Industry escapes bloodbath

Ex-Kiwi Milk Products CEO Paul Marra and five others pleaded guilty to lesser charges in the so-called Powdergate case. Picture / Dean Purcell

The alleged ringleader in the so-called Powdergate conspiracy says the dairy industry should be grateful he and five others pleaded guilty to reduced charges, thus avoiding a lengthy conspiracy trial.

"If we had gone through the court case it would have been the biggest blood-letting the dairy industry has been through," former Kiwi Milk Products chief executive Paul Marra said yesterday.

Meanwhile, the Serious Fraud Office defended reducing the charges against the men, rejecting a defence suggestion that it was because the SFO realised it could not substantiate the allegations it was making.

Marra and five other defendants pleaded guilty last week to six representative Customs and Excise Act charges relating to illegal export of over $3.2 million of dairy products.

All received fines at sentencing on Thursday. They had originally faced the more serious charges of conspiracy, with the SFO then alleging illegal exports worth nearly $45 million.

The six had had the investigation and charges hanging over them since 2001. Marra's counsel, Paul Davison, QC, said at sentencing the six harboured a sense of injustice and Justice Rodney Harrison said he was left with the uncomfortable feeling others involved in similar schemes may have escaped prosecution.

Marra, who had been tipped for a top job at Fonterra, said the whole experience had been difficult for him and his family.

"It's been a long period of ... not being able to plan anything," he said.

Some in the dairy industry had been "vindictive" towards him and "interrupted my life where they've been able to and continue to do so".

The vindictiveness included gossip and trying to prevent him from gaining employment.

He had now started an Auckland-based food sector consultancy. "I have a few key clients in New Zealand and I have some key clients offshore."

Marra believed the SFO agreed to lesser charges because its case was "flawed".

He did not want to comment on whether he was actually guilty of the charges he admitted to but said of the pleas: "It was a means to end this whole debacle and quite frankly the wider dairy industry needs to be appreciative of that."

Having the conspiracy charge go to trial would have led to a big industry "blood-letting".

Meanwhile, SFO assistant director Gus Andre Wiltens said he found it "grating" the defence suggested his office had reduced the charges because it realised it could not substantiate conspiracy.

He said the pleas to lesser charges had been defence counsel's suggestion, as the prosecution was not allowed to initiate such contacts.

But Andre Wiltens admitted the SFO opted for the certainty of guilty pleas to lesser charges because of the prospect of a hung jury with so many defenders pushing the same line.

"We don't resile from the fact that our charges were valid and good. We were confident that we could prove them. But with a jury it's always a lottery," Andre Wiltens said.

And the basis for prosecuting the men on the lesser charges had not changed. "It's still dishonest conduct by corporate businessmen."

Andre Wiltens noted the decision to press lesser charges would save the expense of a 10-week trial, but said cost would not have prevented the conspiracy trial going ahead.

Davison acknowledged other defence counsel had initiated contact with the SFO on the charges and the office had subsequently indicated to him and others that the office was willing to consider changing them.

"The only reason they would do that is because they were of a view that their case wouldn't succeed."

A seventh defendant, Sean Miller, who has pleaded not guilty to the reduced charges will appear in court again.