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#sheepgate: National paid out money to settle a non existing dispute without legal advice

Written By: - Date published: 9:57 am, September 15th, 2017 - 26 comments
Categories: Abuse of power, corruption, john key, making shit up, national, Politics, same old national, spin, the praiseworthy and the pitiful, you couldn't make this shit up - Tags: ,

When the history of this National Government is reviewed by academics and scholars the tale of Sheepgate will stand out.  In future years people will wonder if it was even true or the insane invention of someone high on drugs.  Because if ever a series of posts deserved the “you can’t make this shit up” it is these.

Lets recap the history:

… a rich Saudi businessman became upset when New Zealand stopped live sheep exports following a particularly disastrous ship trip during which four thousand sheep died.  National made noises as if the ban would be reversed but then resiled from this.  To assuage the rich Saudi businessman’s feelings a total of $11.5 million of taxpayer’s money has been or is being paid.  The sums include a “compensation but not a compensation” payment which was designed to keep the lawyers away from it and which incorporated a payment to the Saudi businessman for intellectual property for hosting New Zealand sheep on a New Zealand designed farm.  The rest included the construction of a model farm in the middle of the Saudi desert and plane tickets for 900 sheep, most of which died after landing.

It seems clear the payment was essentially a facilitation payment to get the Saudi’s to sign a free trade agreement.  Not only is this on the face of it corrupt, but it has so far failed so it is also clear evidence of incompetence.

Initially McCully tried to sneak the issue through Cabinet and then hide the mess.  And when it was reported on National used that good old technique of blaming Labour for the situation.

The Auditor General became involved.  National celebrated a finding that McCully had not acted corruptly.  How low National’s standards are.

Here is a video of John Key in Parliament where he said that Cabinet was confident that the payment would remove the prospect of any litigation.  Marvel at the high quality level of distortion and diversion.  Key was extraordinarily good at this.

And here is video of McCully in Parliament saying that “I am satisfied that we would never have done so had we not been advised that the claim had some prospect of success.”

Advised by who?  An OIA seeking to verify the existence of any advice was buried by National but has recently been resolved.

And in a case of extraordinarily bad timing it was confirmed that no legal advice concerning the dispute from MFAT was ever received.  National paid out a large amount of money to settle a non existing legal dispute and did not even bother to receive legal advice before doing so and then tried to blame the opposition for it.

From Radio New Zealand:

The Ministry of Foreign Affairs and Trade did not provide legal advice to the government on the risk of being sued by a disgruntled Saudi Arabian businessman, documents reveal.

The admission that no legal advice on the lawsuit threat ever existed directly contradicts comments in 2015 by then-Foreign Minister Murray McCully that the ministry had taken advice on the issue.

The National government did an $11.5 million deal with Saudi businessman Hamood Al Ali Al Khalaf after Cabinet was advised in February 2013 that the Al Khalaf Group was threatening to sue New Zealand for $20-$30m. Mr Al Khalaf had invested heavily in New Zealand and believed New Zealand’s 2003 ban on live exports had left him misled and out of pocket.

The deal included using taxpayer funds to build Mr Al Khalaf a $6m agrihub farm in the Saudi desert, as well as flying in over 900 sheep and handing over $4m in cash.

The government argued that the deal saved New Zealand from the risk of being sued for a much larger amount.

However, MFAT and Mr McCully have long refused to release any legal advice it relied on in doing the deal.

In a 2015 interview on TV3’s The Nation, Mr McCully was asked repeatedly what the advice said and whether he would release it.

He replied “it’s the ministry’s advice” and “I’m not going to release the ministry’s advice”. When asked if there was any legal basis for a lawsuit, he said “the advice was that those circumstances did provide such a basis”.

Yet an Official Information Act response from MFAT “following discussion with the Chief Ombudsman” has revealed “it did not seek or provide advice on the extent of the risk of a claim in the New Zealand courts for compensation from the Al Khalaf Group against the government”.

“Effectively, the minister had misled the public,” said Labour’s David Parker.

“This confirms that the $4m cash payment was never legitimate and thanks to disgraceful covering up by MFAT and McCully it has taken more than two years to get an answer.”

If ever you wanted a clear cut case of National misleading Parliament and the country this is it.

26 comments on “#sheepgate: National paid out money to settle a non existing dispute without legal advice”

  1. Sanctuary 1

    “..National paid out money to settle a non existing dispute…”

    National paid a bribe.

    There, fixed it for you. 🙂

  2. Anne 2

    It’s interesting to note the demeanour of those seated around Key in the first video. Very quiet and unresponsive. Normally when Key was at his obfuscating best, they would be clapping and cheering. Not only did they know he was lying through his teeth, they were [perhaps] faintly embarrassed. English remained embedded in his notes and didn’t look up once – at least not until the end.

