- Date published:
8:54 am, May 28th, 2015 - 103 comments
Categories: Abuse of power, capitalism, corruption, Economy, exports, farming, farming, International, Minister for International Embarrassment, national, overseas investment, Politics, same old national, the praiseworthy and the pitiful, you couldn't make this shit up - Tags: murray mccully
Murray McCully used to be a feared operator. Dubbed “the black prince” his wielding of the dark arts of politics created awe in the minds of those who admire that sorts of thing.
More recently he has become a major embarrassment. His handling of the MFAT restructure was shambolic and he was only saved by persuading former head John Allen to fall on his sword and take the blame. His handling of issues concerning the Malaysian Diplomat and the attack on Tania Billigsley should have persuaded anyone beyond any doubt that he is not fit to hold office.
His latest escapade involves paying large amounts of money (up to $11m) to a Saudi businessman to settle a legal dispute that did not exist and which is probably, at least in New Zealand, statute barred.
He tried to defend himself yesterday in Parliament. As words cannot adequately describe how awful he was I thought it best to include the video.
David Parker was trying to get McCully to confirm how much money had been paid to the Saudi businessman to settle the long running dispute. McCully claimed that actions of the fifth Labour Government had exposed New Zealand to potential liability of up to $30 million. The actions were the stopping of the live export of sheep, a policy decision made after 4,000 sheep died on a ship bound for Saudi Arabia and apparently subsequent discussions which led him to believe that the ban would have been dropped. National renewed the ban in 2010.
Words used by others to describe the transaction included “bribe” and “corrupt”. The payment appears to have been made to persuade an influential individual to support New Zealand’s proposed free trade agreement with Saudi Arabia.
Parliament reached peak cray with the following interchange:
Hon David Parker : Can the Minister point to any other example where the New Zealand Government has ever paid millions of dollars to an overseas businessman in order to advance a free-trade agreement?
Hon MURRAY McCULLY : I cannot point to any such example, because I do not think New Zealanders had a Government as stupid and dishonest as the Government that Mr Parker was a member of.
Seven years after its demise the fifth Labour Government is still being blamed for all of the country’s woes.
McCully was questioned this morning on Morning Report about the payment.
Guyon Espiner did a good job and McCully was absolutely dreadful.
He said that there was “an active misleading of the individuals who had invested over that period which would have led them that had they continued to invest they would have been able to export live sheep for slaughter to Saudi Arabia.” Mistake number one. A Minister of the Crown should never ever publicly agree with someone who apparently wants to sue the Crown about the basis of their claim.
McCully was asked if New Zealand would have lost the Court case, if one had ever been filed. McCully answered another question and talked about a claim of up to $30 million dollars. He was asked if NZ Inc had actually paid compensation. McCully then again answered another question.
Then Espiner asked a Zinger. He asked if a liability waiver had been obtained so that there would be no prospect of New Zealand being sued. McCully blustered and said that he was not going to get into the detail. He eventually came up with the response that the Government was satisfied that it had met that objective. The Government being satisfied it will not be sued is not the same as the businessman accepting the payment in full and final settlement of his claim. Either the waiver exists or it does not. Saying that you are confident you will not be sued suggests to me that a cast iron waiver had not been obtained.
I received the distinct impression McCully’s nose was attempting to grow during the interview.
Whatever the background the distinct impression is that New Zealand money has been paid to an individual not to settle a non existent legal dispute but to curry favour so that the Gulf Free Trade Agreement is signed. There is an unparliamentary word for this sort of behaviour.
Update: Maybe there was the threat of legal action but because of actions taken by National, not Labour. From Dimpost (h/t Sacha):
When you pay someone to be quiet so you can get what you want it's called a bribe. #HushMoney
— David Shearer (@DavidShearerMP) May 27, 2015
@danylmc @MatthewHootonNZ Plenty more to come out. See Question Time today. I'm not there as I am in Auckland talking, consulting, engaging
— Andrew Little (@AndrewLittleMP) May 27, 2015
Will National support McCully’s campaign for FIFA President?
