That meeting

Written By: - Date published: 9:46 am, September 27th, 2008 - 49 comments
Categories: john key - Tags:

The more I think about it the more it seems to me that John Key’s meeting with Rail America needs some more explaining.

For a start these kinds of meetings don’t just happen of their own accord. Rail America is based, somewhat unsurprisingly, in America. John Key is based in New Zealand. That means someone had to take a 20 hour flight for this meeting to take place.

Then there’s the fact that someone had to think it was a good idea for Key to meet with company reps. The question is who was that person? I assume David Richwhite would have been dealing with Rail America at that time and he has been a big (and controversial) donor to the National Party (and my sources tell me Key is personally acquainted with him) so maybe it was him.

If he was the go-between then the situation gets murkier as insider trading proceedings were filed against David Richwhite in an action that included investigation into “a bid by Rail America for Tranz Rail (in the event not proceeded with)”. What the exact charge around the Rail America sale was we don’t know because that action was stopped when $20 million was payed out by Richwhite but no liability was accepted.

Of course this is only surmise but according to the Labour party Key was at the meeting in his capacity as a representative of New Zealand’s parliament.

If Key did meet with the company in his capacity as our representative then the public has a right to know all of the details surrounding this meeting and pertinent questions would be where did he meet Rail America and, if it was in the US, who picked up the tab for the flights and accommodation?

There may be simple answers to the questions of who set the meeting up, where it was, what was discussed and who, exactly, it was with but unfortunately I don’t think we’ll ever hear them.

49 comments on “That meeting”

  1. Razorlight 1

    John Key has admitted his mistake apologised for it and attempted to get back to debating the future.

    I am genuinley curious as to why this story keeps coming up IB. Can any more damage be done to Mr Key through repeating accusations.

  2. IrishBill 2

    “I am genuinley curious as to why this story keeps coming up IB. Can any more damage be done to Mr Key through repeating accusations.”

    The story keeps coming up because something about it doesn’t seem right to me. It’s got my nose going and I would really like some answers about Key’s meeting with Rail America. As I’ve said these sorts of meeting don’t just happen spontaneously and there are a lot of issues around that failed sale that have not be resolved (and not just to do with Key).

    At the time the insider trading settlement was made I had hoped (in vain as it turned out) that there would be better investigation of it in the media as I have been party to a lot of very interesting but unconfirmed information about Tranzrail over years and would like to see the record set straight.

    I also think Key’s admission was extremely limited and designed to inoculate the story as fast as possible. In my experience this kind of technique is used to close down a story before more digging is done. That makes me curious.

  3. randal 3

    this story keeps coming up because it is about the probity of the man who would be king. lucky for us he wont be.

  4. John Dalley 4

    A Complaint to the appropriate authority about possible insider trading would make for an interesting election right about know.
    Maybe Rodney Hide will lay a complaint, him being the champion of the truth and all that!!
    I do think further investigation should be done, as this has all the hall marks of being very under hand.

  5. Razorlight 5

    Do you really think Key is that shady IB. Do you honestly believe he invited the Americans over here or attended a meeting to gain inside information for his financial gain.

    What is it that you are so suspicous of?

    I know you do not like his politics but do you honestly believe he is as dodgy as you are infering.

  6. burt 6

    IrishBill

    Have you lodged a complaint with the Police? How about referring this to the privileges committee.

    Actually don’t bother with the privileges committee because it use to be called the highest court in the land but now that it’s found against a Labour-led govt MP it’s just another parliamentary committee. We were told that misleading parliament was a criminal offense but now that a Labour-led MP has been found doing that we find out it’s just a slap on the wrist with a wet bus ticket.

    But then again, while the Labour-led govt are still in charge you might find that if the privileges committee finds against John Key that it’s suddenly the highest court in the land again.

    So perhaps it’s worth giving it a go.

    captcha: Cairo negative – Oh yeah! – The standard has the best captcha on the www!

  7. IrishBill 7

    Razorlight, yes I do think he is shady or at the very least there is not enough known about him and his dealings and his motivations for me to feel comfortable about the idea of him leading the nation.

