Justice Paul Neazor: How a newspaper was led astray

The newspaper's involvement in the story began with an Australian journalist who was working on what was believed to be an international intelligence activity known as Operation Weasel, said to have involved New Zealanders living in Asia.

Operation Weasel was said, among other things, to have involved the setting up of an embassy in Beijing for the Government of Nauru.

The head of the Nauruan Embassy in Beijing was readily identified under the name Jack Sanders. The Australian journalist and others had expressed a belief that he was some sort of intelligence operative who had worked for various agencies in New Zealand on a contract basis, including the SIS.

There was no suggestion that the Operation Weasel matter had anything to do with the SIS, and the Director of Security told me he had not heard of it.

Anthony Hubbard, of the Sunday Star-Times, made contact with Mr Sanders by email on October 4, 2004 and arranged to continue email communication with him about the Weasel matter, and with another man who was introduced through Mr Sanders. Various information available to me points to this being a Mr Gerald Thorns.

A connection is readily made between Messrs Sanders and Thorns. They are both associated with the organisation called Global Pac.

The dealings between Mr Hubbard and the sources continued in relation to Operation Weasel. One of the emails attributed to Mr Thorns said the New Zealand Prime Minister must have known about this operation, and referred to an event in Washington when it was suggested that the Prime Minister and another of the sources were present, and that this matter was probably discussed.

The Prime Minister has seen that and advised that there is no truth in what is said or implied in it.

On October 21, after Mr Hubbard had said he did not think he would write anything about Operation Weasel, he received an email from Mr Sanders. The content related to old emails and disks that are in safe places, making a reference to Brussels.

The important text was: "Might have some more on the Maori activist stuff. I have other items not of much concern. I was really busy at the time I was asked to participate in the Maori activist monitoring op called Operation Leaf. It involved six computer/internet-savvy staff: three in Auckland, two in Wellington and one in Christchurch.

"They infiltrated Maori groups, using email, but with some face-to-face contact as well. The directive was to glean information on protest plans, legal information about claims, financial information, records, things that implicated current ministers as well, especially anything useful ... "

Thereafter Mr Hubbard's attention switched to the SIS-related story. He said he was genuinely surprised by what he was told, but saw it as involving precise and checkable information.

Mr Hubbard was told by Mr Sanders that he had set a trap for Mr Whititera Kaihau, described as a Maori sovereignty activist, by posing as a diplomat (the Nauru Embassy, Beijing) who would have an interest in relating in some way the issue of Maori sovereignty passports and the Government of Nauru. This was said to be a different way of cultivating relationships with Maori groups.

When I spoke to Mr Kaihau by telephone he said that approach had taken place but his concern was more to do with forestry matters.

Mr Kaihau told me he thought his computer might have been interfered with, because it would not work properly. Other than that, there has been no suggestion that his computer was ever touched.

In the week of October 25, 2004, Mr Nicky Hager was contracted by the newspaper to help as an adviser and investigator because he had experience researching New Zealand intelligence agencies. Other than direct dealings with people in New Zealand, he worked on information supplied by Mr Hubbard.

On October 29, Messrs Hubbard and Hager interviewed Mr Kaihau, who confirmed that he had been involved in email correspondence with Mr Sanders. He was unable to supply any other email correspondence because it had been encrypted and he had forgotten the password to decode it.

On October 30, Mr Hubbard went to Hong Kong to meet Mr Sanders and the man who was said to have been the person who actually interfered with the computers. He interviewed Mr Sanders in Hong Kong, where the outlines of the story were discussed and an arrangement was made that Mr Hubbard would be introduced to another man, probably the technician, in China the next day.

At the same time Mr Hubbard was told he had been followed on a plane by a man who was named and described as working for the SIS.

That man was associated with Mr Sanders in the Nauru Embassy, but nothing has shown me that he has been involved in this matter or the SIS.

The next day Mr Hubbard tried to get into China but was turned back as a journalist. He met Mr Sanders in Hong Kong again and was told that the computer technician had to go to Beijing. Mr Hubbard would have to go to Beijing if he wanted to talk to him.

That night Mr Hubbard met Mr Thorns and, he said, spent time negotiating for an interview with the technician. He was told this man was extremely nervous about meeting a journalist and feared that his life would be in danger. On November 2, Mr Hubbard went to Beijing and was introduced to the technician, Steven Buttell. There was a discussion there with Mr Buttell, who was described as polite and affable, with a straightforward manner, who did not seem devious or mendacious and answered most of Mr Hubbard's questions directly.

The questions Mr Buttell was unwilling to answer were about how he had been paid. He had said it was through a government department, but which he would not specify. He repeated that his life could be in danger if his identity was revealed.

There was an arrangement that on the following day they would meet again for a detailed interview, but on that day Mr Hubbard was advised by Mr Sanders that Mr Buttell had been called away for intelligence work in the other country.

Mr Hubbard was introduced to a man with an American accent who was identified as a CIA agent, and confirmed the story that Mr Buttell had been called away. Mr Hubbard was then told that Mr Buttell would not be available for a few days.

He and Mr Sanders went to Shenzhen to meet Mr Buttell there. In that city Mr Thorns told Mr Hubbard that he had heard of a transcript of a conversation between two people, one of whom might have been Tariana Turia MP.

Mr Buttell again did not turn up. He was said by Mr Sanders to have been delayed. In the event no further meeting with him ever took place. Further dealings with him were by email.

After Mr Hubbard returned from China, another visit was made to the iwi organisation with a person described by Mr Hubbard as a computer forensics expert. Mr Hubbard was given invoices which showed Mr Buttell had access to the computer.

A further check on the identity of Mr Buttell was provided by recording his voice in China, with his consent, and playing that to the iwi representatives who agreed it was the man they had deal with.

After November 21, Mr Hager made a check on Mr Buttell through someone he knew who had lived in China and Hong Kong. The result of that was not such as to improve the newspaper's view of Mr Buttell.

Mr Buttell was described as the paper's principal source. I was supplied by Mr Hubbard with a note of a conversation he had with Mr Buttell in Asia on November 3.

Mr Buttell had said he worked as a contractor for the SIS and had a handler whom he talked to only on the phone. He was paid directly into a bank account under a false name.

The SIS had created a "persona" for him, including being a bad credit risk and a pot smoker. He used pot smoking to get in with the Maori he was bugging. He had said the SIS would use those facts to discredit him.

In infiltrating Maori groups, he pretended to be more stupid than he is, as a way of avoiding suspicion.

He said he was born and raised in the area. He wouldn't say how long he had worked for the SIS.

Mr Buttell had told Mr Hubbard his life was at risk if his name was revealed because of intelligence operations he is still involved in.

However, he wanted the details about Operation Leaf to come out. He would feel cleansed if it came out.

He was reminded of the consequences of his actions and of his responsibilities.

He believed that other tribes were bugged beside the two iwi he bugged, but he did not have any proof.

As part of their checking process, working through Mr Hager, the newspaper had a computer expert look at the computer of the iwi of which they had spoken to a representative. They had obtained invoices which showed that Mr Buttell had worked on the iwi's computers when he said he had, but nothing of more significance.

They inquired of the Department of Prime Minister & Cabinet whether anyone had spoken to them of concerns about what was going on, and were told that nothing had been heard there about what was alleged.

They decided to see whether there had been other such activities and asked representatives of other iwi whether they had had experiences which would fit a profile prepared by Mr Hager. That inquiry produced no useful result.

The newspaper report was published on the 21st of November. By that stage the newspaper had some concerns about the reliability of what they had been told and subsequently published that fact.

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