Probably already got the GCSB on it and it’s obvious that he’d be a great fit.
my thoughts entirely – might even get the $11m back 😉 (in someones back pocket)
So far there is no evidence that a legal opinion was sought or given. An approach from a lawyer that the Government could be sued for $30million is not enough cause to pay up.
Did I get the impression that the Speaker was not covering up for McCully? Could this have a Key move to abandon McCully with an eye on the 2017 election?
I think even Carter has standards and modest though they may be McCully was in breach of them!
I haven’t seen those standards, so given Nats don’t do anything without a CT strategy in place, perhaps McCully is going to London (and Lockwood coming home)
Carter, imo is worse than Wilson, but plays the same role for the government as she did. I was disappointed with her performance. I thought she would be impartial. Turned out Lockwood was the kind of Speaker I thought she would be.
Wasn’t Speaker Carter involved with the earlier tinkering with the sheep export problem?
Edit: John Key and David Carter privately assured him that exports would resume when National came to power. (Dimpost)
That is what Hooton is claiming (no evidence produced to date as is required by the right of the left – even when evidence is produced – emails from Hager’s book)) – and if he is correct it explains Carter turning into a proper Speaker yesterday to throw McCully under the bus to save himself and Monsieur Key
Again, it’s not a secret: http://www.stuff.co.nz/business/farming/2287062/Live-sheep-exports-to-resume
Old Mickey seems to suggest we cannot believe you.
Matthew, did you detect a change in carter yesterday? A tendency toward the government speaker having to answer, in contrast to some more recent exchanges?
I don’t watch QT often enough to judge.
Not like you to not form an opinion just cos you don’t know all there is to know 😉
McCully’s “answers” in question time say there was no legal opinion sought or received. Who needs that when you’re a stone-cold genius like him?
I thought he said something like he didnt think MFAT would do something like make a payment without legal advice?
Sounds to me like National got a big juicy donation in advance of a policy change ( but kept the money off the books)
No other possible conclusion that you would pay out someone on the situation described, unless you dont want unpleasant truths coming out in court.
“unpleasant truths coming out in court.”
You could have a waiver but they threaten to sue anyway, knowing that they can expose some stuff a politically driven group would not want aired… so, despite having a waiver, you settle. That’s a possible scenario.
“Either the waiver exists or it does not. Saying that you are confident you will not be sued suggests to me that a cast iron waiver had not been obtained.”
Not having the law on your side does not stop people suing others. It is possible that there was a waiver but the Saudis were going to challenge it on other grounds or just sue to embarrass the government… The Crown would weigh up the cost of defending (even to a win) against a settlement.
Of course, were that the case one wonders why McCully wouldn’t just say that.
Funny how human rights don’t come into it when seeking a free trade agreement with Saudi Arabia, while at the same time making a case to go to war in Iraq for human rights.
Remember how the nationalities of the 9/11 bombing were mostly Saudi’s? Funny Iraq used to be secular but now after the illegal war, it is like a poster child for turning to Muslim in the middle East.
Gosh those human rights are a moving target with National.
Any else looking forward to 100 lashes for putting up a website criticising the government – I guess that is what John Key wants shut down here in NZ of freedom of Speech and well as selling a few oil rights maybe.
Who knows, NZ does what the puppet master in the US dictates.
As for Murray McCully, everything he touches turns into a liability.
Love the detail that we paid this guy’s NZ company to send his sheep to his Saudi company. Cosy.
It was more than ‘send’, much more, they were FLOWN.
I’m interested in this network of supply farms – it looks like the Key junta is building a middle east version of Oravida. A please explain is certainly overdue – we’ll probably get a Brownlee response – how dare you ask me such questions.
Yes Stuart, Unmistakable arrogance from Brownlee, Groser, Tolley, Findlayson and now McCully. Parata has a “born to rule” air of superiority .
It’s getting to them !
I’m guessing this man was chosen so they can defend themselves with the smoke and mirrors of blaming it all on the previous Labour government.
They have also potentially created a ticking export time bomb for our farmers in the middle east by not having control of that farm with all that prime NZ breading stock.
