Real reason behind Judith Collins' demise
Justice Minister Judith Collins' resignation was sparked by a Fairfax investigation into a smear campaign by bloggers apparently backed by controversial financier Mark Hotchin.
Hacked emails appear to show Hotchin secretly paid bloggers Cameron Slater and Cathy Odgers to write attack posts undermining the Serious Fraud Office, its director Adam Feeley, and the Financial Markets Authority, who were probing his collapsed Hanover Finance in 2011 and 2012.
The emails indicate the campaign was orchestrated by Hotchin's then spokesman Carrick Graham, a PR consultant and tobacco lobbyist.
Hotchin is a former part-owner of the Warriors league team who built New Zealand's most expensive residential home in Auckland. Hanover Finance collapsed in July 2008 owing $465 million to 13,000 investors.
Knowing Fairfax was investigating the hacked emails, it is believed Odgers (known by the blog name Cactus Kate) went through her own emails and found some that could be seen as implicating Collins. This correspondence then found its way to a Beehive staffer on Friday.
"I take it you found the smoking gun," Odgers said in an email to Fairfax shortly before Collins resigned. She declined to comment further yesterday.
In fact, Fairfax did not have that particular incriminating email, and the hacker known as Rawshark said yesterday he did not have it either. "That email wasn't leaked by me, I had nothing to do with it," said Rawshark, who was also the source for Nicky Hager's book Dirty Politics.
But Fairfax did have a large tranche of emails that inform an in-depth investigation revealing Hotchin's apparent backing for the smear campaign.
Collins resigned after Prime Minister John Key confronted her with the email yesterday morning. She denied any involvement in the campaign against the SFO and Feeley, saying the allegations were "extremely distressing and disappointing" and that she had been the victim of a two-year smear campaign.
She asked Key for an inquiry into the allegations to clear her name, while Opposition parties said investigators should be given immediate access to her office to "preserve evidence".
The "smoking gun" email detailed how Slater was briefing a number of journalists, including this reporter, about the anti-Feeley campaign.
Slater wrote: "I spoke at length with the Minister responsible today (Judith Collins). She is gunning for Feeley. Any information that we can provide her on his background is appreciated."
Slater said yesterday the line about Collins gunning for Feeley wasn't a lie, but "embellishing is a good word".
The new documents appear to show PR consultant Graham paid Slater and Odgers to write dozens of posts attacking regulators and a possible witness.
In one email, Odgers said: "Remind him [Hotchin] he pays cam n I to f--- w FMA so he can focus on important things."
Another email appears to discuss plans to undermine the credibility of a potential witness in the Hanover investigation, property developer Tony Gapes.
Graham wrote in one email: "Just off ph to MH . . . Seems our friend Tony Gapes is thinking he's a bit of a star witness for the SFO against our man."
He added that Gapes "should have some sunlight shone on him. Enough to raise questions of credibility with the SFO".
Feeley, now chief executive of the Queenstown Lakes District Council, said he had been aware of a campaign being run against him by Slater and Odgers, but was unsure of its motivation. "I questioned their motivation. I knew that what they were saying, most of it, was at best totally wrong and, at worst, total lies."
Feeley saw some justice in the affair being exposed: "Maybe there's some karma going on here."
He said in a statement yesterday he strived to ensure he had professional and constructive working relationships with ministers, and stood by his statement.
Simon McArley, who oversaw the Hanover investigation for the SFO, said the revelations uncovered by Fairfax gave him cause for "very strong concern" and he backed calls for a formal inquiry.
"It seems to me . . . to have the potential to have undermined the integrity of the [Hanover] investigation," he said. "It is equally concerning that there may have been the involvement of a Minister of the Crown in all this - what connection there is we need to find out."
The SFO closed its investigation into Hanover last year, with no charges laid. The FMA also declined to lay criminal charges but has filed a still-live civil suit against Hanover directors and promoters.
Key told reporters yesterday Collins had no option but to resign.
"The nature of the email I've released indicated a very serious matter to me, I think the only option would have been for the minister to resign, but in the end she can see the seriousness of it, and also she's very keen to clear her name," he said.
Key said he had no regrets about not sacking Collins sooner.
"As Prime Minister I have to deal with every situation that comes along and on the basis and merits of the facts. In my view, this is a far more serious matter than anything else I've seen." He added: "This is a situation which on the face of the email - which I accept is not an email which she wrote or was even aware of - that would certainly indicate that there were at least a number of people looking to undermine the head of the Serious Fraud Office."
Slater told media that Collins was a good friend who had been taken down "by a death by a thousand cuts". "I am gutted for her. John Key has said it many times, she has worked very hard and been a very good minister. So good in fact that she has been the focus of a sustained, co-ordinated conspiracy."
Labour leader David Cunliffe called for a full commission of inquiry into the allegations. A minister allegedly undermining a chief executive under their control was unacceptable, he said.
Collins said she'd still stand for Papakura at the election.
She had already been on a "final final warning" from Key after admitting she passed details about public servant Simon Pleasants to Slater. She was in also in trouble after she was less than candid about her engagements on an official visit to China, where she met with a border official with the founder of Oravida, a company on which her husband was a director.
Sunday Star Times