The Dim-Post

May 27, 2010

Maybe I’m missing something . . .

Filed under: Politics — danylmc @ 7:10 am

But the TV3 story about Key and his vineyard sounds a bit daft to me: Key invested in the vineyard before he was elected and his investments were then placed into a blind trust – is he supposed to pretend he can’t remember buying a vineyard? Or assume that his blind trust monetised everything? (He probably gave specific guidelines to the contrary).

The PMs statement about the trust is a bit disingenuous:

I don’t know whether I own any assets or not,” says Mr Key. “The only assets are in our blind trust. I don’t know what those assets are.

The way I see it the purpose of the trust is to prevent him making investments based on his privileged knowledge available to him as Prime Minister – but Key can use it to avoid declaring conflicts of interest by pretending not to know what’s in his trust even though in reality he’ll have a pretty precise idea. That’s a wider issue though – just about every senior MP in the house has a trust that they use to conceal their assets from the media and the public (as well as rort the tax system).

Watching the news story reminds me that I dreamed about Paddy Gower a couple of nights ago. I can’t remember anything about it but I’m pretty sure it was a sex dream.

Pretty sure.


  1. Paddy Gower looks like a [redacted]! Just sayin.

    John Key’s Pinot has a hint of speeder-gate and light touches of painter-gate. I think its storm in a wine glass, but he has given it legs. He owned it then transferred it into the blind trust so was aware of the ownership. Making the PM’s wine from the same company, not such a good look, and not giving Paddy Gower any at Christmas was a big mistake in hindsight..

    The usual suspects have leapt into a kamikaze style defence, calling it a smear job. All the while conveniently forgetting that during the ‘Klarkkkkk Femnazi Regime’ the usual suspects were yelling ‘the socislists are corrupt’ and putting up billboards and blogs with bad photoshop skills to that effect. Unfortunately blowback is like an oil slick in that it washes ashore and covers everything in sticky black shit that takes years to clean up and fucks up the environment for generations.

    Comment by andy (the other one) — May 27, 2010 @ 8:02 am

  2. Whinegate, surely.

    Blowback – now defined as complaining about obnoxious behaviour in the past by others but now wallow in it while denying they are and pretending to be sooo much better.

    Comment by Neil — May 27, 2010 @ 8:31 am

  3. “I dreamed about Paddy Gower a couple of nights ago. I can’t remember anything about it but I’m pretty sure it was a sex dream.”

    One. Sick. Puppy.

    Hell, one entire dog pound with bubonic plague…..

    Comment by rob Hosking — May 27, 2010 @ 9:08 am

  4. “John Key’s Pinot has a hint of speeder-gate and light touches of painter-gate. I think its storm in a wine glass, but he has given it legs.”

    Agreed – I find this particular blue-label vintage opens very briskly, and follows with almost suspiciously light touches from a palette of fruity flavours.

    The original materials may be understated but some creative management has seen this one develop a satisfying zing.

    Best enjoyed for drinking now, since this one is unlikely to last well in the cellar; look out for similar drops from this maker under the supermarket-friendly Backbencher label later in the term. Also expect a dropoff in interest from buyers when Duncan Garner starts talking up cheeky reds.

    Comment by Sam Finnemore — May 27, 2010 @ 9:21 am

  5. I have no idea how trusts (blind or not) work, so I have a question: Is it possible that Key’s blind trust could buy and sell shares in companies such as this vineyard without telling Key?

    If that were the case, then Key could be telling the truth – not so much that he doesn’t know if he owns part of this vineyard, but that he doesn’t know if he *still* owns part of this vineyard.

    All that aside, it’s a pretty thin story to run at all, let alone to lead TV3’s 6pm bulletin.

    Comment by Ataahua — May 27, 2010 @ 9:30 am

  6. You know its a weak story when it opens with ‘politics is all about perception’: ie, ‘he hasn’t actually done anything wrong, but if we try really hard people might possibly think he has’. I’m no fan of John Key, but this is just silly.

    Comment by Helenalex — May 27, 2010 @ 9:36 am

  7. I couldn’t believe it when I saw it last night. An utter waste of time.

    Comment by Michael Stevens — May 27, 2010 @ 9:47 am

  8. Politics can be about perception, but journalists who say ‘politics is all about perception’ are chickening out on their responsibility to evaluate the reality behind the perception.

    Comment by kahikatea — May 27, 2010 @ 9:51 am

  9. It sounds silly to me too. Key is using the standard tools to manage his situation/money, same as everyone else. If there is a problem with the tools (and I see no evidence of it here, though I’m hardly qualified to judge) then pick on the tools, not on Key personally.

