Journos don’t buy Key’s “may or may not” defence

Written By: - Date published: 8:43 am, June 2nd, 2010 - 42 comments
Categories: accountability, john key - Tags: ,

Feeling the heat in Highwater-gate, John Key resorted to a ridiculous ‘may or may not’ defence in the House under questioning from Pete Hodgson. But no-one’s buying it. Colin Espiner writes “Everyone in the press gallery knows that Key has an interest in a vineyard. That’s how come we all got very nice bottles of pinot noir from Central Otago last Christmas, with “JK” emblazoned on the label.”

Here’s the exchange between Key and Hodgson:

11. Hon PETE HODGSON (Labour—Dunedin North) to the Prime Minister: Does he stand by his statement to the New Zealand Herald last year that he has put certain assets into a blind trust that is ‘so blind I haven’t got a clue what’s in it’?

Hon JOHN KEY (Prime Minister) : Yes.

Hon Pete Hodgson: How can that be, given that the public now knows that he knows he can access the details through Whitechapel Ltd whenever he wants to by going to the Companies Office website?

Hon JOHN KEY: The member is incorrect. I refer him to the legal opinion that I tabled last week—

Hon Annette King: We know who wrote that.

Hon JOHN KEY: If the member wants to call those lawyers and Bruce Gray QC, who peer-reviewed their opinion, liars, she is welcome to, but I suggest that she does it outside the House—and I wish her good luck with that one. I tell her to be brave and go out. I refer to point six of the legal opinion, which says ‘Whitechapel Limited is the trustee of Aldgate Trust and may or may not act as trustee of other trusts.’ It is impossible to look at Whitechapel and know whom those assets are held for.

Hon Pete Hodgson: If I can find what is in his trust on any day of the week by going to Whitechapel Ltd, where I find only assets that were in his name at one time and never any other assets in the economy, why does he persist with the fiction that he cannot do so?

Hon JOHN KEY: Because I am accurate. Whitechapel is a trustee. It is a trustee for the Aldgate Trust, but it may also be a trustee for other trusts, and it may well have sold those assets. I have no knowledge of that.

Hon Pete Hodgson: Can the Prime Minister confirm that the assets held by Whitechapel Ltd concern wine assets, dairy assets, and real estate assets, all of which used to be in the Prime Minister’s name, and that Whitechapel Ltd contains no other assets whatsoever?

Hon JOHN KEY: No. Whitechapel is a trustee company. It is a trustee company for the Aldgate Trust, as supplied in the legal opinion. As that opinion said in point six, Whitechapel may or may not act as a trustee for other trusts. It is physically impossible for anyone to know whom it holds those assets for.


Whitechapel was set up at the same time as Aldgate, Key’s ‘blind’ trust, and it owns only shares that Key used to own. There is no evidence it is trustee for any other trusts or reason to think it would be. The lawyers’ “may or may not” can be taken to mean “does not” – if Whitechapel did run any other trusts, the lawyers would have said so because that vital information might clear Key’s name.

Next question for Key should be along the lines of: ‘does Whitechapel, the trustee of his trust, still own the shares he sold to it soon after becoming Prime Minister’

On Nine to Noon on Monday, National spinmeister Matthew Hooton said “it’s a bit silly for him to say he has no idea what’s in there…. and giving away wine from a particular vineyard that he knew he owned once and thinks he probably does now was unwise”. Yeah, from Key’s perspective it was a bad mistake. It pretty much gave the game away.

Key needs to reassure the public that elected him that he has acted properly and stepped aside from decisions when the shareholdings in Aldgate gave him a conflict of interest.

42 comments on “Journos don’t buy Key’s “may or may not” defence ”

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  1. Cnr Joe 1
    2 June 2010 at 9:20 am

    This government appears to be dodgy.
    Appearances can be deceiving.
    Am I being deceived?
    Why do they keep dodging?
    What a government.
    Next.

  2. Armchair Critic 2
    2 June 2010 at 9:23 am

    The significant conflict of interest relates to John Key’s farming/dairy interests and his government’s actions, especially in Canterbury.
    The wine link is small fry in comparison.

    • Bright Red 2.1
      2 June 2010 at 10:00 am

      true. but the vineyard is the key to unlocking the fact that the trust isn’t blind.

    • Bright Red 2.2
      2 June 2010 at 10:13 am

      maybe, but the vineyard and Key’s public actions showing his interest in it are the key to establishing the trust isn’t blind. once that is conceded, the other conflicts are opened up.

  3. rainman 3
    2 June 2010 at 9:26 am

    “Pinot Key-O’ – very good indeed.

  4. tknorriss 4
    2 June 2010 at 9:43 am

    Several points I raised in general discussion that would probably be best discussed on this thread.

