Key – Undisclosed conflict of interest

Written By: - Date published: 1:40 pm, October 27th, 2008 - 31 comments
Categories: corruption, election 2008, john key - Tags:

National’s response to my revelation on The Standard that John Key owned shares had undisclosed conflicts of interest with Fletcher Challenge Forests is to deny the conflict. Let me restate the core conflict suscinctly:

John Key owned shares in Fletcher Challenge Forests. Fletcher Challenge Forests was a major user of Tranzrail, it depended on Tranzrail for its operations, and it was campaigning for the Government to purchase the rails from Tranzrail. John Key was asking questions about that prospective purchase. Fletcher Challenge believed it would benefit from that purchase. As an owner of Fletchers, Key stood to benefit.

Did Key directly mention Fletcher Challenge Forests? No. But just because he was lucky enough not to give the game away does not mean the conflict did not exist. Key was using his privileges as an MP to ask questions about a government action in which he had a special finanical interest. That is a conflict of interest.

31 comments on “Key – Undisclosed conflict of interest”

  1. lprent 1

    Arghh… No heading means that the permalink wouldn’t work. Now fixed

  2. Felix 2

    But it’s all in the past. Stop re-litigating the past.

  3. Lew 3

    Steve, how did National respond? I can find no trace of it as yet.

    L

  4. Danny 4

    Hi Steve,

    As I see it, it is not relevant that FCC “believed it would benefit” if the Govt purchased TR.

    What is relevant is whether a reasonable person would have expected the market price of FCC to be materially altered by the purchase of TR by the Govt.

    Without more information about the contract between FCC and TR (and how the identity of the majority shareholder in TR would impact the market price of FCC), then a conclusion about a conflict cannot be made. Therefore, as it stands, the bow is drawn too far to call the FCC shareholding a conflict.

  5. DeeDub 5

    Danny
    October 27, 2008 at 4:51 pm

    “Therefore, as it stands, the bow is drawn too far to call the FCC shareholding a conflict.”

    Whatever. Regardless of your call on this as ‘insider trading’ or not, Key is still in breach of parliaments rules and has been found out lying by omission AGAIN. Not a good look.

  6. Danny 6

    How exactly? Please …

  7. Chris G 7

    Great post Steve keep it up.

    Danny,
    How can you possibly think it is acceptable and admirable even for an MP to ask questions in parliament that related to shares he owned, with regards to not just Tranzrail, but FCC?

    The point is NOT whether he benefited. If it were we would therefore allow all sorts of shenanigans from our MPs but the only criteria to decide if it was a bad thing or not was if they benefited… what a ridiculous way for you to frame this. Like I have already said: you reap what you sow johnny. Time and time he asked questions about Peters not declaring a donation, well excuse me ive just found a possum in front of my headlights and hes got his Tranzrail eyes going Mad.

    Quite obviously, that is not the sort of activity people would expect of an MP and especially not of a potential PM. Why you act as if it was nothing is bizarre and me thinks it stems that you like Johnny Friendly too much and would be devastated that his Sainthood could be so diminished.

    Finally: Do you think Rodney would be up in arms if the same situation had been discovered of a Labour MP? …… Yeh, thought so.

  8. Danny 8

    Chris, what a whopping great strawman.

    “How can you possibly think it is acceptable and admirable even for an MP to ask questions in parliament that related to shares he owned”

    Didn’t do that …

    “The point is NOT whether he benefited”

    Didn’t state that …

    “Why you act as if it was nothing is bizarre and me thinks it stems that you like Johnny Friendly too much and would be devastated that his Sainthood could be so diminished.”

    Am not acting like that, and do not think that.

    Anything else Chris, was I on a grassy knoll back in ’63? Why don’t you read what I wrote before commenting?

  9. higherstandard 9

    ” my revelation”

    Very self-deprecating certainly no Winstonesque delusions of grandeur there.

  10. Rod 10

    There was once a song with words along the lines “I danced with a girl who danced with the Prince of Wales”.
    For goodness, sake, what is the relevance of what you are saying here?
    Who gives a hoot?
    Can you say “desperation”?

  11. Chris G 11

    Danny,

    Wanna answer the questions? or too afraid?

    ‘What is relevant is whether a reasonable person would have expected the market price of FCC to be materially altered by the purchase of TR by the Govt’

    Right there I’m taking from that: Key is a reasonable guy and didnt think he’d stand to gain anything. However in saying that you bring up the thing I find the most relevant: If this ‘reasonable man’ has to at a point weigh up whether he thought FCC would benefit/not benefit. Regardless of the decision, the thought process alone should trigger a truly reasonable person, to think that they should at the very least say something about their involvement. Why do you think (From clear implications made by your comments) that he didnt need to say anything?

    And, Again: What would Rodney do if it were a Labour MP?

  12. randal 12

    hey SP..keep up with the revelatin’
    I like it!

  13. Felix 13

    Danny,

    Why do you think it’s only the share price that’s relevant?

    Do you know what shares are?

  14. Chris G 14

    Danny is nit-picking and avoiding the more relevant point of, Why didnt he tell anyone? Instead Dannys telling us the relevant point is whether the share price would have/could have gone up. Mis-information artist, anyone?