    There is less public information available about him than any other candidate for PM I can remember and the herald’s hagiography didn’t help.

    I’m starting to get the feeling the Rail America meeting was less about personal gain and more a favour for a mate but I know something doesn’t add up.

  8. Razorlicht,

    Because as IB shows questions remain and new connections keep popping up begging for answers.
    John Key, who was managing the department dealing in bonds and derivatives products for Merrill Lynch (recently absorbed by bank of America because of their toxic dealings) now threatening the global financial system and banked from Wall street too, is a secretive little squirrel and he wants to rule this country.

    I want to know everything there is to know about the Smiling Assassin.
    It seems IB wants it too.

    In fact I think we should be doing a whole lot more digging especially in light of his connection to Wall street, something else he doesn’t talk much about, and the coming financial tsunami.

    And believe me the subprime was only just the beginning.

  9. I also think Key’s admission was extremely limited and designed to inoculate the story as fast as possible. In my experience this kind of technique is used to close down a story before more digging is done. That makes me curious.

    Careful IB, you’ll get trolled as a conspiracy theorist if you say things like that. LOL.

    But yeah, I felt the same.

  10. Bill 10

    “The Commission’s inquiry focused on SALES of shares in the first half of 2002, before the share price of the company began to deteriorate from about the middle of 2002.”

    And John BOUGHT his shares in Feb 2002.

    When was the meeting? May/June 2003?

    Looks to me like John got burned in early 2002. Which is a good thing, ’cause I don’t like the guy, but a bad thing for the dots you seem to be trying to join IB…or have I missed something?

    Sure, his buying and selling of the 50 000 shares might have been predicated on ‘privileged’ info or some-such, but that was in May/June 2003. And as a consequence of the May/June 2003 meeting he might have been able to have the shares talked up to recoup some of his inevitable losses.

    And that’s dodgy in my opinion, but it doesn’t have anything to do with the Securities Commission investigation which was focussed on share sales in early 2002

  11. Razorlight 11

    Well boys you better get digging quick and get your findings to the relevent authorities quick because he will probably be PM in 6 weeks time unless you save us from this tyrant.

    Making the accusations on aguably the most partisan of all blogs isn’t really going to get you anywhere.

    But don’t you think there is an army of activists out there digging as well. How many people are looking for that King punch on Mr Key. There are dozens of blogs to begin with. Notwithstanding this huge effort noone has found the dirt that sticks.

    Maybe, just maybe that dirt doesn’t exist.

    I suppose the next 6 weeks will tell us.

  12. Bill 12

    Maybe somebody could look see whether Richwhite et al sold shares soon after the May/ June 2003 meeting? That would suggest a bit of shenanigans on Key’s part.

  13. ghostwhowalks 13

    Notice that in todays Herald about Key seeting up a blind trust – which was the misleading impression he was giving that this was the current arrangement.

    http://www.nzherald.co.nz/politics/news/article.cfm?c_id=280&objectid=10534474

    It also says that his ‘unwritten’ aggreemnt with his broker at UBS to trade without refering back to him ( while not saying whether the TR buying and selling actually happened that way) broke the stock exchange rules at the time.

    So another breach of the rules, but this time by the UBS broker Richard Leggat. Whats the bet unlike Owen Glen he wont be dragged into the spotlight to account for his discrepancies

  14. A 20 hour flight to the USA?

    Did he fly on a DC10?

    IrishBill: Rail America HQ is in Florida. That’s a 20 hour flight from Auckland (minimum).

  15. IrishBill 15

    Bill, he also bought on the 16th of April 2003. This is the date the securities commission state shares reached their lowest point ever. On May 20 he had his meeting with Rail America. On June 9 he sold that parcel of shares for more than double what he paid.

    However, at the time of the meeting (the time they were bidding for Tranzrail: the $0.75 offer was announced on the 15th of May) something was happening/had happened with Rail America and Richwhite that was later of sufficient interest to the Securities Commission that it formed part of their later investigations. This may not be connected but, taking into account the relationship between Richwhite and Key, we can’t rule a connection out until we find out about Key’s meeting.