If the farm is successful and stock numbers increase I can see the meat exports of the sheep from NZ farm being squeezed out by the descendants of those very sheep. Then there is the large loss of NZ Jobs in the meat industry with all the processing being done overseas by cheaper lower paid workers. There has been a lot of problems in that area of virtual indentured workers being tricked into low paying jobs that they can not legally quit to move to a different employer. With the talk of trial farms being set up in other countries as well it sounds like National is exporting farm jobs now also and not just the meat processing ones. A few investors are likely to get very rich at a huge cost to the average NZ farmers future profits.
Yes, I’ve been thinking this myself about whether we’re potentially screwing over more of our farm exports by doing this. Is this National’s bizarre method of diversifying the economy?
Off topic, but does it annoy anyone else that every issue now has to have “gate” added to the end of it?
T Chris. Are you hoping to distract from the topic? Suppose you set up the FIFA issue as a diversion?
That is why I said “off topic”
Do you have a sense of humour?
Are you getting gate fatigue or fatiguegate? 🙂
It all gos out my waste-gate
It’s been that way since Watergate-gate.
Danyl offers a concise timeline:
Thanks Sacha fascinating. Occasional Standard commentator thinks that the threat of a lawsuit was because of National’s actions and not Labour’s.
From the article:
“According to Hooton (his stories are paywalled at the NBR), a very wealthy and influential Saudi businessman named Hmood Al Khalaf, who had a business importing sheep contacted National when they were in opposition, and John Key and David Carter privately assured him that exports would resume when National came to power.
When National won the election in 2008, Al Khalaf supposedly invested tens of millions of dollars in New Zealand farmland and a ship that could transport sheep to Saudi Arabia. But National didn’t change the law.
So Al Khalaf hired Mai Chen to prepare a lawsuit against the government, claiming for ‘between $20 million and $30 million. He also, allegedly, used his influence in Saudi Arabia to block a free trade deal between New Zealand and the Gulf States.”
And people think we don’t have to worry about the investor clauses in the TPP. Look what can be achieved without the OOMPH of the TPP behind it. How much bigger would the settlement have to be under TTP??
Wayne! Wayne! Where are you Wayne? We need your reassurance it’s going to be perfectly ok!
Hamood invested heavily into farm assets in NZ, as well as converting a cruise liner for transport. His family have been in the live sheep game for hundreds & hundreds of years. Hamood invested on the assurances he was given from the then Labour Government run by Helen Clark, via MFAT officials – at least one of which is still with the ministry today. Hamood relied on the assurances that live sheep exports would be continued. The 2011 Government delegation was ambushed by Hamood about the fact he was lied to by the former government (his words, I was there). It was clear that the FTA would not be concluded with the GCC despite substantive agreement already reached between the GCC & NZ. Minister McCully established a special envoy (who is now working in investment banking) to broker a solution for NZ and the GCC. The investment in the Saudi farm to allow breeding for slaughter was seen as the most effective way forward. A tender to NZ companies was issued seeking parties that were keen to establish a farming center of excellence in Saudi – there were many companies keen on taking part – why ? It is a great opportunity and show case for NZ excellence. A plan was agreed, and then executed – there was a fly in the ointment, a local NZ’er nutter tried to blackmail MFAT claiming that MFAT had stolen his idea to solve the problem with a breeding farm in Saudi. For the record this was done in the months leading up to the last election – how nervous wa steh Government about this getting out then ? (MFAT ignored this nutter, and I do wonder if he has been leaking this to the media as nutters are disposed to do ?). The legal threat from Hamood & George was kept pretty quiet, and is news to me although one of the MFAT/NZTE guys in Dubai has come from a top law firm so suspect he evaluated the claim/risk. Is the amount of money compensation reasonable ? Hard to tell, however, if it leads to the FTA being signed then it will make a huge difference to NZ trade in the region, and the dollars at question here will be peanuts.
Interesting. Can you shed any light on Hooton’s claims that Key and Carter offered assurances to Hamood?
No idea about Hooton’s claims….the truth and his world don’t often intersect. His behaviour on the 2011 delegation was disgraceful.
