Written By:
Marty G - Date published:
2:37 pm, May 29th, 2010 - 75 comments
Categories: accountability, john key -
Tags: blind trust, conflict of interest, highwater-gate, trust
The only question that matters in Highwater-gate is this: “is John Key’s trust really blind”? The answer seems to be “no”. I’m sorry, but the lawyer’s letter that Key released yesterday just raises more questions about his not so blind trust.
The letter explains the relationship between Whitechapel and Aldgate, the trust. Whitechapel is the trustee. Whitechapel has legal ownership of the shares for Aldgate’s benefit. In turn, Key’s lawyers, TGT, own Whitechapel and run it, directing its actions in respect to Key’s shares (which appear to have been none).
But why doesn’t the lawyers’ trust company just run Key’s blind trust directly? The lawyers’ letter misdirects by saying Whitechapel “may or may not” act as trustee for other trusts but the companies register proves it only owns the three companies that Key used to own – Highwater, Dairy Investments, and Earl of Auckland. Whitechapel exists solely as a legal fiction between the ‘blind’ trust and the lawyers who actually direct it.
Why does Whitechapel need to exist?
The lawyer’s letter says that Key is not a beneficiary or trustee of Aldgate, which means he legally has no control. But in this year’s Register of Pecuniary Interests, Key declares a beneficial interest in Aldgate. Why the discrepancy? And how does Key get assets back from a trust he has no interest in?
But that’s a side issue. The real question is whether or not the trust is blind. As it stands, it is demonstrably not blind. You and I and Key can see what is in Aldgate it at any time by seeing what Whitechapel owns.
We’re still waiting to hear an explanation for the legitimate existence of Whitechapel other than as the way to see Aldgate’s assets.
We’re still waiting for an explanation of how the trust is blind given that everyone can see into it.
We’re still waiting for an innocent explanation for Key saying he was having “a lot of fun” owning a vineyard after he had signed the shares over to the blind trust.
We’re still waiting for the innocent explanation as to why the wine he gave away to “people who have helped me” (Tracy Watkins enjoyed hers) was labeled with the name of the vineyard he had supposedly cut his links with and why another owner of Highwater trademarked the label.
With no satisfactory answers forthcoming and National’s telling response being to attack people for asking questions, rather than answering the. Attention must begin to turn to conflicts of interest that arise from the shares held for Key in the not so blind trust.
Kiwis have the right to trust that politicians will do what they say and to be confident that their decisions are not influenced by their personal interests. To protect his own reputation, Key needs to open up.
The current rise of populism challenges the way we think about people’s relationship to the economy.We seem to be entering an era of populism, in which leadership in a democracy is based on preferences of the population which do not seem entirely rational nor serving their longer interests. ...
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You have clearly summed up Marty. Perhaps the Speaker will comment that the issue is not just one for Key (lets off the pressure?) but for all Blind Trusts. This would put all the MPs in a bind for Blind.
Yes – best post on this issue IMHO. Because Ari is probably too modest to repeat his comment on the previous thread, I’ll do so for him:
For me, that nails it better than all the other analysis by the Standard… with all due respect etc. I’ll admit I haven’t been following this particularly closely, and by the time I start reading about the difference between beneficial and pecuniary interests my eyes glaze over. I’d say, therefore, I’m fairly typical of the audience the left are trying to reach on this.
If there’s an issue here, that’s it. Key already has so much money, selling the idea he’d manipulate legislation to get his hands on some more isn’t going to fly. Especially when decisions made by NACT tend to benefit business generally… Key’s boat just happens to be one of those that rise.
However the question of claiming black to be white – I don’t know what my interests are and have no way of knowing, when a simple bit of research (especially if you’re versed in finance) can tell you – is simpler, more germane, and far more likely to actually be right.
Key’s crime here seems to be to have treated the public like idiots who’re incapable of independent thought, let alone research.
You don’t need to care about beneficial and pecuniary interests Rex, you just need to recognise the use of certain language as a “tell”.