  16. randal 16

    there wasnt much left of nz rail after fay richwhite sold all the surplus track to japan when they got their hands on it but there was enough to make it worth somebodies while to ramp the price up and down for short term speculative gain.

  17. Razorlight,

    Watch the collapse of the US banking world if they don’t get bailed out. It’s going to be spectacular and unstoppable. Why is it collapsing? because for the last twenty years they have been playing around with dodgy securities scams and remember that during his tenure with Merrill Lynch John Key sold this crap al over the planet running the department of debt (and no, that is not the department of debt collection) according to the puff piece in the NZH he told them, “I was running this department with a hundred and 140 guys developing all this new financial products.”

    Guess what? Merrill Lynch collapsed because they were stocked up with these dodgy new products.

    Derivatives were banned after the great depression but Alan Greenspan under Reagan dusted them off and gave them new live and presto a new great depression. If that isn’t shady I don’t know what is.

    John key’s previous bank also collapsed because of shady derivatives schemes going wrong. So I guess John Key knew al about them but went on trading them, i guess he didn’t give a toss about the damage they would cause just so long as he could walk a way with bundle.

    Really the man we want to govern this country in the tough times ahead. LOL

  18. Felix 18

    One aspect missing from this story is that while Key’s own trading may have been pretty insignificant (by his standards), who else was he sharing his inside info with?

    Who else might have been trading based on his advice?

  19. RedLogix 19

    All right wingers who have spent the last few decades lecturing us about how wonderful ‘free-market’ capitalism is should, in the light of the current meltdown in the global markets, crawl under a rock and never been seen or heard in public again.

    The free market capitalists have lied to and stolen from on us on a vast, monstrous and venal scale; while right wing agitprop agents still repeat utterly discredited non-events like “Speedergate” and “Paintergate” to support their totally insane fantasies that Helen Clark is some sort of lying tyrannical despot.

    Understand that these super-rich capitalists are only interested in one thing; increasing their own wealth and power. Nothing, literally nothing else is a consideration in their absolutely amoral universe. For decades they have been feeding us lies that notions like the ‘social wage’ or ‘social contract’ were morally amd economically wrong. All this carefully crafted propaganda was merely a code to justify their real agenda. Their real ideal and purpose is to create a world is populated by a superrich class free to enjoy unlimited privilege and a vast impoverished working class constrained to live hand to mouth in debt all their lives.

    The capitalists had but one dream, to slash costs and wages. This is why they have so rapidly moved their production from the West to countries like China. They have shown not the slightest scruple or compunction about this; the transition has occurred at breakneck speed with absolutely no concern for the millions of jobs and middle class lives they have destroyed in the West.

    The only remaining barrier to implementing this dream has been the representative democractic governments of the West, most particularly the USA, politically tied to the interests of their very numerous middle classes. And of course the very best way to dismantle a government is to bankrupt it. (The Russian and Argentinian experiences are pertinent examples.) And they are doing this right now with a monstrous mugging to the tune of many trillions of dollars.

    Open your eyes. The affairs of humanity are being devoured as a pack of greed crazed wolves feeding on a carcass. Much of the time they have stalked us in suits and called themselves by respectable names; but no longer can they hide or resist their money lust, their fangs are out devouring whatever lies in their path.

  20. Doug 20

    Felix

    My be John offerd Cullen advice, and Cullen bought all the Shares in the Raillway.
    This will hurt all of the Population now.

  21. Felix 21

    Heh – that’s funny Doug.

  22. randal 22

    maybe he has sold new zealand forward to the highest buidder?

