Would Australia’s political pundits be as ready to embrace their brand new prime minister Malcolm Turnbull’s unflinching admiration of New Zealand prime minister John Key if they were aware that the subject of Turnbull’s affection had mislead an early 90’s investigation by their National Crime Authority (NCA) into the now infamous ‘H-Fee’ transactions? So what do you think? Would the tran-Tasman bromance still be welcomed despite it? Or would Australia’s journalists and commentators not be distracted by the flush of first love and actually call for the New Zealand prime minister to explain himself? Could Australia’s media do what New Zealand’s so far hasn’t?
When Key’s 1991 statement to the H-Fee investigations surfaced a week before he was elected prime minister in November 2008, the document was largely accepted as ‘truth’ – even to the point that one highly regarded New Zealand journalist used the statement as ‘evidence’ of Key telling the ‘truth’ about one of his more infamous pre-PM brain-fades. In 2007 Key had tried to front foot questions by New Zealand Labour party politicians about his involvement in the H-Fee investigation, and in doing so had told a journalist that the ‘Labour hounds had nothing on him because he had left EMF in 1987 long before any of the H-Fees we’re decided’. When his statement came to light and it showed Key had actually told investigators he had left EMF in 1988, not 1987 as he’d told this reporter, Key confidently reassured waiting media that what he told investigators in 1991 was the real year and if they were to hear anything to the contrary, then it was nothing but a left-wing smear campaign by a desperate Helen Clark and her then incumbent Labour government colleagues.
At the same time as Australia’s (now defunct) NCA were investigating the complex H-Fee foreign exchange movements between Australia’s corporate high-flier Elders IXL and New Zealand’s own Equiticorp, New Zealand’s newly established Serious Fraud Office (SFO) were trying to unravel this and many other dodgy movements of money into the hands of Equiticorp founder Alan Hawkins. The two investigating bodies worked closely together sharing information, running separate prosecutions within their own jurisdictions, with the NCA bringing a case in Australia against some of the offending parties over there and in 1992 in New Zealand the SFO’s brought successful charges against Hawkins. He was subsequently sentenced to six years in prison.
Key became involved in the H-Fee investigations when an ex-colleague of his Paul Richards, now head of forex at UBS in United States, was facing fraud charges for his part in one of the transactions. He had helped to facilitate some of the foreign exchange movements necessary to hide these transactions while working for Elders IXL’s New Zealand based subsidiary Elders Merchant Finance (EMF) in Wellington in 1988. Richards was only ever a bit player and eventually was given immunity from charges in return for giving evidence for the NCA’s prosecution across the ditch. Funnily enough a defense lawyer in that court case alleged Richards and Key’s statements to the investigation we’re completely made up, nothing but utter fabrication. What did they know that we don’t?
Richards who was first interviewed in November 1990, told investigators he could supposedly recall an event from 31 August 1988 because he and an ex-colleague ‘John Key’ had had a lunch that day. He could recall the exact date of the lunch because it allegedly marked his colleague’s last day with the firm. This date was at odds with the evidence of Richards’ boss Peter Camm and Elders IXL executive from Australia, Ken Jarrett, both of whom were also under investigation. Allegedly Richard’s was called away from the ‘lunch’ to meet with these two men. Jarrett had supposedly flown to New Zealand from Australia that morning.
In May 1991 Key was asked to corroborate Richards’ evidence. He told investigators he had given notice on 24 June 1988 and then two months later on 31 August the two colleagues were celebrating his final day, he was leaving EMF to head a newly established forex exchange department at rival finance company Bankers Trust. He confirmed Richards’ evidence about their lunch including how Richards had received a call and had to return immediately to the office. About 45 minutes later Richards allegedly returned, a little shaken but he told Key he could not go into detail other than to say he had just had a very strange meeting with his two co-accused. Allegedly the men continued their lunch and supposedly never discussed the strange turn of events again.
Now at Bankers Trust we were told Key worked with infamous American currency raider Andrew Krieger who was based at the company’s New York branch at the time. This relationship we we’re told was highly lucrative for the New Zealand branch and had soon turned the Auckland dealing room into the number one forex dealing room in the country. Reports about the success of this relationship worked to cement the then Leader of the Opposition’s backstory as a ‘state house kid made good’, a currency trader of some merit, a man at the top of his game, right in the thick of it with the world’s most notorious and infamous best. Key’s ex boss Gavin Walker, now chair of the Board of Guardians of the New Zealand Superfund, told media Key was responsible for the Auckland branch’s relationship with Krieger, it was in his job description to look after him and that as far as Walker was aware Key knew everything that Kreiger was executing across the local branch’s trading desk. Key himself told media he would never forget his first phone call with Krieger as the currency legend asked him about New Zealand’s GDP and it’s monetary supply.
Except Key working with Krieger means there is no time in 1988 that Key could have been working with Richards at EMF – it is simply not possible. Kreiger resigned from Bankers Trust on 23 February 1988 – some six months before the 31 August date Richards had told investigators, and later corroborated by Key, as been Key’s last day before he joined Bankers Trust in Auckland. Krieger’s resignation is well documented. He had disputed the amount of bonus he was due from his 1987 trades and promptly resigned leaving the company within a matter of weeks. Upon leaving Krieger spent one month on holiday before returning to the forex markets with another company. By June 1988 though he was disillusioned with currency trading and left the currency markets altogether, not only the markets but America itself, to study Sanskrit in India. He did not return to the currency markets until sometime in 1990. Even if Key’s statement to the H-Fee investigation is believed, it does not explain how he could trade millions upon millions of dollars of currency with someone that helped turn his trading room into the best in the country, when that person had left the currency markets entirely a couple of months earlier?
Did Key lie to the H-Fee investigations? More than likely. Will Aussie commentators think less of him for it? Hopefully. Not sure if Prime Minister Turnbull will, but no one will ever know unless the New Zealand media start asking Key to explain himself. Or could Australia’s media do what New Zealand’s media so far hasn’t?
In his book ‘Dirty Collars’ ex SFO head Charles Sturt says this of the vast powers bestowed upon his department,
“while a person may be compelled to answer questions, these answers may only be used in evidence if the accused subsequently gives evidence inconsistent with their previous statements”
So c’mon on journos, “where the bloody hell are you?”
2008 30 October Radio New Zealand: Kathryn Ryan(Nine to Noon) interviews John Key about H-Fee a week before 2008 General Election
Legal scholar & author Frank Partnoy interviewed Andrew Krieger for the book “Infectious Greed: How Deceit and Risk Corrupted the Financial Markets” and dedicated a chapter to him. The intro & chapter featuring Krieger ‘Patient Zero’ can be read free on Amazon Kindle +PC. Click “Read first chapter free” to view.
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