    Comment by Roger Parkinson — May 27, 2010 @ 9:55 am

  10. Comment deleted ouch…

    Anywho, I can’t believe I am saying this, but what happened to Garner? I know everyone is entitled to leave but it seemed strange that he was nowhere to be seen around budget time. Gower and Rebecca wright make a pretty appealing political team…

    Comment by max — May 27, 2010 @ 10:05 am

  11. I have no idea how trusts (blind or not) work, so I have a question: Is it possible that Key’s blind trust could buy and sell shares in companies such as this vineyard without telling Key?

    Ah, see that’s the beauty of it. It is technically possible for any Minister’s trust to buy and sell whatever they like – but in a long term profitable investment like this (and, presumably, 95% of the rest of Key’s equity) they are never ever going to. So a Minister never has to declare a conflict of interest – because technically they don’t know what they own because its in the blind trust – but in reality they know with 99.9% confidence what is in the trust.

    Comment by danylmc — May 27, 2010 @ 10:07 am

  12. Danyl,
    I wonder if after the trust becomes unnecessary,
    and he gets to look at what they did,
    and if they did something silly,
    that avoided what would have been a conflict of interest;
    he could sue them for breach of fiduciary duty.

    I guess not. But he should try it for the lulz.

    Comment by Pascal's bookie — May 27, 2010 @ 10:17 am

  13. Sam @ 4

    That’s actually very clever – props to you.

    Comment by Phil — May 27, 2010 @ 10:18 am

  14. Maybe I’m missing something . . .

    I’m not entirely sure I’ve got the story understood, but I think the problem is not that the Blind Trust is blind. Its that John Key has circumvented the Blindness of the Trust that is an issue.

    The Cabinet Manual recommends the use of blind trusts to ensure a minister can never be sure what his holdings are at any given time so there can be no conflict of interest.

    But Mr Hodgson said investigations by Labour showed Mr Key’s assets began to be transferred to a company called Whitechapel Ltd shortly after the 2008 election. That included his shares in Dairy Investment Fund Ltd, an interest in Highwater Vineyard in Central Otago and – later – a property company Earl of Auckland.

    Mr Key gave away signed bottles of “J K” wine last Christmas with Highwater on the label.

    Mr Hodgson said it was easy for Mr Key to know he still owned those assets because they would show up in a search of Whitechapel at the Companies’ Office register. It was clearly a vehicle used by the trust managers to manage Mr Key’s assets.

    “Whitechapel happens to be one London subway station away from his blind trust, Aldgate.”

    Whitechapel isn’t blind, Key knows exactly what assets it holds, the contention is he knows it holds the assets in his blind trust Aldgate and what those assets are.

    Comment by Sean — May 27, 2010 @ 10:37 am

  15. Danyl – “…profitable investment like this…”

    A vineyard? Surely you jest.

    But your other point is right. Key puts all his assets in a blind trust less than 2 years ago. Unless he puts the trust in the hands of a buy/sell maniac, it is highly likely little of his portfolio has changed. That’s not Key’s fault.

    Hodgson’s other line of attack is that Key handing out bottles of his wine 6 months ago proves he knew that the vineyard still existed (I hope for Labour’s sake the wine wasn’t bottled the previous year).

    But really the only way that Key could remain 100% squeaky clean in the eyes of Labour is that ALL of his assets are sold, and reinvested by a Blind Trust (trustees approved by Labour of course).

    Comment by Pat — May 27, 2010 @ 10:41 am

  16. I was wondering what had distracted Labour from developing a coherent tax policy. No doubt the public will come away with the knowledge that Key invested in a hugely liked and admired NZ product and that he set up a trust to handle his assets while PM.


    Comment by Neil — May 27, 2010 @ 10:49 am

  17. Yes Pascal’s bookie the trustees have a duty to act in a prudent manner and if in the eyes of the Court have not been prudent, would be liable
    Despite this
    “A trustee will not be liable for any losses suffered by the trust if he or she acts prudently and considers the interests of all beneficiaries (discretionary or otherwise).”
    Of course hindsight is great but being a Trustee is not without some liablities

    Comment by Raymond A Francis — May 27, 2010 @ 10:53 am

  18. Thanks Sean – now I see what Labour are saying. I’d be curious to know why Key set things up this way but in the absence of any actualy conflict of interest I still don’t think there’s much of a story.

    Comment by danylmc — May 27, 2010 @ 10:53 am

  19. Interesting story. Well, the story itself is a load of old clarts, but the warning sign for Key is surely that the average Joe “aww shucks” sloppiness with the truth PR routine that had journalists fawning over him just a few months back is outstaying its welcome…

    Next: Jonathon Marshall exposes Key’s Hotchin Hawaiian connection, with dog whistles about out of touch elites lording it while Kiwi battlers on struggle street can’t afford even a long weekend in Noosa that costs less than Key’s weekly tax cut…

    Comment by Sanctuary — May 27, 2010 @ 11:04 am

  20. Why have a blind trust when you could just, you know, not invest in a way that looks like you’re using your position to your advantage? That’d be my way of dealing with it. You know, not investing in things that I can have some control over and where I can gain advantage. Just sayin’.

