that since Bill is John’s media trainer he is also the compere? Interesting body talk from John. When the few times Young or Soper asked searching questions John went very still -impassive. Patsy questions were met with cheerful boyishness. But nothing new. Nothing explained like how would John choose to bail out those in need through losing their job? How exactly would the Law and order policy work? No specifics that added to answers. Interesting. Surprised that 75% can trust him on the computer poll??? Ha!
Anyone else notice that while Key is saying something he shakes his head? Which bit should you believe – the words or the body language?
Ianmac:
i saw a bit of that last night – Ralston asked him a question about the perception of his leadership in relation to the Lockwood and Williamson remarks. I recall the look on Ralston’s face when he was asking that question: ‘Apologetic’ i would call it.
Also – when they were discussing Key wanting the tourism portfolio over other more important ones. Key said something like “meh, i could do education…” in such a dismissive and casual way as if education would just be too easy for him.
One interviewer was concerned that Key was prepared to go with the maori party when he didn’t even know what “Te rangatiratanga” meant. Key replied ‘yea well’ and waffled on about something else.
the really disappointing thing about this whole affair is that the national party has not been able to gow their own candidate i.e. that there is no local person who can espouse the right wing ideology and is acceptable to the electoratge at large.
the only reason John Keys has been able to get traction is because he has been adopted wholesale by the media and he is more or less their candidate and their creature.
the media has managed to succesfully infantilise the population for their own ends and now they look to be finishing the job off by promoting a “SQUARE” to bludgeon any last resistance.
randal,
Yeah; first they parachute in Don Brash, then John Key. What does it say about their caucus that they have no leadership material?
So, if National lose the election and Key goes, who replaces him? I can’t imagine him sticking around for another three years.
Anita,
He’ll go were all bankers go after they retire and in this day and age with the banksters killing the world financial system he will go were no people other than his rich prick mates can get to him. He will depart in disgrace and go golfing with the selfsame rich prick mates and watch the sky while the world burns from the windows of his 5 million dollar Hawaii condo.
And we’ll be left holding the bag in a financially ruined world. The only good thing is that we are doing it from an island too so the only chaos we’ll have to deal with is the one we create here and not the mayhem which will erupt oversees.
As for National? The good news is that most NZ rich pricks made their money in either speculative finances or the equally speculative real estate bubble. They will be cut to size and have to learn to live like the rest of us and than all of a sudden their greedy grab what you can and run is not so attractive anymore. Hell, you might need a doctor and where are you going to find one if you have no money? Aaah ooo oops all of a sudden it’s a good thing that labour still has a free healthcare in place
Anita
Simon Power will likely be the next leader of the Nats, who do you think will be the likely next leader of Labour.
yes ev
I can hear the fiddles tuning up now
sorry hs.
simon power is a lightweight and he is still fixated on the easy money of the 90′s
somehow or other there doesn’t appear to be anything substantial about him
as for labour they have a great team of MP’s any one of them who would make a good fist of it and more importantly be seen by the electorate as capable of doing the job.