Sheepgate: Government celebrates finding that McCully is not corrupt

Written By: - Date published: 6:01 pm, November 2nd, 2016 - 58 comments
Categories: Abuse of power, david parker, national, national/act government, Politics, same old national - Tags: , ,

McCully sheep in wolfs clothing

The report is out.  The Government will try and spin it to be a vindication of Mr McCully but if this is a vindication then we are in big trouble.  Because the report highlights a number of problems in the handling of the Saudi Sheep deal.

Murray McCully has got over the first hurdle in that his actions have been determined by the Auditor General to not be corrupt.  But there has to be the prospect of a Privileges inquiry into what he said to Parliament.

From Question time on May 27, 2015 (yes that long ago):

The Hansard for the exchange includes this text:

Hon MURRAY McCULLY: As I indicated in my primary answer, the agreement that was struck between officials and the Al Khalaf group included all of the intellectual property associated with shifting the Awassi sheep breeding operation from New Zealand to a new location in Saudi Arabia. Also in the minds of officials would have been the fact that the Al Khalaf group had taken legal advice and could mount a legal claim against the Government for an amount estimated to be up to $30 million. It is a bit rich for members of the former Government, who exposed New Zealand to the risk of a $30 million claim, to berate members of this Government for resolving the issue for one-third of that amount.

Hon David Parker: Given that his Government renewed the customs export prohibition order on animals for slaughter in 2010, and that it is perfectly legal for New Zealand to have a policy banning live sheep exports, how can he justify paying millions of dollars to settle a hollow legal threat?

Hon MURRAY McCULLY: I agree that the customs export prohibition order was renewed by the current Government. What was different was that we did not mislead the Saudi investors about the consequences of the roll over of that order. We fronted up and told them the truth, when the previous Government had actively misled them over many years and exposed the New Zealand taxpayer to a claim of up to $30 million.

Hon David Parker: Was the real reason the first $4 million was paid to pay off people whose influence in Saudi Arabia was getting in the way of the Gulf free-trade agreement?

Hon MURRAY McCULLY: I made it clear that one of the consequences, sadly, from this whole saga was that the relationship between New Zealand and Saudi Arabia was poisoned, and that poisoned relationship spilled over into the wider Gulf Cooperation Council. But I have also made it clear that the officials negotiating this matter had to consider the fact that there was a looming claim for up to $30 million, resulting from the actions of a Government of which the Hon Mr Parker was a member.

…

James Shaw: What legal advice did the Government receive as to the likely success of the potential claim by Mr Al Khalaf?

Hon MURRAY McCULLY: As I have made clear, the Government did not wish to proceed down that path, and it entered into talks with the parties to try to avoid such an outcome. I am satisfied that we would never have done so had we not been advised that the claim had some prospect of success. The member may wish to look at the Cabinet paper and see that there is a redaction there, which is a reference that would have been disadvantageous to the interests of the New Zealand taxpayers.

Get that?  McCully claimed that there was some sort of advice given that the Saudi claim had some prospect of success.  And it was all Labour’s fault.

The Auditor General has reached a contrary view.

As to whose fault it was the report says this:

2.35 From March to May 2009, domestic and international animal welfare groups lobbied the Government to ban the trade in live sheep for slaughter, expressing animal welfare concerns and opposing any resumption of shipments. This lobbying included 5750 letters and emails received by the Prime Minister’s office between 2008 and 2009 (and an additional 4551 “campaign” emails and letters).

2.36 The Ministry and MAF considered the competing issues involved in exporting live sheep, including the relationship with Saudi Arabia, animal welfare concerns, and the legality of a ban on the export of livestock for slaughter. In May 2009, the Ministry advised MAF to continue negotiations on the Memorandum of Understanding (and retain the animal welfare and monitoring requirements).

2.37 Negotiations on the Memorandum of Understanding proceeded at a slow pace. In August 2009, Mr Carter made public statements that he did not think Saudi Arabia would be able to meet the standards he would require for the transportation and treatment of sheep exported for slaughter.

2.38 The Al Khalaf Group and the Saudi Arabian Government were surprised and disappointed at what they perceived as a change in the Government’s position on the export of sheep for slaughter. They considered that this change had not been communicated directly to them previously.

2.39 On 17 November 2009, Mr Carter met with the then Saudi Arabian Minister of Agriculture in Rome during a Food and Agriculture Organisation of the United Nations World Summit on Food Security.Mr Carter outlined the conditions about animal welfare in the Memorandum of Understanding for live exports with Saudi Arabia. The then Saudi Arabian Minister of Agriculture responded that Saudi Arabia could not accept those conditions and that, accordingly, there could be no resumption of the live sheep trade. Ministry officials’ records show that the diplomatic relationship between New Zealand and Saudi Arabia deteriorated after this meeting.