    1. The companies office disclaims that it is the same as the share register of the company concerned and that interested parties should contact the company concerned for up to date information:

    Every company must maintain its’ own share register recording details of shares issued and shareholders. The Companies Register is not the share register for the company. If you have any queries concerning the company’s share details recorded below, you need to contact the company.

    Therefore, Labours allegation that the companies office records are a mirror for the activity of Whitechapel is not accurate.

    2. Companies are only legally required to update their share information at the companies office annually. So, the companies office is not a reliable source for investment decisions. (probably the reason for their disclaimer the companies office gives).

    3. The lawyers letter from Key states that they won’t give him those sorts of details anyway.

    Therefore, Key can only get information from the companies office. But Key would be making a huge leap making decisions based on information at the companies office that may not be up-to-date.

    4. Historical information is not much use anyway. What Key would need to know is what the directors of Whitechapel intend to do with the shares tomorrow. For instance, voting against raising the drinking age to benefit shares he thinks he has in a wine company may not be much use if the directors of Whitechapel intend to sell those shares and buy shares in an orange juice company that might be disadvantaged by Keys possible vote to keep the drinking age the same.

    • Lanthanide 4.1
      2 June 2010 at 10:04 am

      “But Key would be making a huge leap making decisions based on information at the companies office that may not be up-to-date.”

      Not really. It goes like this:
      I will do X because I own a farm, and if I own a farm, X will be good for me.
      I will do X, but if I don’t own a farm, I don’t mind because it won’t affect me directly.

      The high probability of owning a farm is all that Key needs to know to influence his behaviour regarding X.

    • Armchair Critic 4.2
      2 June 2010 at 10:09 am

      Technicalities, tsmithfield.
      He said it is a state of the art blind trust – do you agree?
      He said he could not know what was in his trust. Can you think of a way where he could know what was in his trust?
      For someone who promised higher standards, JK has not delivered. Again. Or do you think this is a good look?

    • Bright Red 4.3
      2 June 2010 at 10:10 am

      Companies may be legally required only to update their records annually but if you actually take the time to look at the companies that Whitechapel has holdings in you’ll see that they update their records regularly.

      You should note that Key isn’t arguing that no-one knows what’s in Whitechapel because everyone does.

      Key’s argument is that just knowing something is in Whitechapel doesn’t mean it is in Aldgate becuase of the “may or may not” line.

      Neither what you are arguing, nor what Key is arguing is credible.

      The company records of the companies Whitechapel owns shares in a regularly updated and they show that Whitechapel owns (and only owns) the shares that Key sold into it. In Jan and Dec last year, Key showed he still had an active relationship with Highwater.

      • tknorriss 4.3.1
        2 June 2010 at 10:18 am

        I don’t think its a technicality at all.

        Doesn’t matter how regularly records have been updated in the past. That is history. Whether you can rely on that to continue in the future is an entirely different matter.

        Besides, as I said, having knowledge of the historical situation is really quite irrelevant. It is what is going to happen in the future that is much more important with respect to business decisions. If Key makes decisions based on the historical state of Whitechapel, and that state changes then he could end up disadvantaging himself.

        No-one but the directors of Whitechapel is privy to the information as to future decisions, so the trust is definitely blind in the most significant aspect.

        • Armchair Critic 4.3.1.1
          2 June 2010 at 10:28 am

          The technicalities are (if I understand your comments correctly):
          a) he could only have been 95% sure, not 100% what is held in the trust, and
          b) he could have known 100%, but I have confidence that he chose not to.
          Sorry, ts, but that’s not good enough for the PM.

        • Bright Red 4.3.1.2
          2 June 2010 at 10:32 am

          ts. you’re barking up the wrong tree. Not even Key is using this silly line of yours.

    • Craig Glen Eden 4.4
      2 June 2010 at 12:31 pm

      While the companies office wont be able to tell you how many shares a company has at a particular time it will tell you what was last reported.

      No one is alleging some nasty smoke filled room deal has been done just that Key has not got a blind trust like he wants everyone to believe. Key has not been good with share numbers anyway “I have 30 50 maybe 100 thousand transport shares” The other interesting thing is that he is giving journalists bottles of wine Why I wonder he said on the taped footage the wine was for “his friends who had helped him out” So who are these friends and just how have these journalists been helping him out?

  5. Fisiani 5
    2 June 2010 at 9:55 am

    What a total waste of time. Pete Hodgson looks like the doddery old codger that he is. Yet another attempt at smear that backfires on Labour. When will they ever learn?

    • Lanthanide 5.1
      2 June 2010 at 10:06 am

      Obviously it won’t sway the National-faithful, but the disillusioned Labour voters that voted for him at the last election, coupled with the Blinglish affair (and any disquiet over the budgets, GST, inflation, ACE and ECE) will help chip away at Key’s support and make him appear as calculating and dishonest.

