The Antipodes email

The Herald reports:

John Key’s personal lawyer cited a conversation with the Prime Minister when lobbying a Minister about a potential crackdown on the lucrative foreign trust industry.

Ken Whitney, the executive director of boutique trust specialist Antipodes, wrote to then-Minister for Revenue Todd McClay on December 3, 2014, over concerns Inland Revenue were sizing up the sector.

“We are concerned that there appears to be a sudden change of view by the IRD in respect of their previous support for the industry. I have spoken to the Prime Minister about this and he advised that the Government has no plans to change the status of the foreign trust regime,” Mr Whitney wrote in an email.

“The PM asked me to contact you to arrange a meeting at your convenience with a small group of industry leaders who are keen to engage to explain how the regime works and the benefits to NZ of an industry which has been painstakingly built up over the last 25 years or so.” …

Mr Whitney denied any conflict of interest between his role working for John Key and lobbying the government, or any preferential treatment from Ministers.

“As you can imagine, naturally, I do speak to the PM from time to time on personal business. So I just used the opportunity to bring it up, to inquire – and who we should we talk to. And his response was ‘Minister McClay,'” he told the Herald.

Mr Key said there was nothing unusual or inappropriate about Mr Whitney raising the issue with him or referring to the discussion with the Prime Minister in his letter to Mr McClay.

“No, because that happens all the time. There’s nothing unusual about it. People ask me about particular issues. I don’t live in a vacuum. I do what is absolutely the correct thing to do, which is send them off to the minister. There’s nothing I wouldn’t have done on a million of other occasions which was to direct them to the minister and let the ministers get on to do their work.”

Mr Key said his talk with Mr Whitney followed a story which said Inland Revenue was changing its approach to foreign trusts – a report Key said was inaccurate.

“There was a story in the Herald, he asked me about it, I said to go and see the minister. After that I never had any involvement. I didn’t even know what he’d done. I just knew there weren’t any changes as far as I knew.”

The Prime Minister’s Office stressed he was not involved in any subsequent discussion about reviewing the foreign trust industry.

While the substance of the story might be trivial (PM referred his lawyer to the appropriate Minister), the perception is pretty horrible. It gives the opposition an avenue to tie the PM in.

I think this makes it more likely there will be law or policy changes, as the Government won’t want to be seen to be doing nothing.

Having said that it is still far from obvious to me that there is anything wrong on the NZ side. NZ shares all information on trusts with other countries so long as we have a tax agreement with them. The problem is a few countries like Panama have chosen not to have one.