2.40 In 2009, Sheikh Hmood and his companies’ representatives also confirmed that they were not amenable to New Zealand’s imposition in the Memorandum of Understanding of what they considered unacceptable extraterritorial requirements.

 

I know we live in a post truth era but this passage is impossible to reconcile with McCully’s statement to the house.

And what about the advice that the claim had some sort of prospect of succeeding?

3.42 The intention behind Mr McCully’s early negotiations with Sheikh Hmood was to find a “commercial solution” to address Sheikh Hmood’s sense of grievance. However, we did not find evidence of officials’ real analysis of other options. We also did not find evidence of Ministers or officials requesting or receiving internal or external legal advice on the extent of the risk of a claim for compensation from the Al Khalaf Group against the Government.

3.44 Mr McCully told us that it was unfair to criticise the Cabinet paper for failing to analyse the consequences of a litigation or a compensation negotiation process that it had expressly ruled out.

If the paper had expressly ruled the risk out then why did McCully tell Parliament repeatedly that there was litigation risk?

Not only are there these issues but McCully’s competence as a Minister has to be questioned.  The Auditor General said this about his cabinet paper:

I found some significant shortcomings in the Cabinet paper, including that it:

  • did not clearly explain that the Al Khalaf Group would own the goods and services costing the New Zealand Government $6 million;
  • did not identify how the $10 million figure was arrived at (a figure that has since risen to $11.5 million);
  • signalled the risk of a claim against the Government based only on the $20-$30 million figure that the Cabinet paper said was suggested by the Al Khalaf Group (there was no assessment by Ministry officials of the substance of that legal risk);
  • did not include any analysis about whether there were any other potential obstacles to the signing or ratification of the free trade agreement, apart from the concerns of the Al Khalaf Group about the export of live sheep or the assertion by the Gulf Cooperation Council that this was the only obstacle to the free trade agreement; and
  • identified that New Zealand exports could double to $3 billion in five years if a free trade agreement was signed with the Gulf Cooperation Council, without including any analysis.

Based on these significant shortcomings, I am concerned at the lack of robust analysis and the quality of information that was provided to Cabinet on this matter.

The Auditor General’s concerns deserve to be repeated.

… I share many New Zealanders’ concerns about the arrangements. I found significant shortcomings in the paper put to Cabinet in support of the decision to enter into the Saudi Arabia Food Security Partnership. The contract’s benefits to New Zealand were unclear in the Cabinet paper, the business case, and its subsequent implementation.

McCully’s days as a Minister should be numbered. At least in a properly functioning democracy.

58 comments on “Sheepgate: Government celebrates finding that McCully is not corrupt ”

  • Comments are now closed

  1. tory 1
    2 November 2016 at 6:17 pm

    The Auditor-General reports:

    ‘I found no evidence that the arrangements entered into as part of the Saudi Arabia Food Security Partnership were corrupt. To understand whether there was corruption, we looked at whether there had been an abuse of power for private gain or an offence against the Crimes Act 1961 by a Minister or an official. The payments did not amount to bribery or facilitation payments. Instead, they were made as part of a legally valid contract for services. Public money was spent within the necessary financial approvals’.

    McCully clearly bullshitted the Cabinet and therefore must go, however I am picking he will not stand at the next election. No great loss and I hope Nick Smith will join him. This will be a great result for National as they have been able to rejuvenate their MP’s and not having to rely on the dinosaurs like Labour has to.

    • Richard Rawshark 1.1
      2 November 2016 at 6:43 pm

      Bullshitted the Cabinet, are you really that gullible and think your wonderful government IS actually that honest.

      Tory, they ALL, including the PM new about it, do not think for 1 millisecond Murray did anything without consulting the brothers and John you idiot.

      He pitched the lone wolf story SOLEY to save anyone else from having to resign if it went pear shaped with the AG, That’s how they fucking roll.

    • Draco T Bastard 1.2
      2 November 2016 at 7:00 pm

      National are dinosaurs. It’s the basic nature of conservatives.

    • One Anonymous Bloke 1.3
      2 November 2016 at 10:08 pm

      McCully knows what a witness looks like. Charity demands that I respect your affected naivety.

  2. Arthur 2
    2 November 2016 at 6:29 pm

    Once again. We did nothing wrong and it’s all labour’s fault.