    Comment by dontsurf — May 27, 2010 @ 11:20 am

  21. You know, not investing in things that I can have some control over and where I can gain advantage.

    are you suggesting politicians shouldn’t invest in the NZ economy?

    Interesting timing though. I suppose Labour have given up on getting any traction on the economy but to have gone back to personal attacks on Key seems a little crazy given it didn’t work very well in the election and when it distracts from mining and Bennet. But I don’t see any evidence the Labour have any concerns over their strategy team.

    Comment by Neil — May 27, 2010 @ 11:31 am

  22. From Gower’s blog:

    “The Companies Office shows Mr Key and wife Bronagh initially purchased their share of the vineyard in their own names on September 8, 2008. In November he became Prime Minister.

    On December 22, their one-tenth share of the vineyard was transferred to Whitechapel Limited.”

    So that’s no big deal, Key had ‘known’ ownership for barely 3 months. Hardly had time to crush a grape.

    Trouble is, Key then comes across as a big-noting tosser. He says he owns a vineyard, he wants Jancis Robinson (i.e the wine world) to know about it, he says owning it is a lot of fun, he hands out his personalised bottles, etc.

    Impropriety? Nothing proved. But definitely guilty of being a dick.

    Comment by sammy — May 27, 2010 @ 11:45 am

  23. are you suggesting politicians shouldn’t invest in the NZ economy?

    No, but I am saying that – for example – perhaps Judith Collins shouldn’t hold shares in GEO Group, or Brownlee shouldn’t be holding shares in Rio Tinto, and that this shouldn’t even be possible even with the aid of a blind trust where they can claim ignorance of the investment.

    As an example.

    Comment by dontsurf — May 27, 2010 @ 11:47 am

  24. ds – To acheive that sort of rigorous conformity you would need the blind trusts to be independently audited and publicly reported on. At which point the blind trusts are no longer blind.

    Comment by Pat — May 27, 2010 @ 11:54 am

  25. No, you’d just require ministers’ shareholdings to be open.

    If you want the job, then you expect certain privileges. If you get certain privileges, then you expect that you’re going to have to pay certain penalties too. One of those penalties is on the freedom to invest however you want. If you don’t want that, then don’t become a politician.

    Simply saying, “Oh, I didn’t know” isn’t good enough, especially when it’s possible to manipulate blind trusts by using proxies and when you can know where your money’s invested simply by doing a Companies Office search.

    Comment by dontsurf — May 27, 2010 @ 12:02 pm

  26. So you would ban blind trusts?

    Comment by Pat — May 27, 2010 @ 12:06 pm

  27. Well, in various forms, around the world, some kind of regulation on blind trusts has been made, usually on the back of some kind of scandal. Which this isn’t, but there has been one recently in South Africa. One that springs to mind immediately is the UK ban on blind trusts funding any form of political activity on the back of blind trusts who’d supported Labour financially and then whose beneficiaries were given life peerages but had plausible deniability.

    The short answer is that yes, I would, but experience around the world has shown that the majority of the legislature wouldn’t, because they’re in their interests. They’re not in the public interest, so I’d be looking to tightly regulate and set up an independent auditor to check on conflicts of interest within blind trusts. This isn’t anything new or any kind of major reform – parliamentary oversight committees often operate with the provisio that what they check on can’t be made public as a matter of course, but that anyone who breaks rules will be made publicly accountable.

    This is just me, see, but I honestly believe that if you’re selected to govern then you’ve selected a life that not many would choose to do, but for which you receive enormous privileges. But in order to do that job properly, then not only do you have to be properly remunerated, but you also have to place that job above and beyond any other commitments – excluding your family, of course, but including things like holding company directorships, shareholdings, charitable interests, etc. and place the public interest at the forefront of your working life. If you have a blind trust, then you’re working on the honesty principle that says that you won’t have proxy investors, that you won’t check on Companies Office, that you won’t be having quiet words with the trustees via your accountants. See, you might want to trust someone – haha – but it only takes one person to bend the rules for their own gain for everyone to be tainted.

    It’s the proper thing to do, to ensure transparency and accountability – principles that governments go large on with their mouths, but which individual MPs are pretty shit at.

    Comment by dontsurf — May 27, 2010 @ 12:46 pm

  28. Paddy was the only bloke in JJ Murphy’s last night wearing a suit.
    (puts spy camera away)

    Comment by Clunking Fist — May 27, 2010 @ 1:57 pm

  29. Twenty eight comments down, and you haven’t yet been called out on dreamed?

    Comment by Phil — May 27, 2010 @ 5:35 pm

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