Dirty deals in paradise

By Kathryn Powley

Inland Revenue will act on leaks alleging Pacific tax havens use NZ companies

New files say money-laundering has spread since the 1994 Winebox Inquiry.
New files say money-laundering has spread since the 1994 Winebox Inquiry.

The Government has welcomed leaked documents shining the light on shady politicians, arms dealers and businessmen allegedly laundering their ill-gotten billions through New Zealand companies.

More than 2.5 million files were leaked to the International Consortium of Investigative Journalists (ICIJ), detailing companies, politicians, arms dealers and businessmen all involved in avoiding taxes through complex company structures around the world.

New Zealand and the Cook Islands feature prominently, accused of lax regulations that turn a blind eye to the movement of large sums of money.

The Guardian reports New Zealand lawyer Mike Mitchell, who lives in the Cook Islands, founded and later sold TrustNet, a company with at least 30 clients accused of fraud, money laundering and misconduct.

Born in Gisborne, Mitchell, 68, practised as a criminal barrister after attending Victoria University. He has been a permanent resident in the Cooks since 1986, but is believed to be in New Zealand at present.

His career in the Cooks has included time as foreign affairs secretary, solicitor-general and the Cooks' High Commissioner to New Zealand.

When the Cooks last came under scrutiny in the Winebox inquiry in 1994, he told media: "You're meddling in something you don't understand. There's enough corruption in New Zealand. You keep out of Cook Islands business. Concentrate on the arseholes in the Beehive and leave us alone."

Yesterday, he did not return calls.

A Te Atatu rental home is also named as the registered address for a suspect company. However, the residents there told the Herald on Sunday they knew nothing of the company. Another 61 companies are also registered to the address.

Another New Zealand connection is through Mel Braham, millionaire head of a UK cosmetic surgery chain, who used to run a hair transplant clinic in this country. The ICIJ identified Braham as the man behind an anonymous offshore entity allegedly used for hiding money.

Braham's Harley Medical Group has attracted criticism for refusing free replacements to women during the PIP silicone breast implant scandal, the Guardian reported.

Revenue Minister Peter Dunne welcomed the leaks, saying the IRD would act on the information.

"We are aware that New Zealand shell companies have been used in offshore arrangements and the Government is acting to resolve this issue through the Companies and Limited Partnerships Amendment Bill."

However, ICIJ investigative journalist Nicky Hager said New Zealand's slack policies were a big part of the problem.

NZ First leader Winston Peters said the new revelations showed the use of Pacific Island tax havens identified in the Winebox affair had now spread beyond the Cook Islands, to Fiji, Samoa and Vanautu.

"In some cases they're acting out of innocence, in some cases they're acting out of convenience, in some cases they're corrupt."

- Herald on Sunday

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