    • Armchair Critic 5.2
      2 June 2010 at 10:32 am

      “Pete Hodgson looks like the doddery old codger that he is”
      I don’t think so, he looks like a sniper stalking a hard-to-hit target.
      But John Key looks like the dodgy wbanker he is. Very un-primeministerial.

    • Fisiani 5.3
      2 June 2010 at 12:52 pm

      Watch poor Pete Hodgson get his arse kicked again today at QT question 8. (approx 2.30pm)

      • Fisiani 5.3.1
        2 June 2010 at 1:19 pm

        Arse kicking 101
        The Speaker of the House has decided not to refer a complaint, relating to the Prime Minister’s management of his personal finances, to Parliament’s Privileges Committee.

        The Labour Party has claimed that, although Mr Key has a blind trust called Aldgate to administer his assets, some of them went into a separate company – Whitechapel – that is not blind to Mr Key.

        Mr Key has denied any knowledge of Whitechapel’s existence.

        Labour complained that Mr Key misled Parliament about his knowledge of his investments.

        The Speaker, Lockwood Smith, has considered the complaint and determined that no question of privilege is involved.

        • Armchair Critic 5.3.1.1
          2 June 2010 at 2:18 pm

          I wonder if you really understand how this one is playing out.
          The issue has been driven by the media, which is a change from the last 18 months or so. With the media turning against National (albeit still giving them more positive coverage than any other party), this is not a victory for National.
          Labour would have had a big victory by bringing the PM to the privileges committee.
          Just getting the idea out amongst the not-so-interested public is still a victory for Labour. Come the election they can play the “John and his corrupt trust” line. It will be fresh enough in people’s minds for them to say “oh, yeah, I remember that” without Labour having to litigate it in detail.
          Same with Bill English and his trust, what Labour has done is tarnish the senior National MP’s credibility.
          The other thing for you to keep in mind is that if anyone turns up with evidence that the PM did know what was in his trust, and made decisions with a conflict of interest, that would likely be game, set and match to the opposition. It will be interesting to see what pops out of the woodwork in the months before the election. It will also be interesting to see if the PM can avoid letting slip with anything else that implies he is not above reproach.

      • Armchair Critic 5.3.2
        2 June 2010 at 2:51 pm

        Are you listening fisi??? Cop out after cop out from the PM. He won’t answer the question. Wonder why that is?

        • Fisiani 5.3.2.1
          2 June 2010 at 3:39 pm

          Hope you watched the Hodgson arse kicking that I predicted. Please please keep it up.

          • Armchair Critic 5.3.2.1.1
            2 June 2010 at 3:46 pm

            You must have a different idea of what an arse kicking is.
            I heard a PM who refused an opportunity to clear up some potentially serious concerns about his financial dealings.
            Saying it is not within his area of responsibility is weak. I want him to set the record straight. His dealings today sounded like he needs to wait for his masters to tell him what he should be saying.
            Pete Hodgson 3 – John Key 0

          • joe bloggs 5.3.2.1.2
            2 June 2010 at 8:23 pm

            heehee – I have just two words – H Fee..

  6. Fabregas4 6
    2 June 2010 at 10:01 am

    Doesn’t seem so to me- I expect honesty and integrity from the Prime Minister of our country. This does not appear to meet that criteria nor does it say much for his intelligence, or his humility either.

  7. Bren 7
    2 June 2010 at 10:47 am

    Question, how can you be sure that the companies mentioned are the only ones owned by Whitechapel? I tried to find a way where I could view everything owned by Whitechapel but couldn’t (if someone could point out how to do this – it’ll be much appreciated), it seemed the only way you could see what Whitechapel owned was to go to companies it might own and checking them out?

    • Armchair Critic 7.1
      2 June 2010 at 10:56 am

      The legal advice said Whitechapel could be trustee for other trusts. How about TGT stop equivocating and actually confirm that Whitechapel is trustee for other trusts – ones that are absolutely nothing to do with JK and his family. Other trusts that are so large that JK’s tangled involvement with Whitechapel is so dilute that he could not possibly know by looking at the Companies Office records.
      For the piece of mind of all the cynics (like me) they could offer proof to an independent third party, who could issue a statement confirming the above. That would be an effective way to shut the issue down.

      • Lanthanide 7.1.1
        2 June 2010 at 12:34 pm

        Yes, that really seems to be the way it is heading.

        “If we are to ascertain if it is a conflict of interest, we therefore need to know if Whitechapel does, or does not, own things on behalf of other trusts. Answer the question: does Whitechapel own things on behalf of other trusts, or soley the Aldgate trust?”.

        captcha: points

    • Bright Red 7.2
      2 June 2010 at 11:04 am

      Bren go to the companies website and search by shareholder. You’ll see all the shares that Whitechapel owns. Then, you can check who it bought them from.

  8. tknorriss 8
    2 June 2010 at 12:22 pm

    Perhaps the type of structure that has been implemented here is as good as it gets.