Whenever you see a denial that is built around one of these technical phrases, it is weasel words, trying to give an answer that they hope is technically correct, but that they know is a lie with respect to the real question.
Been out the country a few days and find this barrel scraping. Get a life
The simple solution would have been to use what looks like the solicitor’s trustee company TGT Ltd as the nominal owner of the properties or shares. The company presumably owns various property in trust for various entities. It would have then become impossible for anyone but the entities themselves to know which particular piece of property was owned by which person.
The Public Trust owns huge amounts of property but no one except the PT knows who are the beneficial owners.
Having a single purpose trustee like Whitechapel owning stuff is inviting problems.
Still waiting for the media to go after him. If this had been HC they woulda been all over it.
They aren’t going after him because its a meaningless puff of smoke and is going to do NOTHING whatsoever to Key or National. Maybe if Labour stayed on track and actually debated policy they would be more popular, instead of muck-raking. Kiwi’s hate this kind of gutter politics……
Hate the game, not the player
No, all indications are that the MSM aren’t going after Jonkey about this because they’re all a bunch of paid up stooges.
Rewritten by Crosby Textor this would read:
Let’s target Helen and Labour over a driver who exceeded the speed limit, a fund raising painting – we’ll attribute the signature to her claiming it was a painting by her, and label any socially responsible policy ideas as “interfering nanny state” even they’re all meaningless puffs of smoke and is going to do NOTHING whatsoever to Key or National but will undermine Labour’s credibility. Of course some will say “Maybe if NACT stayed on track and actually debated policy they would be more popular, instead of muck-raking. Kiwi’s hate this kind of gutter politics ” but in truth, deep down at the sub-conscious level where Key needs to be sold to the voting public, NACT support comes from the visceral, self gut level rather than from any rational and deeply philosophical area so that’s where we will focus our campaign.
There will be no fall out on John if he just continues in his normal smile and wave manner. He doesn’t have to say anything as our media minders will ensure that if things get too hard we’ll remove him from the situation and create a spin to make his inadequacies look like “typical kiwi fallibility”.
The problem for Key and NACT is that the crosby-textor glue is coming off the back of the wine bottle label to reveal the unsavoury contents.
The problem is that NACT chose easy targets to sell to the public. “Helen was speeding to get to a Rugby game through a town”. Every one understands how that could be bad. “Helen signed this painting and it was sold as her art work when she didn’t do it” easily looks like fraud. Whether or not what National were peddling was true became irrelevant because Helens personal image wasn’t nice and cuddly. She was an easy target.
Now look at this. “Blind trusts that he can see making a money for a guy who gives away some of his wages”. Trying to stick this to the smiling, waving sound bite is just too damn hard. When the shit don’t stick it is considered muck raking. Fair? no. A fact of politics? Yes.
Out of interest, Crashcart, why did you say “Blind trusts that he can see making a money for a guy who gives away some of his wages” rather than something like “Blind trusts that he can see making money for a guy who already has loads of money and made it in that shady world of financial trading that caused the last recession”?
I would have thought the public would be more aware of the latter circumstances than the former.
Because like it or not politics is a popularity contest. It’s about how you can sell yourself to the public and that is how he is perceived. His PR team have invested a lot of time and money in it. Unless Labour realise this is how the public see him and not “a guy who already has loads of money and made it in that shady world of financial trading that caused the last recessio” they will never understand why they can’t make shit stick.
You may not like it but polls confirm that a lot more people see Key the way I describe him rather than the way you just did.
You seem to be over-interpreting polls, or projecting onto them. I think, just as a statistical phenomenon, more people know he’s rich than know he’s rich AND he has given away some portion of his Prime Ministerial salary. It’s called the ‘conjunction fallacy’ and it’s well researched (see and stage one PSYC text).
Just because National is leading in the polls does not mean that more people are aware of him forgoing his salary than are aware of him being rich. Those who know both are a sub-set of those who just know he’s rich (unless you think there’s a lot of New Zealanders who think he doesn’t have particularly much money but he gives away his salary?
