In 2009, Bill ‘Double Dipton’ English survived a corruption scandal that would have sunk a less important minister. Key couldn’t afford to lose him. Now, evidence continues to emerge of how Steven Joyce gave his old company a sweetheart loan against the official advice. Do you think John Key will act or is Joyce too big to fail?
Joyce is widely tipped as Key’s successor when he leaves politics – either after losing later this year or in 2013. Where English is the rural workhorse of the National party, Joyce is the big-city wide boy who runs Key’s political strategy.
More and more of the story of how Joyce came to give his former company, Media Works, a $43.3 million loan at below market rates for a distressed company is coming out.
The Nats say they were just offering broadcasters the chance to spread their new fee payments over several years but, in reality, the $43.3 million soft loan to Mediaworks was over 99% of the money lent. In total, $43.6 million of payments were spread out. That means most other companies had to pay up front. Only Mediaworks got significant special treatment.
Over at No Right Turn, I/S has the OIA papers and is assembling the chronology of what went down. It looks decidedly dodgy. Official advice repeatedly told Joyce that a special deal for media companies was not needed. He then asked for options about spreading the payments before Mediaworks CEO Brent Impey approached Key at a function to ask for a favour (Key previously denied any such meeting took place).
Joyce then took a paper to Cabinet saying that Mediaworks would collapse, although the official advise was still that if Mediaworks ran short of cash it was the fault of the foreign owners for taking too much in dividends. (btw, yes, this is the same Steven Joyce who refused to let Kiwirail build its new traincars here, which would have saved manufacturing jobs and kept more money in the economy). Cabinet got scared and approved Mediaworks paying the fee over several years with an interest rate set by the government’s depreciation rate for telecommunications capital.
A little while later, MED realised that when the government lets someone pay a fee over time and charges interest on it, that’s a loan and requires the Minister of Finance’s approval under the Public Finance Act. So, English must have signed off on it, which makes his comments on Q+A yesterday interesting:
GUYON Another bailout in the news this week and for some weeks – MediaWorks. Why did you loan MediaWorks $43 million?
BILL Well, I think as it’s been explained there, that’s not a loan.
GUYON But it is a loan, because you signed a document saying it was a loan under the Public Finance Act. Otherwise it would have been unlawful. Do you remember that?
BILL I do remember being— I do remember the Cabinet discussion about it, of course.
GUYON So it is a loan.
English will be pissed off that he is being drawn into Joyce’s dirty little deal.
If, and I admit it’s a big if, Key demands real standards of ethical behaviour from his ministers, I don’t see how Joyce can stay. But, then, Joyce is Key’s mate and strong man.