From speaking to Hamood personally, I know that he believed that the National Government would endeavour to do its best to allow live sheep export – he had made his investment based on prior assurances. The argument was that if National couldnt swing the change then it would never happen in NZ under a labour/green govt. Hamood’s partner George also received this message, and it is what I believe stopped any legal action (if there was any). There was also concern that the MFAT official who made the original commitment on behalf of the Clark government was still employed by MFAT – they would have liked to see that person removed from MFAT completely. I was amazed that the Saudi intel was that good on our public service – Hamood joked to me, that I would be shocked at what the Saudi government knows about us.
So this MFAT official is the one who made the promise initially. When was this? Who was he talking to? Did he do this off his own bat because he believed the Nats would soon be back in power?
Certainly the Nats wasted no time in trying to get live sheep exports back as this 2009 article shows:
Unfortunately for Carter it was just too unpopular with the public.
Why would Hooton make this up?
During your time with MFAT or whatever position that led you to be having these conversations, did you or anyone else you overheard tell the Saudi’s that in a democracy, a new government may undo things done by a previous government or vice versa? And that “promises” by opposition parties are relatively meaningless?
If you or I did this sort of shit, Micky, I suspect we’d be facing prosecution under section 105C Crimes Act 1961.
But the Crown can’t prosecute itself, I guess (or can it?)
A minister could be …
The cheek of McCully trying to blame Labour for it though. It looks like they were up to their ears in it.
From the horses mouth, labour were the govt of the day whose officials made promises and assurances to Hamood. He would swear an affidavit on that point.
Citation please old mickey. Hooton says that the only people who made promises were National MPs.
Wheres Hooton citation ?
I heard it directly from Hamood, and George.
Can I also suggest that that you also ask Phil Goff.
Hooton only mentioned those – doesn’t exclude an earlier set of assurances as well.
Correct. But it is not a secret. David Carter spoke publicly about this at the start of the government’s term. http://www.stuff.co.nz/business/farming/2287062/Live-sheep-exports-to-resume
My understanding is that private promises were also made from opposition. I wrote about this (behind the NBR paywall) here: http://www.nbr.co.nz/opinion/gulf-games-fail-deliver
See my comment at 18.104.22.168
Just because a MFAT official said something to some Saudi businessmen that doesn’t necessarily mean the Labour government supported the resumption of live sheep exports.
With all due respect, it will come out that it was more than an official who just “said something”. Our MFAT officials don’t say anything that is not aligned to policy, and carefully avoid creating mis-understandings. The assurances were significantly more, and reasonable to accept they were part of government policy.
Well OM can you point to government policy? Discussing the possibility of a change in policy is not of itself actionable.
Have a quiet chat to Phil Goff. I am sure he will enlighten you as to how MFAT officials work. Failing that, I am sure Tim Groser will be happy to explain it to you.
Just like when they let the Malaysian go home, because MFAT would never make a staement to an over seas government without ministerial aproval on the off chance it may lead to confusion over the message.
There may well have been assurances from the previous Labour government. Labour clearly wasn’t that concerned about the so-called animal welfare issues, because (if I recall correctly) there were live sheep shipments during 1999-2003. Do you know if this is correct? But even if Labour did make promises, I fail to see what cause of action Hmood would have had against the Crown – especially by February 2013 when he was briefing Cabinet. Surely even if there was a cause of action, isn’t there a six year limitation period?
Also, I am pretty sure the delegation where Hmood spoke was in 2010 not 2011. This was after David Carter had announced through the media in August 2009 that there would be no resumption of the trade while he was agriculture minister, contradicting his public and private statements earlier that year. See http://www.stuff.co.nz/business/farming/2287062/Live-sheep-exports-to-resume
Don’t have time to check now but from memory there had been live sheep exports under Labour but animal welfare concerns caused a change in policy and they were banned. That’s why it seems odd to me that a Labour MP would have promised to reinstate them.
I repeat my question above… did you or anyone else explain to Hamood that in a democracy only so much stock can be put in assurance, due to change of government and sovereignty regarding policy implementation through legislation? And that governments/political parties are occassionally driven by public opinion leading to changed “minds”?