  3. Macro 3
    2 November 2016 at 6:37 pm

    Not corrupt – just incompetent and dishonest.

    • Draco T Bastard 3.1
      2 November 2016 at 7:18 pm

      It was an attempted bribe and it should have been recognised as that.

      That it wasn’t is disturbing.

    • AB 3.2
      2 November 2016 at 9:35 pm

      The AG is using a very narrow financial definition of corruption,not a moral definition. That’s all. She’s even at pains to explain that fact.

      • Macro 3.2.1
        2 November 2016 at 9:52 pm

        Weasel words don’t make his actions any better though.
        If we had a non-corrupt competent and honest government, he would be gone by now.

        • One Anonymous Bloke 3.2.1.1
          2 November 2016 at 10:14 pm

          If the National Party were anything other than a vehicle for vested interests he wouldn’t have been selected in the first place.

        • mosa 3.2.1.2
          2 November 2016 at 10:31 pm

          Helen Clark would have had him stood down while waiting for the AG report.
          Once again they have misled parliament, once again a serious offence.

          This whole saga and not only McCully but John Keys judgement must be called into question here…again.

          Key of course cant or wont see what all the fuss is about as he has invested a lot in his relationship with the Saudis and is used to doing the deal and to hell with the consequences.

          The only win here is for the millions of sheep who were destined to weeks of misery before their ultimate death in the desert of a nasty foreign country.

        • AB 3.2.1.3
          3 November 2016 at 10:43 am

          Quite – but for the AG to actually describe him as ‘corrupt’ would have required someone to see him walking out of a meeting with the Saudi guy while stuffing an envelope filled with $100 bills into his back pocket.

          Mind you – he’s such a trougher for the good life that comes with such gigs there wouldn’t have been any room.

        • David H 3.2.1.4
          4 November 2016 at 10:08 am

          If we had an honest and competent Government, it would have been because of the Snap election called years ago, over the mishandling of… Add your Own I don’t need Writers Cramp.
          But for reference I refer you to Blip, and the Magnificent list that they prepare. At what must be great batterings at their sanity, from verifying everything.

    • Bearded Git 3.3
      3 November 2016 at 9:11 am

      @Macro +1000 and still lying that this was Labour’s fault despite the a-g finding no evidence at all to support this. Incredible.

  4. Richard Rawshark 4
    2 November 2016 at 6:55 pm

    5000 sheep died on a boat that caused the end live sheep exports by NZ.

    an act laid by the Labour government due to the public outcry over this incident.

    What McCully did was circumvent public opinion and try to forge a deal behind our backs with those very people.

    and you say AG there is no corruption, the only solution to our political problem I see is action.

    Sorry.

  5. Wyndham 5
    2 November 2016 at 7:06 pm

    – – – – and for a completely biased and partly incorrect report, read Audrey Young’s latest effort in the Herald.
    ( Sorry. Can’t supply link at present ).

    • Richard Rawshark 5.1
      2 November 2016 at 7:53 pm

      Fox news hacks that’s all they are, people you know faithfully week in week out same old bullshit. Labour suck aren’t National just rock stars.

    • Bearded Git 5.2
      3 November 2016 at 9:17 am

      @Wyndham agreed…..Young is always biased but she has reached new heights of bias in that Sheepgate article….maybe a nod and a wink came from above.

      Doesn’t she realise she loses credibility as a journalist by ignoring the facts?

      • tc 5.2.1
        3 November 2016 at 3:30 pm

        Young is no journalist she is a shill for national with zero objective analysis skills.

        The msm is full of them

  6. Mike the Lefty 6
    2 November 2016 at 7:08 pm

    Not corrupt maybe.
    How about incompetent, spineless and kow-towing.
    No maybe about that.

  7. dukeofurl 7
    2 November 2016 at 8:18 pm

    “Will no one rid me of this troublesome priest ?”

    Is MacCready still alive and kicking and up to a private prosecution

    • mosa 7.1
      2 November 2016 at 10:34 pm

      I think MacCready has given up, he has been strangely silent for months.

      He is probably on Keys hit list.

  8. One Anonymous Bloke 8
    2 November 2016 at 10:04 pm

    The absence of evidence of McCully’s evident corruption is totes reassuring.

  9. mosa 9
    2 November 2016 at 10:40 pm

    I bet this is the last we will hear about the whole sheepgate issue.

    Nothing to see here as McCully has doing nothing corrupt.

    End of story.