Not that he gives away his salary anyway…
Again, Key is a manufactured political image whose credibility is and always has been suspect. Eventually the shallowness behind the sound-bite becomes exposed as the muck that is the truth behind the image sticks in the public consciousness. This is the basis of the political image manipulation that is crosby-textor and NACT.
Suspect to you and I. However the Polls show that it isn’t suspect to the majority. You are fighting against a PR team that have built one hell of a sellable product.
Everyone leave Key alone.
Crashcart says so. big bruv says so.
Gee I wonder why?
Eventually saleable products, like wine, start to go off and become unpalatable and consequently unsaleable. Products with no substance eventually become recognisable as shoddy and Key and NACT are exactly like that.
“Helen signed this painting and it was sold as her art work when she didn’t do it’ easily looks like fraud.”
funny how the simplest answer is usually correct
So you agree Bill was rorting his expenses, and John is lying about his trust being blind?
keeping it simple just for you. No.
the long explanation, these accusations are just lame attempts by labour to smear Bill and John. Labour can’t seem to get in in their heads that the public have moved on from the nastiness of the clark regime. they want there politicians nice, and smart, and not talking in a sing song hillbilly voice like phil goff
That’s awesome TR.
Ah, so it’s just a “National good, Labour bad” argument from you. Now you’ve confirmed you have nothing to add I can ignore all your other comments on this post.
The paintings were for a fundraiser for a charity.
You look like an conspiracy fool. It is indeed funny that the simplest answer is usually correct.
yea, i’m a fool because i don’t believe that people should sign their name to others work. i was so foolish to follow the plagiarism guidelines at uni. seeing as you play hard and loose with those rules Lprent …….
How about “signing” a bottle of wine that you didn’t make TR? That is fraud and done to buy approval perhaps out of taxpayers money? Or an undeclared gift received by Key?
That’s fraud and deception TR!
I hardly think JK gave the impression he made the wine, or that the receivers were suffering under such a delusion.
But JK gave away wine labelled Highgate that wasn’t. Difference?
no legs on this story boys…let it go…
it is always fascinating to see how politicians seems to slide their way around and through these things and simply carry on. but it never lasts – it always catches up in a great torrent at some point. perfect example is winston bjeikle-peterson.
Do remember VTO according to half the people here he did nothing wrong. Hell some of these people don’t think Taito Philip Field did anything wrong.
want to talk about Key? Or is it the ‘they did it too defence’.
You won’t find me defending field or peters.
I despise the slimy Nats as much as I despise your beloved nazi Labour. There is no surprise to find pollies are crooked. Whoop-de-doo. What do we expect? You are all the same.
Liabour needs to be a credible opposition.
There is plenty to worry about.
This is just fluff.
No, it’s not – what it is is pure corruption but I’m not surprised to find a wingnut trying to defend Jonkeys dodgy dealings under the “well, they do it too” excuse.
I love the shonky fascist Nats as much as I love your beloved gutsy Labour.
Nastynal needs to be a credible and honest Government.
There is plenty to worry about.
This is starting to unveil Jonkey’s bluff.
Considering the other bits and pieces of Jonkeys history that have been repeatedly hidden from casual I suspect that if he “open’s up” his reputation will be going down the gurgler.
Draco T Bastard
Labour’s reputation will be going down the gurgler. We await the next polls just to see what happens; my bet would be Labour loosing favour with the public.
my bet is that National will pick up a few percent on the back of the budget because the focus was all on the income tax cuts at first. but that will just be a temporary change. the trend is bad for national and being on the telly looking unconvincing isn’t helping key.
This is about Key’s reputation and reflects the norms shifted by those associated with him and his party. Bugga the polls. No need to be betting or gambling or trading on people’ sentiments or idiocy. This is a matter of right or wrong, not Right or Left.
So the polls make it right?
In 1930s Germany I guess they did.
Why? It’s not their leader who’s being shown as a liar.
Doug, I’m always intrigued by the “polls” defence (as opposed to an argument based on the merits of the case).