  23. Chris 23

    From a mefi thread with the header ‘Oh sh*t.’ about Palins foreign policy interview with Couric.

    i begin to wonder if the republicans even WANT to win this election. i mean, they got their money, right? they got control of the oil. they’ve pretty much guaranteed that universal health care and social security reform (remember that?) are pretty much non-starters at this point. all the corporations are as big and vertically integrated and unregulated as possible. education is in the toilet. habeus corpus has been repealed. all the jobs are overseas. bible-thumping, homophobic christian fundamentalism is rampant. 1984 has come true (thanks AT&T!). they’ve established a homeland gestapo. they’ve killed an absolute shitload of brown people, both here and abroad. and they’ve pretty much guaranteed that the dems are gonna smell like shit for the next 4 years as all this sinks in. i just can’t see anything more they could want.

    http://www.metafilter.com/75174/Oh-sht#2274257

  24. Draco T Bastard 24

    Travelerev:

    Watch the collapse of the US banking world if they don’t get bailed out.

    Watch as the US economy grinds to a halt if they do: Cure worse than the Crisis. I’ll throw in this one as well from the same author: The Insanity of the $700 Billion Giveaway

    Back OT
    I would love to see some of these questions answered about JKs actions surrounding the meeting with Rail America. There’s just too much that we don’t know and we need to.

  25. rave 25

    Is the missing link to the Labour Party statement this one.

    I see that Key got compensation for his first 30,000 shares from the insider trading settlement. Can you explain that?

  26. Monty 26

    I know this is your blog and you are obsesed with John Key, but surely it is time to starting dropping hints about the next “explosive scoop”. I know you guys are bitterly disappointed that the a dwarf has more legs that the John Key Tarnsrail shares, but it is now yesterdays fish and chip paper.

    I suggest that you get all your ducks lined up for the diversion and interference you will need when the Fical Updates (Thank you Ruth Richardson) are releases in a few days –

    Cullen no doubt would love to hide and lie about the true state of the economy – but thanks to Ruth’s foresight that will not happen again as Labour did in 1990.

    National will have a hard time re-building the economy after nine years of wasted opportunities due to mis =-management – Cullen is now out of his depth, and the countrya re realising it. Key will be the saviour, and the country do not give a toss about shares he may have owned as a junior MP nearly six ago – and what meetings he may or may not have attended in 2002. This is not a story – no matter how desperate you are to make it one. Sort of reminds me about the time some six months back when authors of this blog went on about a mis-quote on wages. The problem is that this blog is like a closed sound proof room with a whole bunch of lefties (and a few righties) all shouting at each other – outside this blog no one cares what you think.

  27. IrishBill 27

    Monty, it is extremely dull to have you repeatedly turn up and provide a thesis of several hundred words on why nobody should pay any attention to what we say. Have you considered starting your own blog to get this all off your chest?

  28. RedLogix 28

    Monty,

    In what mad universe did you get the idea that JK will be ‘the saviour of New Zealand’.

    The ONLY policy of any economic significance that he has consistently talked up has been massively increasing govt borrowing to pay for tax cuts that will primarily benefit the top 10% or so of taxpayers.

    Open your eyes Monty. In the last few weeks we have seen massive banks and institutions, far larger and more influential than NZ, crumble under the weight of debts that could not be repaid. Exactly the same kind of worthless debt that Key proposes to foist on future generations of NZ taxpayer, to fund tax cuts for his mates and backers today.

    With the same results.

  29. Felix 29

    IB, the link posted by rave above has an unwanted “http//.com” in it.

  30. Draco t Bastard,

    Yeah, wrong choice of words.
    The banks are going down no matter what they get.
    That money should go to new jobs for the American workers. Like rebuilding the infrastructure rebuilding local communities etc.

    Monty,

    Hilarious, John Key our saviour. It’s him and his Wall street buddies that got us in the recession in the first place with their irresponsible greedy speculation with worthless paper.

  31. Ianmac 31

    Actually it would still be a pretty bad call for John Key after the election ,if they won, and further strange dealings came to light. Become the first PM to face………..
    Funny the way righties always refer to enquiries as “digging the dirt”. What Winston says is pretty insignificant compared to the credibility/honesty of a would-be PM But it does seem that there is more to come. When John Key was asked on TV “was there anything else to hide?” and he hesitated, eye flicker “Umm. No. No. Not at all.”
    Don’t want to sidetrack discussion but there was a great deal of criticism for the stand Helen/Michael took against Glenn. Does it not show that a huge benefactor can’t buy patronage of duly elected MP’s? Isn’t this an example of integrity on HC part. You give us money thankyou but it you don’t get special treatment. As it should be. Now how do Fay/Ritchwhite fit in to National as big donors?