I believe David Carter’s political advisor made these points to the Saudi Agriculture Minister in a meeting at the FAO in Rome.
It seems odd that no one would have pointed this out to Mr Hamood, either amongst his own advisors or ours.
An official may have said that (if that is what the man claims) – but that official was clearly speaking out of line. It was not government policy, and could never have been, the government having banned the export of live sheep only 5 years previously!
bit of a warning here for the TPPA – sign it and get sued for non-existant claims by bullies, paid off by a bunch of chicken poop bureaucrats to curry favor. This is before a so-called agreement is signed – this was done to get it signed – maybe(?)
and they gave away IP which can be copied – blindly arrogant shortsighted fuckwittedness.
McCully is a disgrace who has achieved nothing of any merit in or outside of parliament.
Two questions for McCully today Question Time:
JAMES SHAW to the Minister of Foreign Affairs: Has a full and final settlement been reached with Mr Al Khalaf; if so, what is the total cost to taxpayers?
Hon DAVID PARKER to the Minister of Foreign Affairs: Did he seek advice from the Ministry of Foreign Affairs and Trade about whether, using the multimillion dollar payment for the benefit of Hamood Al Ali Al Khalaf – a Saudi Arabian businessman to cause the Saudi Arabian officials to advance the GCC FTA which had stalled, breached the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions?
The reply from McCully will be very interesting on the Parker question…..enough people know the answer to this one.
It’s got to be “no” I assume?
(Especially as no bribe was paid to Saudi officials.)
It makes me wonder what the follow up question is?
Parker should split this line of questioning:
Hon DAVID PARKER to the Minister of Foreign Affairs: Did he seek advice from the Ministry of Foreign Affairs and Trade about whether, using the multimillion dollar payment for the benefit of Hamood Al Ali Al Khalaf – a Saudi Arabian businessman to cause the Saudi Arabian officials to advance the GCC FTA ?
The answer to this is Yes
If so, did MFAT provide an opinion on the view that the payment would breach the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions? If yes, what was their advice ? If no, why was this not considered by MFAT ?
What are the real answers to this one?
I suspect/guess that Old mickey is telling us MFAT told McCully that it would or could breach the Convention but that would be OIA-ble wouldn’t it, unless the MFAT official was a lawyer and then can they claim they don’t have to release it?
The real answers – try this:
National inherited a very bad situation, and tried hard to create a better outcome for NZ in the long term. Given the delicate nature of the relationship & lack of trust due to an apparent backdown by the NZ govt, MFAT needed to be creative in order to create a win/win situation. To that end it is harsh to judge this now. If NZ does not get an FTA with the GCC, then this was a bad call. On the balance of probabilities this strategy was worth the effort and a rational response. Nothing to see here yet.
It’s only a bad situation if you are desperate to have a FTA with a corrupt government.
Yes Old Mickey that’s exactly what he should have done.
I have no idea why Labour MPs insist on cramming so much into their questions, and then at the same time waste questions by asking questions that other parties are already asking on the same day.
At least he didnt start with “does the minister stand by all his statements ?”
which seems to be the the question de jure of greens and Winnie First.
Always worth having one of those per session though. Got to give them a surprise now and then 😉
He didn’t answer “yes”.
He said “not specifically”.
Add also “was Crown Law consulted on whether would breach domestic legislation prohibiting corruption/bribery.”
The New Zealand legislation implementing our obligations under that OECD convention is s 105C Crimes Act. This does not require the bribe to be given to the foreign official for an offence to have been committed. All that is required is that the bribe be given to a person with intent to influence the foreign official.
does it define bribe?
Ooh that last question is a doozie (though hard to parse).
Given the growing public interest in this story, the NBR has put my two flying sheep columns on the free side of the paywall.
Reads as a credible record Matthew. Very interesting. The Question Time today will be even more interesting in the light of your record.
No doubt an error or two as had to rely on memory, and much more has now been revealed by others.
Has google earth updated, can you see buildings and sheep?
McCully might have to fly emirates… so he can take the sheep with him to the opening?
Cheers Matthew. I am going to do a Mike Williams and say I agree with you! McCully should be sacked for misleading Cabinet if not Parliament.