Are you therefore saying that Helen Clark did nothing wrong for her first term, and much of her second? Even though some resignations and “scandals” that the right still go on about, actually occurred during this period?
The PM was very popular. Labour was well ahead of National in the polls. Therefore, her critics should have all shut up. Even when they thought she had done wrong, when they thought she had questions to answer … nobody should have been asking those questions. Because – well, there were these polls, you see.
Is that how it works? And when does it stop? What’s the magic number?
Is this an issue that will force Key to resign? Can something here be proven to an extent that the PM will lose his job? If so then damn straight, shoot for the moon. If not then the whole point of this is to try to discredit Key in the hopes of wining the next election. Like it or not you have to win the polls to win an election.
If this is not going to cause him to resign (which I think we all agree it won’t) then the only positive effect for labour would be it shifting the Polls in its favour. So sorry to say Gobsmacked but the polls are the true measure of how well this whole incident plays out for Labour and I can’t see it being good.
Cashcart, weighing the effect on ‘The Polls’, like most utilitarian cost-benefit analyses, always depends upon when the line is drawn, in terms of time. I have no idea what the immediate effect of this issue will be, but it is largely irrelevant. Sooner or later, governments create public dissatisfaction in them (or boredom). When that – larger – process kicks in then these smaller moments create an amorphous, almost-unremembered-but-not-quite, ‘atmosphere’ that ‘there was always something a bit fishy about them’. They get woven into a narrative to help people explain to themselves why they feel less inclined to support the government ‘now’ (whenever that is).
Remember Don Brash’s comments in Parliament post-the 2005 election when he declared that the Labour-led government “was the most corrupt in New Zealand’s history”? That was a deliberately chosen strategy to attack Helen Clark, in particular, at her strongest point – the trust people had in her. At the time it was ludicrous grandstanding and obvious politically motivated hyperbole but, by the end of that term, a lot of New Zealanders (who, for all sorts of reasons were moving away from Labour) would have sensed that general message of ‘corruption’, ‘staleness’, etc. and comforted themselves that their disenchantment was supported and justified by what had been repeatedly echoed in news bulletins, tv news headlines, etc..
It is in these ways that people cast around, post-hoc, for reasons for doing what they already want to do for other reasons. If they find those reasons readily at hand, the movement away from the government is quickened.
It is in this way that repeated stories about John Key’s ‘odd’ maneuverings of his wealth, his carelessness over handling sensitive issues, relaxed approach to the truth, etc. – irrespective of the detailed or technical ‘truth’ of those stories – will come to have a longer-term effect on ‘The Polls’ and will resurface, in the form of a vague atmosphere concerning his and his government’s inadequacy, and quicken National’s demise. I say this because it’s pretty much the way with all governments in our ‘representative’ system.
I can imagine it now, Joe Public first thinks to himself and then voices it to others – “Yeah, John used to seem alright but, you know, he’s not really up to it now and I guess it’s because, after all, when you’re that rich, how can you know what it’s really like for the average person. He’s never had it that hard – explains why he smiles so much!”. At that point, Joe – perhaps with some sense of nostalgia for the good old, aspirational days of 2008/2009, will sigh and tick some other box than ‘National’.
Exactly my thoughts. But I would never have been able to put it together in such perfect elegance as you have. Well done!
Jim Nald
This is a matter of right or wrong, not Right or Left. Do you think “H-FEE Mark 11′ has been good for Labours re-election chances?
A blind trust that is not supposed to be seen but can be seen is bad, is wrong.
My name is Dug (a.k.a had a spade in the head for all to dig).
Do you think Key’s trust is blind as he promised, given that you and I can go and see what Whitechapel owns right now?
Like him, I don’t need to think. He can see, you can see, I can see 😎
Rob Muldoon use to say bugger the polls and I think this is just the type of situation where Muldoon would be right. The next poll does not matter because keys credibility is shot as was Blinglish’s with his Double Dipton act. This lot have serious credibility issues, just wait for the super city costs to roll in then GST and that growing gap with Australia and people will realise Key was aspirational all right but not quite how many voters thought. Giving NZ to the people who have helped him was not quite what they had in mind.
