Labour's smoking gun backfires again

17:00, May 28 2010

There is more than a whiff of the H-bomb debacle about Labour's pursuit of John Key over his blind trust. That must be particularly galling for the new generation on Labour's backbench.

The burning question is why anyone in their right mind would want to revive memories of a Labour Party that spent its dying days in office trawling through Australian court records for non-existent dirt on Mr Key. The equally troubling question for the rookies must be why Labour's old hands are intent on repeating the same mistakes.

To be fair, it may take a few days before the dust truly settles on the question of whether there is, in fact, a smoking gun. For now, in the absence of one, Labour has prepared what it believes to be the next best thing – a timeline. It looks something like this.

In September 2008, a few months before the election, Mr Key told reporters he was moving to ensure all his investments would be managed by a blind trust. This was not to hide his investments from the public, but to remove himself from any decision-making role in relation to those assets so as to avoid conflicts of interest.

A week after the election, a company called Whitechapel Ltd was registered with the Companies Office. From December onward, Mr Key's assets began being transferred to Whitechapel. These included his shares in a dairy investment fund and a vineyard. Obviously, these were investments he had held for some time so he was, of course, fully aware that these were among assets held by his blind trust. The transfers continued up until April. In May, the Register of MPs Pecuniary Interests listed a blind trust called Aldgate (another London Tube stop near Whitechapel).

In January 2009, Mr Key told a British wine commentator that he owned a vineyard and it was doing quite well. Since this is only a matter of weeks after he set up his blind trust, it was probably a reasonable assumption for him to make that he owned the vineyard still, even if – theoretically – he was supposed to have no way of knowing if it had since been sold by the trustees. (Of course, this assumption does not form part of Labour's timeline.)


One mystery in all of this is how TV3 managed to obtain footage of that conversation. It was clearly taken on a cellphone which only goes to prove that, in this digital day and age, no conversation is private any more. But leaving that aside, the video was a complete red herring. The conversation took place far too soon after the blind trust was set up to prove anything. So back to the timeline:

In December 2009, Mr Key gave away bottles of wine labelled JK, PM's Pinot, with his Highwater Vineyard label (I was one of the journalists who received one).

When Labour MP Pete Hodgson questioned Mr Key this week (nearly 16 months after that conversation with the wine critic), Mr Key said he didn't have a clue where his assets were held.

So Labour's case against Mr Key goes something like this. It's easy to find out what assets are held by Whitechapel Ltd because they show up in any search of the Companies Office register. Mr Key must have known that the assets in his blind trust had been transferred to Whitechapel, because the Tube station link was too much of a coincidence otherwise. Ergo, so Labour's thinking goes, Mr Key was not telling the truth when he said he didn't know what was in his blind trust. Unfortunately for Labour, Mr Key insists that he didn't know about Whitechapel. Until it can prove otherwise, that is a dead end.

Now, this is where things get really woolly. Other investors in the vineyard happen to be supermarket bosses. Supermarkets sell booze. The Law Commission is urging the Government to make a raft of liquor law changes. Cabinet will eventually receive a paper from Justice Minister Simon Power outlining which of those changes Parliament should debate. Mr Power has already ruled out one of the commission's recommendations – raising the excise tax. Ergo, so Labour's thinking goes, Mr Key is hopelessly conflicted.

Quite apart from the fact that this seems to be a giant leap in the absence of any particularly strong evidence – and leaving aside the fact that some of these changes will probably be the subject of a conscience vote – Mr Key says that, with the exception of one, who happens to be a mate, the other investors are unknown to him. Since the conflict of interest claim would appear to rely on Mr Key meeting up with his fellow investors in a smoke-filled room somewhere at least once, then his claim not to know most of them puts a damper on things.

* * *

So where can Labour go now? It has to prove that Mr Key lied about not knowing the other investors. Or that he lied about Whitechapel. So far, it has shown no sign of having the evidence to prove either. So it's H-bomb deja vu.

To jog memories, scandal erupted on the 2008 campaign trail when it was revealed that Labour Party president Mike Williams had flown to Melbourne with members of the Labour research team to trawl through court documents in an attempt to link Mr Key to one of our more notorious white-collar crimes. They believed they had found Mr Key's signature on one of the so-called H-Fees – payments totalling $75 million to Equiticorp. It was a Fairfax journalist in Australia who conclusively proved that the signature – while bearing a striking similarity to Mr Key's – belonged to someone else.

It was probably that last, desperate attempt to smear Mr Key that hammered the final nail in Labour's chances of re-election. But it wasn't the first time Labour had targeted him. Back in 2005, the party approached numerous journalists trying to get them to pick up a story about the address Mr Key gave for electoral purposes.

He was enrolled in his Helensville electorate, where he owned a property, while clearly spending most of his time living in Parnell. This was before Mr Key was even National Party leader. Labour was convinced it would prove his undoing, despite everyone from Clerk of the House David McGee down insisting that Mr Key had done no wrong.

Labour's frustration at the failure of the media to pick the story up and run with it was palpable. The story was hawked around for more than a year before it finally died. Labour had more success in 2008, when Labour researchers dug up details of Mr Key's TranzRail shares and supplied them to TVNZ, who caught Mr Key out being less than upfront about the number of shares he owned.

Why so determined to drag him down? It is not personal. Labour just want to chip away at the fairytale. Mr Key's rags-to-riches tale of a state-house boy made good is a huge political asset. Understandably, Labour sees a huge upside in denting that and its goal is to taint the fairytale with the usual big money associations. But it hasn't done that so far with these latest allegations. Nor with the prevous attempts – which, in the case of the H bomb, came at a heavy cost. And the wounds from that had only recently healed.

So if Phil Goff's leadership was supposed to turn a new chapter, why on earth reopen them – and, in the process, risk reminding voters that the old hands they voted out are still in charge?

The Dominion Post