    • Once was Tim 2.1

      It’s amusing sometimes watching the surrounding National MPs eh @Anne? The Upston smilers/ smirkers, the Bennett new-found fashionista who sometimes looks like the smiley face and laughter has been brought to us courtesy of the Caci Clinic, the nodders, the buffoons, the ‘considered’ look on faces like FInlayson.
      I sometimes wonder the reason Parliament TV was brought in-house rather than letting the potential for independent media lose.
      Sometimes they look like they’re in a rehearsal for the Brown’s Bay Amateur Dramatic Society’s next pantomime

  3. cleangreen 3

    Great points there Anne. – very good intuition.

    “English remained embedded in his notes and didn’t look up once – at least not until the end.”

    English was guilty by association, and should be sacked the bloody crooked criminal he is!!!!!

  4. Quasimodo 4

    Is it safe to come out yet ? Is this knife-edge election over ?

    McCully might yet retire as a eunuch overseeing one of their harems.

    • Bastables 4.1

      Why would any sane family employ McCully as a Enunch? You’d want some one competent serving your household.

  5. francesca 5

    Sounds like Joyce got it wrong allright. Its not the 11.7 billion hole in Labour’s budget, its the 11.5 million thats now missing because of Nat’s bribe

    • ianmac 5.1

      Good point. Especially since even last night Joyce/English still trying to make a meal of the $11bil hole. Of course McCready and Key out of Parliament now so cannot be held in contempt of Parliament can they?

  6. Frankie and Bengie 6

    Can’t find any mention on Stuff. Strange that

    • DSpare 6.1

      This was on stuff today:

      Parker said Bill English and John Key would have been aware no legal advice existed, and said National likely continued the cover-up as it would have been “deeply embarrassed” about the “wasted expenditure”.

      https://www.stuff.co.nz/business/farming/agribusiness/96871875/no-legal-advice-given-on-saudi-sheep-farm-lawsuit-risk–mfat

      But I found this from 2015 more revealing. Murray McCully may not be seeking reelection, but he clearly had accomplices in the scheme. Bill English is particular is still around to be asked questions:

      from early 2012 Treasury officials were reluctant to give the green light to a proposal of initial funding of $4m towards Al Khalaf’s desert farm in Saudi Arabia… A pre-Cabinet briefing to Finance Minister Bill English stated: “Note that it is unclear what the benefits of this proposal are or what the potential costs are (e.g. impact on other trade partners). Treasury does not have sufficient information to assess the value of this new expenditure, and whether it is within appropriation… A year later a bigger deal with al-Khalaf was on the table.

      As well as the $4m payment, the Government would invest $6m in al-Khalaf’s desert farm as a “showcase” for New Zealand agriculture…

      Treasury officials were still unmoved by the merits, just before the deal was due to go to Cabinet.

      They wrote in a February 7 memo: “It does not provide a clear public narrative about why the funding proposal is being agreed to. Nor does it provide clear details of who will receive the funding and what they will be contractually obliged to provide.”

      A few days later a briefing to Finance Minister Bill English recommended he not support the proposal – and said Cabinet should be asked to agree, rather than just note McCully’s idea… A week later, another briefing paper extended the same advice not to support the deal: “It remains unclear what the benefits for NZ firms of the proposal will be.”

      However, emails from early March 2013 indicate Cabinet had given assent and the Foreign Affairs ministry were asking Treasury for help with their budget.

      But the following month, ahead of a meeting between English and McCully, officials were still voicing their concern.

      http://www.stuff.co.nz/business/farming/70844060/treasury-objected-to-4m-payment-for-food-security-partnership-with-saudis

  7. Macro 7

    If ever you wanted a clear cut case of National misleading Parliament and the country this is it.

    Deliberate misleading of the House

    It is a contempt to deliberately mislead (or attempt to mislead) the House or a committee, whether by way of a statement, evidence or a petition.[133] An example of contempt received explicit recognition in 1963, following a political cause célèbre (the Profumo affair). The House of Commons resolved that a former member, who had made a personal statement to the House that he subsequently acknowledged to be untrue, had committed a contempt of the House.[134] It has been claimed that there is an established constitutional convention that Ministers should always tell the truth to Parliament, as far as this is possible without harming national security.[135] Whether or not this type of contempt represents a convention, a Minister lying to the House is a serious affront to the authority of Parliament. The duty of candour on Ministers has been said to be essential if Parliament is to hold the executive to account.[136]

    https://www.parliament.nz/en/visit-and-learn/how-parliament-works/parliamentary-practice-in-new-zealand/chapter-46-contempt/

    But can we expect there to be any follow up action on this huge deception not only to Parliament but also to the people of New Zealand?
    How does the 1990 Bill of Rights or the Parliamentary Privileges Act apply in this case?

    Punishing parliamentary contributions

    The House may punish members or others on account of their contributions to the House’s deliberations: for example, if they attempt to mislead the House or a committee, or disrupt the orderly conduct of proceedings. It is also a contempt for anyone outside the House to punish or disadvantage anyone for what they say or do in the course of parliamentary proceedings. Such extra-parliamentary conduct may also amount to a criminal or civil wrong, such as assault or trespass to the person, and be in breach of the Bill of Rights 1688 and the Parliamentary Privilege Act 2014.[154]

    And will there be any consequences?
    I’m not holding my breath.