Suddenly shower head changes don’t seem so bad !
I wouldn’t be freely invoking Rob *cough cough* Muld ……..
But this is a matter of public interest, of right or wrong. Not being cute with the polls. It is the duty of any party in opposition to shine the light on the issues and we must expect nothing less.
TransparencyNZ et al: are you watching? Thanks to this lot in Govt, NZ will be aspiring to do better for anti-rort/anti-corruption standards.
At the cost of the next election? Because if you can’t make it stick to the point that you either convince Key to resign (not going to happen) or convince people to vote Labour (which would show up in Polls) then Labour ends up looking like they are all about personal attacks and that doesn’t play well for Labour.
When I guy gets his break making money on trading in the Kiwidollar, want cant he do in this country?
He can be an inside trader/politician on Transrail. He can own shares in Dairy so his Party allows rich dairy squatters to seize water. He can own shares in mining and let the industry into the National Parks. He can own shares in wine and allow the booze barons to profit from youth bingers. He can let Rodney run loose cutting up the remaining state assets and packaging them for sale. Its called laughing all the way to the bank. Key is so good at it he laughs in our face and the envious get taken in because they really believe that behaving this way is the mark if success not moral bankruptcy.
Pinocchio???? Pino key o???? There has to be something in that!
Dave: But I guess that Key has no real reason to enhance his own fortune so I guess its more to do with gaining popularity amongst his voters. Paula Bennett is probably doing her thing for the eyes of their voters as well.
Ian he’s doing it for his class. This is Rogernomics mark 2. Capitalists are never satisfied with 50 million. They need to increase their wealth or it dissappears. Key is rewriting the rules so his class can cream off the assets and make workers pay for it. Where he or Bennett personally gain, is that the new rules also benefit them personally.
Okay, good summation Marty, but as the letter from TGT says, Whitechapel may be the trustee on many trusts, so it’s not specific to the Aldgate Trust, and therefore Key.
I was waiting for one of your Righties to raise that.
Whitechapel doesn’t own any shares apart from the ones that Key used to own and it was set up when Key became PM.
John Key’s “shrug, duck and grin” is showing him to be utterly careless in his attitude towards the majority of people in this country.
By forcing the ETS tax on us, after adding to the GST rate, not to mention the previous hike in food and clothing costs, MV registration fees, is inexusable, given we are still in a recession, a fact which showed blatently on the stock exchange just recently.
He says with a shrug, that he’s unaware of his assets .. he’s ducking for cover because he knows he blundered, because as a leader in charge of a country’s people and assets, he should surely know full well about his own assets. Now he’s grinning at the thought that given his so-called “personal fabourability” with his public that with another shrug … and a grin, he’ll get away with an audacious error of judgement.
Excuse me everybody,
Crashcart would like you all to stop focusing on Key.
Thanks.
Wouldn’t they love for this to go away. The comparison with Paintergate is instructive, both occured early in the PM’s term, both were over matters of almost zero direct material import, and both had little apparent impact on their public approval at the time.
But the right’s propaganda machine never let Paintergate go, depicting HC’s mis-handling and lack of forethought about signing the painting as a massive flaw in her character. By contrast Key has been caught out absolutely flat-footed in a bald lie here. His plain and obvious statement that he did not know what was in his blind trusts, a statement made to the House is contradicted by the plain and obvious facts. There is no wriggle room about whether Key has lied and misled the House here.
Yet in the larger scheme of things so far I’ve seen little to suggest that this is connected to anything nefarious… it was just the kind of lie that slips fluently from the tongue of men like Key when they feel the need to say the right thing to the right people. Middle NZ may of course not be too distressed by this; a certain deep and unspoken sexism means that NZ will tolerate, indeed sneakily admire, this behaviour in a male PM…but not in a woman.
