John Key and the foreign trusts

So, Mossack Fonesca bites again. A few weeks after the “Panama Papers” had National scrambling for answers to counter the rage on the centre-left, Prime Minister John Key’s Government has been left embarrassed again by new revelations that his lawyer had lobbied intensively to stall what they thought was going to be a law change on foreign trusts. As the dust begins to settle on this latest twist in the Mossack Fonesca saga, I have to wonder how many more hits this Government can sustain before it causes them damage that cannot be repaired.

Thus far the pollsters have been very quiet over Mossack Fonesca. A cynic might say that they work for the Government, and that the media are supremely biased in National’s favour. But to some extent the failure of Labour and the Greens to join New Zealand First in making a sustained attack on National using these revelations could be the reason for the latter continuing to climb in the polls and the other two remaining largely unchanged.

So, what  is the latest?

Simply put Prime Minister John Key’s lawyer Ken Whitney lobbied the Government after hearing reports that the then Minister for Revenue Todd McClay was considering a law change to how foreign trusts work in New Zealand. Mr McClay was supposed to attend a meeting held at the Antipodes Trust where Mr Whitney works. The agenda for the meeting included discussing the Government making a commitment to not changing the law. After that the Government decided there would be no change in the law as the Antipodes Trust claimed it would be severely damaging to the industry.

A brief timeline of events looks like this:

  •  In 2013 the Inland Revenue Department warned about the risks posed by foreign trusts
  • In December 2014 the Antipodes Trust began lobbying against proposed changes
  • The same month I.R.D. again warned about the risks posed by foreign trusts
  • Still in December 2014 the then Minister for Revenue Todd McClay met with Antipodes Trust
  • In May 2015 Mr McClay announces there will be no change of the law
  • In the same month I.R.D. tells their staff that there will be no change in foreign trust law
  • In April 2016 Mossack Fonseca is found to have released a massive number of files relating to foreign trusts around the world – New Zealand is mentioned up to 60,000 times
  • In April 2016 Prime Minister John Key’s lawyer Ken Whitney, who works for Antipodes Trust is found to have lobbied on their behalf for the Government to not change the law

Well, even before the Mossack Fonesca leak occurred, it would seem that New Zealand’s reputation amongst criminal elements as a haven for financial dirt was causing I.R.D. some problems. And it would seem that the Government elected to sweep it under the carpet in the hope that it would not be noticed.

Am I surprised?

Not particularly.

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