The unfortunate case of the Overseas Investment Office handling of the purchase of a Taranaki Farm

Written By: - Date published: 8:15 am, May 4th, 2016 - 39 comments
Categories: david cunliffe, jobs, national, overseas investment, Politics, same old national - Tags: ,

They say in politics that a news story is good for the opposition/bad for the Government if it hits the media cycle two days in a row.  If it appears for a third or a fourth day then it is a crisis and urgent action is required.  The most extreme form of action is to throw a Minister or MP under a bus.  If it is a public servant then the Government still thinks it is manageable but only just.

The unfortunate tale of the Taranaki Farm bought by a Mossack Fonseca company on behalf of a couple of Argentinian businessmen is still hitting the headlines a week after the story broke.  First there was the fact that Mossack Fonseca was involved in the purchase of a farm.  Then there was the unfortunate detail that the beneficial owners had criminal convictions for polluting an Argentinian river with carcinogenic material.  Then questions were asked about how they could have possibly passed the good character test.  The decision was made by Minister Louise Upston so obviously someone somewhere stuffed up.

The report to the Minister about the purchase is full of words but remarkably empty of content.  A couple of things stand out.  The document suggests that $2 million is being invested although this may be for further development.  With a $4 million mortgage the amount of tax that will be paid is not high.  The economic benefit is said to be the creation of 1.5, repeat 1.5 jobs.

The report refers to the checks that had been made to ascertain if the purchasers were really people of good character.  It states “[w]e have also conducted relevant internet searches for relevant adverse information on those individuals and have found nothing relevant”.

It seems that this particular passage may not have been, how do you say, correct and makes you wonder at the quality of decision making by the OIO and also highlights repeated attempts to minimise what has happened here.

Originally the OIO said that it was satisfied with the process that it had taken in relation to the application.  Then it decided to review matters because of the release of the “new” information.  Then an independent inquiry was announced.  Finally late yesterday the OIO apologised to the Government and said that a “robust inquiry” would be conducted.  From media reports the OIO has acknowledged that it knew about the polluting conviction but did not include it in the advice to the Minister.  Clearly some hapless public servant is in the process of being thrown under the bus.

It is not going to get easy for National.  Not only will they have to explain how this misrepresentation was made but they will also have to explain how over 98% of all OIO applications are granted.  You really get the feeling that a lot of rubber stamping may be going on and you have to wonder if the quality of many of the reports accompanying these applications is being compromised by a doctrine that thought that money coming in from overseas was a good thing.

But the really unfortunate fact is that the Taranaki farm has a stream on it.  Someone of good character wanting to buy a property with a stream should not have convictions for dumping toxic material into the stream.

Louise Upston has said the mistake is a one off.  David Cunliffe has stated he has other examples of companies that should have failed the good character test being granted OIO approval.  This could get interesting …

 

39 comments on “The unfortunate case of the Overseas Investment Office handling of the purchase of a Taranaki Farm”

  1. Sabine 1

    Pass the popcorn.
    maybe invest in popcorn futures?

  2. Pat 2

    “This could get (even more) interesting …

  3. Te Reo Putake 3

    I may be wrong, but I think I heard on the radio that the official responsible for signing off the shonky brothers’ application no longer works for the OIO. Which is convenient for scapegoat/bus throwing purposes.

    • Sabine 3.1

      some curious journalist could track down that now unemployed official and ask some questions?

      yeah, nah nah not gonna happen ey?

      • Te Reo Putake 3.1.1

        I suspect they are still in the public service somewhere, Sabine. Either a genuine promotion or job change prior to this debacle coming out or a sideways shift to ensure damage limitation in recent days. Either way, if the person concerned is still on the payroll, they can effectively be kept from scrutiny.

        Mind you, it’s probably not down to an individual. It looks like the OIO was just a rubber stamp for investment and no real effort to weed out the unsuitable was ever made on any application.