  32. RedLogic,

    The subprime was only just the beginning.

    It is all the hedging and betting and reselling of the mortgages in mixed batches on top of it that is going to be the final undoing of the financial system. It truly is a criminal fraudulent heap of speculation and now they want the bankrupt people of America to bail them out out of a mess they created themselves.

  33. Draco T Bastard 33

    Monty

    National will have a hard time re-building the economy after nine years of wasted opportunities due to mis =-management

    What is happening to the economy of the US is because of the same type of policies that National want to bring in. If National gets in to power then we will have financial mismanagement to rival that of Muldoon.

  34. randal 34

    they seem to have some misguided idea in the national party that somehow they can lower wages for working people and create a third world peasantry with themselves as overlords and a residual of say five million spare peasants to live in anthills that they can tut tut over and do deals with for piece work in electronic components. all in all its friggin wierd and not based in any sort of economic reality that can be seen anywehere else in the world.

  35. r0b 35

    National will have a hard time re-building the economy after nine years of wasted opportunities due to mis =-management – Cullen is now out of his depth, and the countrya re realising it.

    Monty knows this is all lies, but he loves to keep repeating it (time after time after time).

    Labour haven’t wasted any opportunities. As is well documented on The Standard, the economy under Labour has grown faster under National, and faster over the last 9 years than other relevant countries. Of course you won’t want to believe this blog, so go read Treasury here and here.

    Because Labour have been prudent managers of the economy NZ is well placed to weather the current international financial crisis. See for example this Treasury summary:

    Economy well placed to meet challenges in 2008
    The New Zealand economy is well placed to meet challenges in 2008 but uncertainty and market volatility is likely to persist in the short term. In addition, the current high inflation environment further complicates the outlook for 2008. However, the sound fiscal position; the prospect of tax cuts; and the ability of the Reserve Bank to move quickly on interest rates, if growth and inflation drop more quickly than expected, mean that the New Zealand economy is well placed to meet potential challenges over the next year.

    Or how about Reserve Bank Governor Allan Bollard in January this year:

    New Zealand had responded positively to significant global shocks in the past few years, and there was no sign of those shocks abating, Dr Bollard said.

    “We have enjoyed a decade of growth, the longest period of economic growth since the post-World War 2 era. Inflation has been low, averaging 2.2 per cent since 1998. …

    “We have been able to absorb recent shocks reasonably well because of the improvements in our economic institutions and policymaking frameworks, avoiding the boom-bust cycles of the 1970s.”

    Though it is very early days even new policies like KiwiSaver are starting to show their potential in this respect:

    According to funds industry performance analyst FundSource, net outflows for the quarter of $48.6 million would have been much uglier without KiwiSaver inflows of $353 million. … Mr Atkins said the high voluntary uptake suggested a big proportion of the funds would be invested in growth assets. “This will provide a boost to the financial services industry, with greater funds under management also potentially boosting local equity markets.”

    Labour led governments have been good managers of the economy (thanks Dr Cullen!).

  36. r0b – Communists! All of them!

  37. r0b 37

    Communists! All of them!

    Do you think they could get Chuck Norris to play Monty when they make the movie ‘Sod?

  38. He’ll have to put on quite a bit of weight…

  39. r0b 39

    (A word in the original version of this triggered moderation, I bet I can guess which one)

    Chuck is a professional – he’d do it for the role of a lifetime. A chance to lead the charge up the steps of the Beehive to clear out the Communists? It just doesn’t get any better than that!

    Tally ho, off to check on some billboards.

  40. Tamaki resident 40

    ghostwhowalks highlights some good points about Key’s Trust from the NZ Herald this morning.

