Antipodes email: Key calls Greens 'desperate'

Email from PM's personal lawyer to (then) Inland Revenue Minister Todd McClay was followed by a government back down. The Greens claim the two events are connected.

See also: Antipodes email: Greens' conspiracy theory just doesn't stack up

The Green Party says an email released under the Official Information Act shows John Key's personal lawyer, Ken Whitney, lobbied the government about proposed changes to the foreign trust regime in December 2014 (scroll to the end of the story to see the email).

The email, sent to (then) Minister of Revenue Todd McClay, followed a 2013 Inland Revenue report that warned about perception issues, saying “our foreign trust rules continue to attract criticism, including claims that New Zealand is now a tax haven in respect of trusts. To protect our international reputation, it may be necessary to strengthen our regulatory framework for disclosure and record-keeping. This, in turn, raises the question of whether our foreign trust rules are sustainable.”

The Greens claim the foreign trust industry is using its influence with the government to stop the IRD from clamping down on the sector.

The body of the email from Mr Whitney to Mr McClay reads, in full:

"I am writing to you on behalf of a group of industry professionals operating in the New Zealand foreign trust industry. 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.

"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.

"I would be most grateful if you could advise what dates and times you may have for a meeting with perhaps 3 or 4 of us to put the industry's case and clear up any misconceptions which may be changing the current change of view at IRD."

The day after the email, a meeting was reportedly arranged between Mr Whitney, and five other representatives of the trust industry, with Mr McClay at Antipodes' offices on Shortland St in the Auckland CBD.

The government decided not to review the foreign trust industry in May last year -- although after the Panama Papers leak this year it did draft John Shewan to carry out a review of foreign trust disclosure rules, which is under way.

Earlier this month, soon after the so-called Panama Papers leak, the prime minister declared a short-term deposit with Antipodes Trust Group.

Antipodes Trust Group refers to itself as a “specialist provider of trustee and associated services for foreign trusts using New Zealand as their jurisdiction of choice” on its website.

It also says it offers a "tax-neutral environment for New Zealand-based foreign trusts, which are a well-established vehicle for carefully managing the inter-generational transfer of wealth."

The group’s executive director is Mr Whitney, who serves in the role in addition to being Mr Key's lawyer. He previously worked at Ross + Whitney but moved to Antipodes Trust last year.

“Ken Whitney has been the Prime Minister’s lawyer for a long period of time," a spokeswoman for Mr Key said on April 12.

PM's office responds
This morning, Julie Ash with the Prime Minister's Office told NBR, “As the Prime Minister has said previously, following a New Zealand Herald report on the issue he was asked by his longtime lawyer Ken Whitney at an informal gathering in 2014 whether the Government was planning any changes around the foreign trust regime in New Zealand.

“The Prime Minister said he wasn’t aware of any changes and directed the query to then Revenue Minister Todd McClay.

“People raise various issues with the Prime Minister all the time – at events such as school and business visits, and informal gatherings all around the country, as well as in written correspondence. It is common practice for him to refer them to the appropriate minister, where appropriate, or to answer if he is able to do so.

“These are just more desperate claims from the Greens."

Regarding whether the IRD should have continued to look into the issue of foreign trusts in 2013, she said,  "The minister’s view at the time was that this would have required IRD to dedicate significant resources to an area which did not affect new Zealand’s revenue base and other issues were deemed more important. Also, there is already an ongoing OECD work programme looking into ways to address the issue, which New Zealand is participating in.”

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RAW DATA: The email released under the Official Information Act from Antipodes Trust Group executive Ken Whitney to (then) Revenue Minister Todd McClay:

(Click to zoom)

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