    Is there a better way to set up a blind trust arrangement?

    • Lanthanide 8.1
      2 June 2010 at 12:37 pm

      Yes, tk, the company that owns the shares on behalf of the blind trust should also own shares on behalf of multiple other trusts. Therefore it is “blind” in the sense that although you can see everything that the company owns, but because it owns so many different things for so many different trusts, it is impossible to know for sure which asset belongs to any particular trust.

      I would suggest, however, that this would need to be a very broad range of interests held by the company, because you could still look at it and say, for example, “this company only owns interests in farms and rural property, so surely my blind trust must consist of only farms and rural property also”.

    • Bright Red 8.2
      2 June 2010 at 12:41 pm

      yes, there are better ways.

      Anyway, the point is that Key’s trust isn’t blind. And that means he has conflicts of interest when issues relating to those shareholdings come up.

      That doesn’t mean he has been acting corruptly (like having secret meetings with his co-owners or anything) but it means he had to excuse himself from those decisions.

  9. sweetd 9
    2 June 2010 at 1:08 pm

    A parliamentary privilege complaint against Prime Minister John Key has been swiftly dismissed.

    Labour MP Pete Hodgson last week lodged a complaint against Mr Key, complaining he had misled parliament about his knowledge of details about his blind trust.

    In a letter to Mr Hodgson, released to media by Mr Key’s office this morning, parliament’s Speaker Lockwood Smith dismissed the complaint.

    The letter from Dr Smith is one sentence long and concludes: “I have determined that no question of privilege is involved”.

    Mr Hodgson maintains that Mr Key must know the details of what is in his blind trust. Mr Hodgson says this is because he was able to establish the details himself by accessing public records.

    Mr Key last week released a letter from his lawyers, refuting the claim. The letter formed part of Mr Key’s response to the complaint.

    http://www.stuff.co.nz/national/politics/3767558/Complaint-against-PM-dismissed

    • Bright Red 9.1
      2 June 2010 at 2:37 pm

      are you surprised? I can just see Lockwood taking his leader to privileges

      • True Blue 9.1.1
        2 June 2010 at 2:52 pm

        Just like Ms Wilson taking Aunty Helen. Gollum is a disgrace.

        [lprent: Content level is virtually zero. Completely unoriginal, like many of your other comments.

        Looks like trolling to me. You’d better raise your standard otherwise you won’t be able to comment on The Standard. Read the policy. ]

  10. uke 10
    2 June 2010 at 2:10 pm

    Why don’t Labour just come out and call Key a liar?

    He proudly gifted the wine bottles with his initials on the label, from a vineyard he doesn’t-shouldn’t-couldn’t know he owns… err, get real.

    These trusts and blind trusts are basically tricky little mechanisms by which the super-rich hide their incomes and conflicts of interest. Is there any other reason why such financo-legal chicanery even exists? Next thing, Key will be trying to legally transfer his assets to the family cat. I’m sure there’s a lawyer somewhere who can figure out the technicalities.

  11. sweetd 11
    2 June 2010 at 2:17 pm

    “Next thing, Key will be trying to legally transfer his assets to the family cat”

    You’d better look out for assets in the name of Moonbeam then. I think you will find the cat is the evil mastermind at the root of this.

    • uke 11.1
      2 June 2010 at 2:31 pm

      Yep, several Moonbeams on the company register. None connected with John Key, however, which certainly makes me suspicious… perhaps the cat is more a Mini-me type sidekick.

  12. Adrian 12
    2 June 2010 at 3:21 pm

    Lockwood obviously got a whole case! . The dairy interests are crucial, at the moment a lot of interested Canterbury people are looking for the land/irrigation/Key connection. It’s there and it will be found.

  13. jcuknz 13
    2 June 2010 at 8:34 pm

    Since we know that John Key has considerable private resoures it seems that for a publicity stunt he could have had a ‘private label’ printed and placed on the bottles he wanted to give away to freinds and supporters at Christmas … so it is not quite a forgone conclusion as Colin Aspiner suggests. It is nice to know it tasted good and wasn’t the dregs of the barrel, lucky Colin being favoured, doubt if he will get a bottle next year though, doesn’t deserve one after that comment.

    • Lanthanide 13.1
      3 June 2010 at 1:07 pm

      If that were the case I’m sure he would have said that’s what he did.

      He even went so far as to trademark the brand so he could use it without any issues in the future.

  14. Pinot 14
    2 June 2010 at 9:32 pm

    Dammit, you all miss the point.

    Was the plonk any good ?

    Any chance of a black market in the stuff ?

    John ? You there .. ?

    I won’t tell. Anyone …

  15. Jim Nald 15
    3 June 2010 at 5:34 am

    How about throwing in another distraction?
    Talking also about vasectomy …
    He “may or may not” be as blind as he is blank

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