        • Sabine 3.1.1.1

          I don’t blame the individuals as they usually don’t have the decision making power. They compile the data, present it, and are then told what to do with it and how to present it.

          the bucket stops with the minister, but then heck if it the lady on the picture, that department is shit outta luck, cause that tart is a Minister because she is useless, not despite it.
          And yes the OIO is a rubber stamp. Foreign investment is good for the corrupt entity that is this current National Party and National Party led government.

        • Tiger Mountain 3.1.1.2

          have followed the activities of the OIO for years via CAFCA (Campaign Against Foreign Control of Aotearoa) and it has long been apparent that there is only one type of rubber stamp in the OIO office cupboard, it reads “Approved Immediately old chap” and is next to a stack of legal business cards issued to successful applicants so they can contact the NZ Trust Industry

          crony capitalism as practiced by this Nat govt. is becoming hard to ignore, even to those that perform extraordinary exercises in semantics and subterranean levels of denial

          bring on 9 May when the International Consortium of Investigative Journalists
          https://www.icij.org is due to release a searchable data base of 200,000 ”offshore entities”

          • Chooky 3.1.1.2.1

            +100..this jonkey nact government is corrupt in so many ways

          • Draco T Bastard 3.1.1.2.2

            crony capitalism as practiced by this Nat govt. is becoming hard to ignore, even to those that perform extraordinary exercises in semantics and subterranean levels of denial

            Although probably true I’m sure that you’ll find that the OIO was operating just as badly under the previous Labour led government.

            The real problem is the ideology that says we should sell everything as fast as we can and that ideology seems to be common to, Labour, National and the OIO.

        • To true, just like all the CEO,s in the State Service.

          They just go around and around.
          Same old faces with little ability.

          • Draco T Bastard 3.1.1.3.1

            They’ll have about the same ability as anyone else. A large part of the problem is that we expect them to be better and that they come to believe that they’re better. The inevitable result of this is pure disaster.

    • Sabine 3.2

      some curious journalist could track down that now unemployed official and ask some questions?

      yeah, nah nah not gonna happen ey?

  4. Adrian 4

    So do we take it that the extent of the OIO’s checking up on the applicant’s good character is simply to Google them?

    • Sabine 4.1

      why yes, that sure beats having to bring a police certificate from each country in which you may have resided for six month and over, at your own cost of course.

    • Lanthanide 4.2

      I was wondering that too; Micky implies that is the case by quoting only that part of the document. I expect (hope?) that is just one small part of their background checks.

  5. Murray Simmonds 5

    Well, the purchasers apparently lied about not having an overseas conviction.

    They therefore now fail the “good Character” test, so the required government/OIO action is obvious: Simply take the farm back off them . . . .

    Oh, I forgot . . . . this government is led by a compulsive liar.

    • dv 5.1

      Wouldn’t/shouldn’t the OIO check back with the country of origin for convictions.

      • AmaKiwi 5.1.1

        dv – Absolutely.

        Despite overwhelming public disapproval, this Big Brother fascist government took unto themselves the power to spy on every aspect of your life and mine.

        But when they don’t want to uncover any bad news about rich foreign investors buying up our farms, they use an internet search to vet them instead of asking the proper police authorities about their criminal convictions.

        Hypocrisy to perfection!

    • Sabine 5.2

      well, if the purchasers were only regular immigrants into NZ their residence permit by now would be revoked and they would be on a plane to where ever they came from?
      Oh hang on, they only poisoned a river, all good then, the only people that we kick out are the ones that may have had a conviction for possesion and use of weed.
      Poisoning a river is such a corporate white collar crime. Nothing much to see here.

      • AmaKiwi 5.2.1

        “if the purchasers were only regular immigrants into NZ their residence permit by now would be revoked”

        But exceptions will be made for those making donations to a certain political party.

      • Lloyd 5.2.2

        Anyway no-one owns water so they didn’t really damage anything…..

    • Jack Ramaka 5.3

      Fraud in my book?

  6. One Anonymous Bloke 6

    Keep it up. Drip feed the OIO farce until the Mossack Fonseca database comes online on the 9th, and then with any luck the fun really starts.