    If someone cant see the problem with using parliamentary privilege to ask about the dealings of companies you have shares in or are connected to they are not being honest with themselves or anyone else saying its not a problem or that its warranted/fine.

  15. Dan 15

    Did anyone make sense of Key’s announcement on the hoof tonight? Not only are his mates in the banks bailed out, but the middle class who lose their jobs because of the banks stuff up get their mortgage payments. What about the families who lost everything to misrepresentation by finance companies/foolishness? It is all part of the same shambles.
    Did Mr English know anything about this call?
    It will be an interesting week as the Nats implode.

  16. Felix 16

    Dan,

    Key cares not that people might lose their home. He only cares that banks might lose their interest payments.

    That’s why he wants the govt to pay mortgages.

  17. randal 17

    so he was born poor. never went to work, therefore he must have got his money from someone else?

  18. Danny 18

    Hi Chris/Felix,

    Firstly Chris, I never implied that “Key is a reasonable guy and didnt think he’d stand to gain anything”. That was not even close to my point. If you want to continue to straw man then reply to someone else.

    Secondly Chris/Felix, you state “why didn’t he tell anyone?” The answer is simple. If there was a conflict then he should have disclosed, if there was no conflict then he had no need to disclose. So I am not “nit-picking”. Whether or not there was a conflict is at the heart of the issue. And, it follows, if it could be reasonably be said that the Govt purchasing TR would have a material effect on the price of FCC, then Key is in the shit, because THAT would be your pecuniary conflict with what he was asking in the House. Therefore, more information is needed on the link between TR and FCC before any real conclusions can be made. Which is what I stated, and what I asked SP to clarify.

    You line the ducks in the row and I’ll support you pulling the trigger, as should every honest kiwi. But not before.

    Finally Felix, yes, I do know what shares are.

    cheers,
    D

  19. Chris G 19

    Why then, for sake of transparency and making sure one doesn’t look shady, wouldnt he say anything? It would have been in his interest to declare such things early on. You could say honest mistake, but this was probably the second time he thought ‘hang on ive got shares involved in this’ (im unaware of which one was first Tranzrail questions or FCC) or upon the second time did the mind just go blank and he thought nothing of it – in which case he is Stupid.

    For the THIRD time (Although I know I’m probably wasting my time):

    What would Rodney do?

  20. Danny 20

    Hi Chris,

    “Why then, for sake of transparency and making sure one doesn’t look shady, wouldnt he say anything?”

    Fair comment. But if the contract between TR and FCC is such that any effect of a takeover of one was likely to have negligible impact on the other, why would he need to? Again, it all boils down to the relationship between FCC and TR, and SP’s “revelation” has failed to sufficiently address that point – so far.

    I, personally, would like to see our representatives err on the side of caution and disclose all actual and potential conflicts, of which this is probably one. But without more information it falls short of a serious issue.

    And Chris, ask Rodney, as I could only speculate. What a ridiculous question.

  21. Ianmac 21

    When confronted in the TV interview re Rail shares/conflict of interest, Key said that he “told no-one else about his shares nor asked any advice from his colleagues.” Not sure if that is relevant to Chis G 7:52
    Danny your posts are interesting because the other point of view that could be argued, is helpful to strengthen/weaken the case. Important that there are no loop-holes.

  22. Gooner 22

    Quote of the week from TV3:

    “Both major TV channels took a look at this story yesterday and turned their noses up at it”.

    Captcha: Worth 145th……maybe it was to Key!

  23. the sprout 23

    This issue definitely needs deeper exploration in public. Before the Election.

  24. Felix 24

    Danny if you know what shares are then why did you ignore my first (and obviously more serious) question of why you think it’s only the share price that’s relevant and not profits made by the company as well?

  25. Gooner 25

    Sprout, did you not read my quote from TV3. Their is no issue.

  26. Paul P 26

    Wonder how many MPs from all parties have landlines with Telecom and also hold Telecom shares? This is about the equivalent.

    Wow, talk about trying to join the dots where there’s no dots to join!

  27. Janet 27

    I wonder what scared the media off as Ali Ikram mentions? It would at least be worth asking Key about on camera to see if it provokes a ‘Tranzrail eyes’ response.

    Bullying from the National Party and their powerful friends I suspect.

  28. Dom 28

    Janet – ‘Tranzrail eyes’ is one of the most brilliant descriptions of Key I’ve ever read! It will now form part of my everyday speak – meaning ‘caught in headlights/shifty’!

  29. Janet 29

    Actually comes from Audrey Young I think.

  30. Felix 30

    Paul P:

    That does not represent a conflict of interest.

    Owning Telecom shares while using a parliamentary position to ask pertinent questions of the relevant minister seeking privileged information about the future prospects of Telecom based on the likelyhood or otherwise of the govt buying Telecom and the likely terms of such a deal, that’s the analogy you’re looking for.

    And not declaring that the conflict exists. And then lying about it when you’re asked.

    Mostly it’s about the lying though, wouldn’t you agree?

  31. Ratbiter 31

    The trouble is the to the Right, attempting to use your position in the house to achieve personal gain simply isn’t corrupt. It wouldn’t occur to them.

    “Corrupt” to them only means doing what you have to do to keep your government together and pursue your elected mandate, i.e. doing what “The Evil Clark” does!

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