  10. pat 10
    2 November 2016 at 11:58 pm

    technically not corruption ….but corrupt in every other sense

    • Henry Filth 10.1
      3 November 2016 at 5:00 am

      “Technically”. Ah yes, “technically”. Lovely word, “technically”.

      I rather think that the corrupt are well practiced at doing corruption in a way which is, on the surface, not corrupt.

      However. It would be either ignorant or disingenuous to assume that the only form of corruption is the equivalent of bunging two hundred and fifty bucks to the person doing your driving test.

      • Draco T Bastard 10.1.1
        3 November 2016 at 11:55 am

        I rather think that the corrupt are well practiced at doing corruption in a way which is, on the surface, not corrupt.

        Well, not illegal any way – especially after they’ve written the laws – but everyone knows that it is.

  11. Siobhan 11
    3 November 2016 at 10:45 am

    Funnily enough I’m just flicking through a copy of Ross Meurants “The Beat to the Beehive” (as you do on a Thursday morning). Last chapter is a slightly disconcerting recap of the fall of Mussolini and his mistress.
    It concludes
    “Remember Government threats to sue the Auditor General for deformation merely because his findings were critical of Government. (4th Labour Govt at the time?)
    We are all well down the road of abuse of power by the political party in office in our country today. The key to change is in you hands. At Least it still is at present. The alternative? Keep you eye out for a good strong steel girder”

    Followed by a suitably tasteless picture of Mussolini hanging from a girder ‘taken by the authors father.”.

    a) Imagine trying to publish that sort of thing today.
    b) Auditor generals have always been hobbled into towing the line.
    c) Jeezus…Ross Meurant…but you know, if the powers that be, world wide, don’t start growing some sort of moral compass who knows where we will be in a few generations…..

    • Anne 11.1
      3 November 2016 at 11:06 am

      I met Ross Meurant once about 20 years ago. It was in a reasonably formal setting. He was dressed as a cowboy… the full works including hat (think he had a hat on), ultra tight jeans and cowboy boots.

      Somewhat fitting I think.

      • Siobhan 11.1.1
        3 November 2016 at 11:16 am

        Well there’s a coincidence!. My husband also met him once, in the reasonably formal setting of a police cell. Meurant wasn’t wearing stirrups then either, but he had a nice set of fisty cuffs 😉

        Meurant is also no stranger to bribery allegations.

        http://m.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10541133

        The opening line from Fran O’Sullivan is very much pertinent to this conversation…”If New Zealand had an independent Corruption Commission…”

        • Anne 11.1.1.1
          3 November 2016 at 12:26 pm

          I dropped the stirrup line because I wasn’t sure if those metally things they wear on the back of their boots are what they call stirrups. He wisely left them behind on that occasion anyway.

          I also saw him in 1981 close to Eden Park on the day of the final Springbok test match. He was walking with his gang of Red Squad thugs towards our group (we were minding our own business at the time too) dressed in red and black riot gear. He likes dressing up. We ran for our lives. Wish someone had caught it on camera. So funny looking back on it.

        • Chuck 11.1.1.2
          3 November 2016 at 5:43 pm

          Ross Meurant is Winston Peters Achilles heal.

          Now I am no fan of Nicky Hager, but this would be his “Pulitzer Prize” if he was able to navigate the history of those 2 chaps.

  12. Scott 12
    3 November 2016 at 11:07 am

    The A_G’s report needed to be more damning if this was to be more than beltway issue. It will be forgotten by those that matter – those that decide elections (if they ever cared about it at all which I doubt).

    I don’t actually have a problem with the way they tried to solve two issues at once. Sure, the threat of litigation was overblown, but it costs you quite a lot to defend such claims even if you think your defense is reasonably solid. Plus in doing so you’d also have the embarrassment / reputation factor over our Government telling them one thing, then doing another, and now giving them the bird.

    The major factor was clearly to try to remove a roadblock in the inter-state relationship. Whether that worked or not I don’t know. While there was no trade deal, that roadblock may now be gone and others still stand. Who knows. I’d be careful about judging that with the benefit of hindsight. I don’t know if we now want better relationships anyway – again hindsight might suggest we don’t.

    • Sacha 12.1
      3 November 2016 at 1:41 pm

      “the threat of litigation was overblown”

      There was no plausible basis for an action under any law. Zero.

    • framu 12.2
      3 November 2016 at 3:15 pm

      There was no evidence of any legal threat to start with. (Or docs to back up the amount of $ claimed was needed to “fix” things)

      in short – theres nothing, nada, to back up the govt’s argument beyond they felt it would achieve something

      Since when did the ends justify the means re: govt? – Especially when they dont even have the most basic data to back them selves up?

