All the financier's men
Threatened by litigation, his business in tatters, former Hanover Finance boss Mark Hotchin appeared to back a public relations campaign aiming to discredit criminal investigations into his company and attack personal enemies, documents suggest.
The picture is painted by a cache of emails and documents hacked from Whaleoil blogger Cameron Slater and released to Fairfax Media.
Hanover and its sister, United Finance, owned by Hotchin and business partner Eric Watson, collapsed in July 2008 owing $553 million to 17,630 investors.
Little of that money has been recovered and outrage over the losses led to Hanover's affairs being investigated by the Serious Fraud Office and the Financial Markets Authority.
No charges were laid by the SFO. In 2012 the FMA sued Hanover's directors and promoters, including Hotchin and Watson, alleging they made false statements to investors. The case is due in court next year.
The documents, provided by vigilante hacker Rawshark, detail commercial links between Slater and his long-time friend and tobacco lobbyist Carrick Graham.
The documents appear to show Graham's work for Hotchin - for whom he acted as spokesman between 2011 and 2012 - involved payments to Slater and Cathy Odgers, a Hong Kong-based lawyer and blogger under the pen name Cactus Kate, to run attacks on the Hanover boss's behalf.
The campaign included attacks on the credibility of the Financial Markets Authority and the Serious Fraud Office, as well as attacks on Hanover critic and then-Shareholder's Association head Bruce Sheppard. At the time of the campaign, Sheppard was a defendant in a now-settled defamation suit brought by Hotchin.
Odgers, who this week resigned as director of the Jeeves Group, summed up the strategy in an email to Slater and Graham: "Remind him [Hotchin] he pays Cam n I to f*** with FMA so he can focus on important things."
Graham, Slater and Odgers declined to answer questions.
A series of detailed questions sent to Hotchin also went unanswered.
A spokeswoman for Hanover co-owner Eric Watson said he had not paid Graham, Slater or Odgers for any services. The spokeswoman said Slater's plan, sketched out in an email, to meet Watson to discuss "social media destruction" had not resulted in any meeting taking place.
How much the trio were paid for their role in the campaign is not made clear in the documents, but in a 2012 email to Taxpayers Union head Jordan Williams discussing how much he charged for his services, Slater implied the sums involved would be substantial.
"If say Mark Hotchin was to approach me for work I would charge absolutely heaps because a) he has heaps of coin, b) he has a reputation worse than a tobacco company and c) because he can," Slater wrote. He has previously denied accusations of cash-for-comment by saying all his published articles are honestly-held beliefs. But a review of Whaleoil posts mentioning Hotchin finds a marked change in opinion about the Hanover boss.
In a 2008 post Slater described Hotchin as a "crook", the same word used by Sheppard that Hotchin alleged was defamatory.
There is further evidence, for Slater at least, that work for Hotchin was purely mercenary. In August 2011 Odgers emailed Graham asking him to follow up a lack of payment: "Still no hooter from Hotchy," she wrote.
In reply Slater said: "Fast getting bored with this shit, bad things happen when I'm bored."
The broad strategy adopted by the trio was outlined by Graham in an email to Hotchin and former Hanover chief executive Kerry Finnigan in December 2011.
Graham said his plan was to use blog posts by Slater and Odgers to accuse the FMA of conducting a campaign of leaks against Hanover figures and being driven by a personal vendetta; to attempt to refocus public debate on Hanover borrowers rather than directors; and to portray the SFO as being a "shambles".
A review of blog posts by Slater and Odgers shows many of the lines laid out by Graham in this email were pursued in the following months.
The Serious Fraud Office and Financial Markets Authority, both of whom closed their criminal investigations without laying charges, were unwilling to answer questions this week. The FMA said it was unable to comment because its civil suit brought against Hanover was before the courts, and the SFO added social media played no part in its decisions to investigate or prosecute.
Sean Hughes, the then-chief executive of the Financial Markets Authority, was the subject of a post by Odgers in 2012 in which she claimed his decision not to lay criminal charges showed he had a small penis.
Odgers joked in an email, discussing the draft of this post with Slater and Graham, that: "I've gone down the ‘small cock' route here. As a chick I can do that."
Hughes told Fairfax Media attacks on law-enforcement bodies risked threatening public confidence in the justice system and public institutions, and were also ill-considered.
"I would have thought that if you were under investigation, facing serious legal issues, you would be better served spending your money on good lawyers rather than some PR attack merchant to use schoolyard insults," Hughes said.
Adam Feeley, the then-director of the Serious Fraud Office who was repeatedly called "Five Fingers Feeley" by Slater, said he was aware at the time of a campaign being run against him but was unsure of its motivation.
"I knew that what they were saying, most of it was at best totally wrong. But I guess you kinda thought ‘that's the reality of being in these kind of roles', so I stopped reading it."
Sheppard, a vociferous critic of Hanover, was similarly unsurprised to be told he was the subject of a smear campaign.
"I suspected they would be doing it. I'm vindicated by how remarkably ineffective it was," he said.
Graham emailed Slater and Odgers in May 2011, including snippets of material from Hotchin's defamation claim against Sheppard and complaints Sheppard had made about Hanover to regulators obtained under the Official Information Act.
Graham concluded the email with three words: "Take him down."
In reply, Odgers sketched out a plan to carry out a sting, with Slater playing "good cop" and planning an in-person meeting to pump Sheppard for information that would be passed to Hotchin's lawyers and used against him.
Odgers said she would undertake more overt attacks: "I will be bad cop," she said.
Sheppard said this planned meeting with Slater never took place and he found the very idea ridiculous. "The fact he could boast that he'd play good cop to me is so self-delusional to be laughable. He isn't capable of being a friend to anyone," he said.
One piece of chaos and mayhem cooked up by Graham, Slater and Odgers involved the latter writing an op-ed for the New Zealand Herald in April 2012.
This column - run without disclosure that Odgers was allegedly being paid at the time by Hotchin and described by her in emails as a "hit" - is now heavy with irony.
"Hanover was deliberately sensationalised by leaks, drip-fed to media and anti-big business bloggers as their conduit," she wrote.
"The FMA played a dirty game."
- Sunday Star Times