    Also, why is it taking so long for Key to set up a blind trust? He has been trying to mislead the general public by saying that it was his trust that was trading in the shares, when in reality he was in the driving seat.

    Why will he not buy NZ shares in this blind trust? Surely there can be as much conflict-of-interest from overseas companies, especially if foreign insurance companies start taking over ACC responsibilities.

  41. rave 41

    Key keeps lying when will it end?
    http://www.scoop.co.nz/stories/PA0809/S00493.htm

    If Key gets reimbursed out of the settlement made by Richwhite for his 30,000 shares bought in early 2002, does that mean that he was unaware of Richwhites selling on inside information? This suggests that Key and Richwhite were not in touch on this matter. Or am I missing something?

  42. Andy 42

    Tamaki Resident – Great point on blind trusts, especially when compared to Clark who set up a blind trust years ago and made sure there was no possibility of a conflict. Key should have known better, and who the hell is giving out advice to National party members, surely they should be told how to deal with conflicts when they enter the house. Massive fail for Key and National.

  43. T-rex 43

    What I don’t understand is that if National had picked a genuinely good candidate they could have wiped the floor in this election. As it is, even if they win I think it’s going to be close.

    Key is just not that good. He’s lousy in public, comes across as a weasel (once he’s forced to talk, rather than just smile), his background is dodgy as hell (once you get past “self made man from state house”), he’s clearly almost totally amoral, he can only think on his feet in a very narrow and limited frame… why would you pick him? I mean there ARE really smart right leaning people out there. I know some of them, and respect them a lot despite the ideological clash. Why not pick one of them? Clearly “background in politics” is not a prerequisite.

    When you think about it “bagman” is actually the only thing that makes sense! Righties – do you really want Key siphoning our wealth off to Aussie through PPP’s and insider trading? They’re YOUR assets too!

    For f*cks sake, get over your passionate dislike of Helen and think about what you’re going to vote in.

  44. Hey guys and gals I took a quick look through all comments here.. and yes, it’s bit late in the day, but I’d like to know if Tranz Rail stock(aka shares, securities) is the sole financial instrument involved.

    Like could there also be options in the mix.. In which case how many.. and when were they bought.. and exercised (if at all).

    The reason for asking is simply that if call options were lined up they a drop in price of the underlying asset(shares) makes for a ‘cheap’ optin conversion and profitable sale. Yeah, the share is always higher priced than an option to acquire it..

    Hope that makes sense.. and IS RELEVANT..

  45. Tamaki resident 45

    But T-rex, they have not got a “genuinely good candidate” – what are their options? All the experienced MP’s have got huge amounts of baggage so they are left with a contender who seems to forget that he is now open to a lot more scrutiny than when he was running the toxic product division of a large bank.

  46. T-rex 46

    They’ve illustrated in their selection of Key that they don’t NEED an experienced MP though. They just need someone. If you’re going to open up the field to all comers – why not go after someone GENUINELY good?

    Answer? Money.

  47. Tamaki resident 47

    yep – follow the money!

  48. Pascal's bookie 48

    “Genuinely good” candidates;

    have ideas of their own, (or at least ideas of others that they genuinely believe in), get in to politics in order to implement those ideas, and have the ability to persuade others that those ideas have merit.

    or

    “Genuinely good” candidates;

    are crafted images able to inspire trust, without committing to any given course of action.

    Horses for courses.

  49. Oops.. small correction required.. previous comment read:—
    “The reason for asking is simply that if call options were lined up they a drop in price of the underlying asset(shares) makes for a ‘cheap’ option conversion and profitable sale.”

    Should have been PUT option.

    I was on two screens at the same time and.. blahhed!

    Maybe here I can add how in the unregulated financial markets private means a whole lot more than regulated public – as in equity and/or share markets. Guys in these private markets can and do set up, operate and profit & loss bet special products like put and call options. Puts and calls for example offset each other, which means in effect that users/operators can score an entirely different (parallel) line of business.

    A concern would be any politician doing this stuff at the same time as his/her public duties.

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