What counts is how this story is played from here. I doubt it will hurt Key in the short-term but in the longer run the fact of his casual, blatant lie is an undeniable character flaw. Highwatergate (however much that term fleebs me) is a good water carrier, but given the double standard in play, and the right’s keen desire to shut it down… ol’smile and wave will slide on by unscathed unless the left can tie and link this episode into Key’s glib pathology.
capchta = LIES (Lyn it’s sodding sentient again!!!)
Nope – just the language is really good for inference making…
Surely key is not in any gate, but in the
‘Pm has trust issues in winebox scandal’
‘Winebox inquiry into PM called for’
Winebox lies haunt PM
Winebox answers demanded from PM
‘PM in fresh Winebox scandal’
The sad thing would be if they weren’t in the process of starting the asset sales and dodgy culture process all over again…
Anyone hear Holmes’ derisive dismissal of the issue this morning on Q&A? “Who cares about
Whitechapel and whether he (Key) knew or didn’t know. Nobody does” he said. Conveniently ignored the ‘conflict of interest’ angle and the fact that Key blatantly lied in the House.
Those who predict it will not get much public traction are probably right in the short term. It may not seem complicated to those of us who take an interest in politics, but to Jo and Mary Bloggs (and Holmes) it is way too mind bending. Any longer term publicity is up to Labour to play it out effectively and not be side-tracked.
I don’t usually watch Q+A and seeing that awful Tory Holmes this morning reminded me why.
Didn’t he do media training for Brash?
I thought it was Key. Perhaps he media trained both of them. Whatever… you have to wonder why he is so defensive of Key. Does he owe Key? Wouldn’t surprise me. The ‘rich pricks’ are very good at looking after one another.
No surprises here from Holmes. He stopped paying attention a long time ago and is well past is use by date to be in such a role.
Guess he’s just happy to tow the line of his paymasters and pick up the cheque. It’s a disgrace to have him presenting what purports to be a balanced look at politics.
Don’t think this is going to be the killer punch for ShonKey but just chips away at the facade and bit by bit the real guy is revealed.
Thanks for the great explanation MartyG of the structural set-up of Aldgate and Whitechapel. Interesting that in this clip Key appears to understand the set-up alot better than any of the MSM whose questions really don’t hit the spot. Very revealling
Guess he’s just happy to tow the line
Minor Idiom Greeble
Keep banging on guys. It is the only way that some distraction from attentioon on the budget can be generated and a side-effect is that a splash of poop might leave a residual smear on Key.
It would be much neater if someone could come up with something genuinely bad about the budget and even neater still if some real dirt could be found on Key, but then ……. beggars can’t be choosers eh?
We’ve written plenty about the budget’s problems – hell check out the headline article right now.
Do you think Key’s trust is blind as he promised it would be given that you and I can see what it in it right now?
The real problem is not with the blindness in Key’s trust, but the depth of blindness in Labour’s caucus and the bloggers on this site.
Gus. don’t cry in public. If you’ve got an argument to make make it. Whining and failing to defend your hero is pretty telling – it shows you can’t excuse the fact that the trust isn’t blind.
Gus, what is it about “PM’s wine” that makes you blind to Key’s abuse of his blind trust ?
Naismith.
But seriously you are so out of touch on this issue its painful. Where were you when Winston was sucking money off \’contributors\’ ? This is the real problem we have to deal with within Labour and that is our hypocrisy – we cant scream blue bloody murder Marty G when we were WORSE. It was beyond disgraceful and plain stupid to think the public have forgotten the blind eye HC gave to Winston\’s appalling lack of \’trust fund\’ ethics. And that was the tip of the iceberg. Were is your shame ? You are just feeding the right wing with the crap you keep posting. It may strike a chord with die hard labourites such as yourself but more moderate people just get turned off by it. You are doing more harm than good.
Gus, I think that Winston is/was relatively small beer compared to John. It is an old adage that past behaviour generally predicts future behaviour. If he is fiddling his blind trust (selling ‘PMs wine’ from an investment of which he is not supposed to have any knowledge), what else is he capable of ?