  13. Draco T Bastard 13
    3 November 2016 at 11:53 am

    The was a bribe. Simple as that and thus McCully should be in jail because of it. Why the AG found otherwise should be a serious concern to NZers.

    Also, why are we even wanting to trade with such a despicable regime anyway?
    Are we really so lacking that we even need to contemplate doing so?

    • Scott 13.1
      3 November 2016 at 1:22 pm

      I agree with the last part Draco. There are serious question to be answered about Saudi Arabia’s links to ISIS, and their shared anti-shia goals. I’m not sure I’d be rushing to pitch our tent with them.

      I’m not so sure if that was as clear back in 2010 when this deal was done, but even then any of the strident Islamic states came with a lot of baggage.

    • ropata 13.2
      3 November 2016 at 2:53 pm

      Far worse than anything Taito Philip Field ever did. National are well aware their brand is degraded and beginning to stink, after their sorry record of scandals and dirty deals. They would have been desperate to save face on this one and brush it under the carpet

      • Scott 13.2.1
        3 November 2016 at 3:08 pm

        You must be talking about a different Taito Philip Field to the one that was convicted of 11 counts of bribery and corruption, and 15 charges relating to attempting to pervert the course of justice.

        Sorry. One shady deal done without any apparent personal interest involved and certainly no criminality, it hardly compares to that.

        • Stuart Munro 13.2.1.1
          3 November 2016 at 3:36 pm

          One shady deal eh. Bribing Shane Jones escape you, or are you just in the longest river in Africa?

          • Chuck 13.2.1.1.1
            3 November 2016 at 5:50 pm

            “Bribing Shane Jones escape you”

            Was that the lifetime supply of X-rated DVD’s? or the Ambassador for Pacific Economic Development?

            • Stuart Munro 13.2.1.1.1.1
              3 November 2016 at 8:01 pm

              Muzza’s a shabby little trougher who should be in jail, but I don’t think he was behind Jones’s porn problem.

        • ropata 13.2.1.2
          3 November 2016 at 6:00 pm

          I stand corrected! 😳

  14. adam 14
    3 November 2016 at 12:21 pm

    We have in power those committed to selfishness as a political goal. This is but one example of this, with McCully being a fine example of the the selfish ethos.

    It has seen the death of goodness and compassion, and the rise of the individual self absorbed in — I’m so bloody important, you are just weak culture.

    The longer we are on this path, the more insane it will get. And if the last year and a half is anything to go by – it’s going to get bat, and dodo.

  15. Ed 15
    3 November 2016 at 12:53 pm

    I suspect that to be clear the subject should be that the Government is celebrating that McCully was found to not be corrupt on this occasion.

    I am not clear about the law – presumably it is not a crime or corrupt to make a bribe (which is how some see what McCully did), but is corrupt to receive a bribe to make ministerial decisions. Is it legal to make a bribe? Despite a written “contract”, there does not appear to have been any “service” or “facilitation’ provided for the value of $11.5 million. If a company had made the payment, would it have been tax-deductible?

    We should also celebrate that McCully has not been found guilty of dishonesty, incompetence, misleading Cabinet, or of being a typical National MP – those were of course not investigated.

  16. Henry Filth 16
    3 November 2016 at 4:34 pm

    Out of interest, how would (or could) this issue been dealt with under the disputes resolution provisions of the TPP?

  17. NZJester 17
    3 November 2016 at 5:27 pm

    It is amazing how easy it is get to an innocent verdict when you get to pick everyone who sits in judgement of you and knows they will get no more work if they give the wrong verdict.

  18. Richard Rawshark 18
    3 November 2016 at 5:28 pm

    Finally Mainstream and bloody brilliant analysis from Bryce.

    http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11741557

  19. Richard Rawshark 19
    3 November 2016 at 5:39 pm

    Perhaps the Sheiks told john if he wanted a quiet term with no..isis issues, a small payment of 30m would take care of it.

    peace for sale, I reckon the Arabs could make a stunning earner on the protection racket if they had a mind too.

    Now , now tinfoil hat, it’s ok, daddies here to guard you from the nasty aliens and their leader John key.

  20. Rob 20
    3 November 2016 at 9:49 pm

    Must say David Parker’s interview on morning report was priceless
    No raised voice just answering the question and giving the facts of this seedy event
    No National support people on the horizon
    This National Party episode of arse licking is what John Key’s government represents