Atlas Monitor | 9 May 2016

Prime Minister of New Zealand John Key has refused to front up to his scheduled Monday morning interview with Radio NZ National’s Morning Report to answer questions about the latest “Panama Papers” document dump that mentions New Zealand more than 61,000 times fueling speculation that NZ is a “tax Haven”.

Clearly wanting to avoid the hard questions Key decided to keep his in studio appointment with obsequious sycophants friendlier media such as Newstalk ZB’s Mike Hosking who deliberately chose to spin the issue by focusing on the claimed negative impact to NZ  business that banning foreign trusts would have.

The revelations so far have included the details that Panamanian law firm Mossack Fonseca had been actively promoting NZ to its clients as a good place to park their money away from the tentacles of their local tax authorities.

This directly contradicts the statement from Key that NZ was a mere footnote in the Panama Papers and suggests that NZ is at the heart of a complex and shadowy web of companies and foreign trusts that exploit offshore tax regimes to protect and hide their wealth.

The Panama Papers story took an interesting twist when the alleged hacker who obtained the documents from the Panamanian law firm at the centre of the scandal singled out New Zealand Prime Minister John Key in an 1800 word statement published over the weekend entitled The revolution will be digitized. No other world leader was mentioned n this statement.

The hacker, referred to as John Doe, suggested that Key had been “curiously quiet” about New Zealand’s role in enabling the “financial fraud Mecca” of the Cook Islands. Doe’s exact words are:

Prime Minister John Key of New Zealand has been curiously quiet about his country’s role in enabling the financial fraud Mecca that is the Cook Islands.

Key has repeatedly argued that NZ is not a “tax haven” and has defended the existence of foreign trusts in NZ as having an entirely legitimate function, which is almost entirely likely for the most part. However, what investigative journalist Nicky Hager has found:

was the full range of things people do in the shadows. Arms traders. Billionaires quietly shifting their profits out of impoverished countries. Business people eager to win big contracts in countries with corrupt leaders. Hard core pornographers, hiding the identity of those raking in the profits. Pharmaceutical company money invisibly moved around to buy influence. And, more than anything, huge numbers of people who appeared to be cheating their tax departments.

This is not the first time Key has been forced to defend the use of trusts. Indeed he has been forced to address the details of his own “blind trust” in which his assets are managed to avoid the perception of any conflict of interest while he serves as PM of NZ.

Key has been known to parade his own personal wine label “JK” which, according to TV3 News, is produced by a Central Otago vineyard “Highwater Vineyard” in which apparently Key has a financial interest. Investors in Highwater Vineyard also have financial stakes in some fo the biggest supermarkets in NZ and would naturally have concerns over any potential liquor law reforms proposed by the government. This is where a potential conflict of interest could arise for Key.

[youtube https://www.youtube.com/watch?v=u18hk8lzMBU&w=640&h=360]

It would seem that Key’s “blind trust” may not be entirely blind if as the video above appears to suggest in Key’s exchange with an apparent wine critic at a social function. Key says:

I have a little bit of a pinot noir and chardonnay-producing vineyard here in Otago, and it’s been doing very well. It’s successful. It’s been exporting some wines, and it’s a lot of fun.

I don’t know whether I own any assets or not,” says Mr Key. “The only assets are in our blind trust. I don’t know what those assets are.

Key has a history with not being entirely straight about his pecuniary interests. This was evident when questioned about the shares he held in Tranz Rail while he was the opposition spokesman for transport pushing for the sale of the company. He changed his story multiple times about how many shares he actually held leading some to accuse him of misleading the public and Parliament over his share in Tranz Rail.

Key has come under increasing pressure lately when it was discovered that his personal lawyer Ken Whitney, who is known to have advised clients on setting up foreign trusts, had in 2014 sought assurances from Key and the Revenue Minister Todd McClay that no changes would be made to rules governing foreign trusts. At that time the IRD was considering reviewing these rules.

Key has suggested that Whitney’s email correspondence with McClay was sloppily written and that he misrepresented him and this has led to accusations against Key of cronyism.