I was farming sheep (and beef) during those years.
I supported the ban on the live sheep trade to the gulf for animal welfare reasons.
Before, (and even after the ban was imposed because I feared the trade would be renewed one day) I docked and wethered all my surplus male lambs and put blackface rams over my ewes, because only entire white ram lambs were acceptable for the Muslim festivals. I was surprised to read yesterday that it was Suffolks (black face bred for cool climates) that were part of this latest breeding deal tbh; hadn’t realised things had changed so much.
Yes, it cost me a considerable premium but it was the right thing to do.
Does that mean that the reason for setting the “farm” up is not for the festival?
Ianmac, I don’t know.
They say it’s a breeding operation and obviously it must be or we wouldn’t be sending pb ewes across. But black face rams are mostly used to produce meat animals; the wool is not high quality and there’s a black fibre that contaminates it too.
So my guess is that this has been set up to produce meat for every day and someone else with another line of stock will be producing animals destined for the festivals or rituals.
Never the less, meat animals must be slaughtered and, if it is as it was, back in my day, many of them will be slaughtered by amateurs with poor skills and little concern for their suffering.
Government accused of wasting $11.5 million on wealthy Saudi farmer
Deeper and deeper he digs the hole he’s in.
and the more it shines away from Key and Carter…
like the scene in Steven Soderburgh’s ‘Traffic’ where there are 2 envelopes to be opened in times of crises:
the first letter is ‘blame the last guy’ and the second one is ‘sit down and write 2 letters’.
Mccully needs to wake up to the fact maybe his time is up and Shonky needs some meat for the pack to feed off whilst he goes about flogging Nzild to his mates.
Of course,putting my boots on and running on the ground gives me 40 thousand pounds every time a game,got to be some tax relief their above the hundreds of millions transfer fee of my feets ability
look we believe in Labours belief,we do,just give us a chance.Mike, the voters rejected it back then,and the new pin numbered poverty will be left looking for a social change for their care.
Never happen here.How much now this rag head greed extortion have you payed Murry,for your governments control of free trading,how much was that ease paid .Never happen here in our Aotearoa,these bribes,its how they operate over there give millions and receive more,its not corruption as our knowing,its like a modern version of Oprah,give and receive.Dont think Opera understood the religious abuse of caliphate power dominance. Seems our corporation control governance is not shy of backhanding.
On one news they have just revealed that the threat of legal action had been stopped in 2012 a year before this dodgy deal was done.
Another minister about to bite the dust??
David Parker’s legal skills ride to Labour’s rescue again. He will be difficult for it to replace, if not impossible. Still, it looks though he’s on the way out (straight, white male).
This sordid episode would topple governments elsewhere but not in good old demure NZ.
What depths does National have to plunge to make NZ’ers wake up?
Ban iPhones perhaps?
Interesting that the Exclusive Brethren Brownriggs were ‘selected’ to provide the ‘sheepware’. I wonder if Don Brash provided consultancy??
Did not Bill English describe Mcully as a toxic gnome/dwarf that needed dealing to? (reference Hollow Men).
No wonder he got MFAT. Out of the country, out of our hair. Some government did that to Winston (once). Heh.
Mind you john banks is back to save the nats.
It seems to me that there is agreement that these payments were made a) either to prevent legal action in relation to live sheep exports and/or b) to facilitate a free trade agreement. If b) – it is a bribe, if a) then there should have been a formal claim lodged, and somehow all process of mediation followed. Prima facie – it looks like a), if b) then a complete and utter failure of due process.
It seems Paul Robinson that the payments were made
B) to facilitate an FTA,
but it was dressed up and sold to cabinet as
A) to prevent legal action.
In common speak it was a bribe but to get around legal issues was dressed up as a neccessity to avoid legal recourse. I can see that Hooton and HDA now understand there was no legal threat, a point McCully has admitted himself.
The question is who was involved in the dressing up? I am pretty sure MFAT staff have enough nous not to go near this sort of thing – so who did the dirty work?
Probably not a good idea to use a name so similar to the name of a well-known New Zealander.