    • Tracey 7.1

      McCully and Key are not poor or brown or female. So no, no consequences. Their supporters condone this stuff in their own. Joyce is strategist, so he woukd have known.

  8. Tracey 8

    The speaker will have something to say, right? And the media are chasingvhim down now, right? And they are doorstepping Key and McCully, right? And wont stop til a head rolls, right? Yeah right.

    Who was Deputy PM at the tine cos he would have been in onbit unless the PM was keeping him the dark?

  9. SARAH 9

    I don’t know enough about the actions Parliament can take in a case like this where the whole of Cabinet were complicit. Can, for instance, their retirement perks be withheld as a punishment? It would be nice to think we don’t have to pay these criminals for the rest of their lives.

    • tracey 9.1

      Unless it is a Crime the conduct is determined byvthe PM of the time. In this case the PM was complicit, so nothing to be done here.

      • greywarshark 9.1.1

        @Tracey
        The PM of the time can decide can he/she? That is a perfect example of atemporarily elected person taking upon him/herself a quasi-royal right to pass judgment and make state decisions. The NZ gummint have connived to convince the NZ public that they are nonpareil, and they aren’t up to running a casino honestly.

        It should be noted that in Oz the Minister of Something has the ability to decide who is to be arrested and deported (from NZs living there anyway). How can you raise a reasoned and fair argument in the light of a government assuming these sorts of powers.

        Fair and reasonable. (Throws hands up in air and stumps away shouting something unintelligible but could be one of the sayings that Wikipedia has listed –
        “”Going to hell in a handbasket”, “going to hell in a handcart”, “going to hell in a handbag”, “go to hell in a bucket”, “sending something to hell in a handbasket” and “something being like hell in a handbasket” are variations on an American allegorical locution of unclear origin, which describes a situation headed for …”

        – and which has no certain end in their explanation which is even more alarming.

  10. ianmac 10

    “Sep 15, 2017 2:45 PMLaura Walters
    Bill English on the Saudi sheep deal:
    English wouldn’t be drawn on the allegation that Murray McCully misled parliament and the NZ public around the Saudi sheep deal.

    Claims by the Government a controversial Saudi sheep farm deal was necessary to avoid the risk of being sued have been rejected by MFAT.

    The deal involved spending $11.5 million on establishing an agribusiness hub and sheep farm in Saudi Arabia in partnership with influential Saudi businessman Hmood Alali Al-Khalaf.

    English says the Auditor General suggested there were procedural issues that could be dealt with better but that was it.”

    So just duck Bill English. “I Know nutting!”

  11. ianmac 11

    And talking of Dirty Tricks, From Stacey Kirk:

    “The Ministry of Social Development is the latest Government department to rule itself out of the “whodunnit” saga surrounding the leak of NZ First leader Winston Peters’ personal pension information.

    The ministry joins Inland Revenue in confirming, following investigations, their staff did not leak details of Peters’ superannuation payment.

    “Following information regarding Mr Winston Peter’s Superannuation payments entering the public arena, the Ministry launched an investigation to assess whether there was any indication that a Ministry employee may have been the source of the information.

    “That process is now complete, and we can confirm that all staff that had access to the relevant information had a reasonable business purpose for accessing it, and there is no evidence that this information was passed to a third party,” the ministry said in statement.”
    So who is left Paula Bennett?
    -https://www.stuff.co.nz/national/politics/96893330/ministry-of-social-development-says-its-not-to-blame-for-winston-peters-pension-leak

  12. greywarshark 12

    Make the nasty questions go away! Then I’ll come out from under the pillow. (Suggested response to aides from McCully.) There, there little Murray, Nurse Nannynat said to the beleaguered MP. Words only mean what you want them to mean, show them you are the master.

  13. Ms Fargo 13

    Labour foreign affairs spokesman David Parker said the National Government and outgoing Foreign Minister Murray McCully “sure as hell” misled Parliament.

    “For two years they forced MFAT to cover-up this fact… This sad cover-up is now in tatters,” he said.

    Parker said National relied on the claim the information was commercially sensitive to avoid answering questions about the deal in Parliament and Select Committees.

    “It’s scandalous that over $11 million was wasted on cash, equipment and sheep for Saudi businessman Hamood Al Khalaf when no debt was owed.”

    Parker said Bill English and John Key would have been aware no legal advice existed, and said National likely continued the cover-up as it would have been “deeply embarrassed” about the “wasted expenditure”.

    – Stuff

  14. Andy 14

    So whats the link to Brownrigg Ag?

  15. eco maori 15

    In my view national got played/conned by the Saudi Arabia they have multi media to. !!!!!!!!!!!!!!!!

  16. nzsage 16

    Evidenced by their miniscule response, the MSM see this as no big deal.

    They are failing democracy.

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  • Cost less of a factor for Kiwis seeking GP care
    Health Minister Dr David Clark says new data showing a sharp drop in the number of people who can’t afford to visit their GP is a sign of real progress. One year after the Government made it cheaper for about 600,000 Kiwis to visit their doctor, results of the New ...
    BeehiveBy beehive.govt.nz
    1 week ago