    Who cares who the officials involved were – the Minister carries the can, or would if right wingers exhibited any shred of personal responsibility.

  7. wyndham 7

    Some interesting facts here vis-a-vis the OIO:

    http://canterbury.cyberplace.org.nz/community/CAFCA/key-facts.html

    • Observer (Tokoroa) 7.1

      To: Wyndham

      , The data presented by CAFCA is shocking. No wonder Louise just rubber stamped all foreign requests. She was on the mission of Key and English to flog our country off. Massive amount of New Zealand wealth has been passed onto Foreigners.

      How could Louise regard herself as A New Zealander, She is a cheap shallow dangerous underminer of NZ.

    • Draco T Bastard 7.2

      Keeping up with the research that CAFCA does is pretty much mandatory. They’re the only ones who show just how bad foreign ‘investment’ is.

  8. TC 8

    C’mon folks this is the brighter future making our waterways glow, just take a nose peg.

  9. roy cartland 9

    Trust good old Cunnles to come up with the goods. Why oh why did we not vote him in again? Because some reports said some MPs “didn’t like” him?
    God we’re pathetic, what an opportunity missed!

    • Bob 9.1

      “Trust good old Cunnles to come up with the goods”
      At this point all he has done is take a leaf out of the Winston Peters “I have proof, but you will have to find it yourself” playbook.
      Clever politics, but it certainly doesn’t mean he has “come up with the goods”.

      “Why oh why did we not vote him in again?” Because if you do like this style of politics you are better off voting for the guy that does it better than anyone, Uncle Winny.

  10. Draco T Bastard 10

    The report refers to the checks that had been made to ascertain if the purchasers were really people of good character. It states “[w]e have also conducted relevant internet searches for relevant adverse information on those individuals and have found nothing relevant”.

    It seems that this particular passage may not have been, how do you say, correct and makes you wonder at the quality of decision making by the OIO and also highlights repeated attempts to minimise what has happened here.

    I would expect the OIO to get in touch with the authorities of the country that the offshore owner comes from and not just google them. Hell, I just googled the Auckland mayoral candidates and for a few of them I got so many different results there’s no way I could determine which person of that name was running for mayor.

    You really get the feeling that a lot of rubber stamping may be going on and you have to wonder if the quality of many of the reports accompanying these applications is being compromised by a doctrine that thought that money coming in from overseas was a good thing.

    I’d say that that was pretty much guaranteed.

    David Cunliffe has stated he has other examples of companies that should have failed the good character test being granted OIO approval.

    I truly hope so as it will increase pressure to ban offshore ownership. Not that NZers ever wanted to allow offshore ownership – that was only ever the politicians.

  11. save NZ 11

    Is that stream wadeable?

    The governments new standard for pollution.

  12. Henry Filth 12

    Australia seems to take a somewhat tougher line on these sorts of things. . .

    http://m.dw.com/en/australia-thwarts-sale-of-its-largest-cattle-farm-to-china/a-19224022

    Interesting to see the coverage of it in the German press, too.

    • dv 12.1

      AND the have introduce a 40% tax on profit shifted out of aussie by google apple etc

      • Henry Filth 12.1.1

        It’s a shame to see that they’re continuing the idiocy of taxing profit, but you can’t win them all, I suppose.

  13. b waghorn 13

    There’s another 2% to Winston right there.

  14. Grace 2 14

    “Do I look like a rubber stamp?”
    For Louise Upston – this question works like a charm on bureaucrats, please learn it for use when asked to sign off OIO approvals in future.

  15. If we aren’t talking about the government or state run services, than any publicity is good publicity though isn’t it? I would love for my car finance company to get a bit of mention in the newspapers for helping people, but you can never control what the media will say about you. And of course you don’t want people to think that you’ve got bad or unhygienic service standards though!

  16. Jack Ramaka 16

    Nothing has changed in NZ since the old Maori Land Court days, all those records went up in smoke, I wonder why that was? Same shit different day?

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