KEY POINTS:
How can Labour appoint its financial sugar daddy as honorary consul to Monaco when it has previously consistently refused to appoint a New Zealand representative, despite personal representations from Prince Albert himself?
Letters obtained by the Herald on Sunday show that Labour has repeatedly turned down requests from Monaco's honorary consul in New Zealand for a reciprocal appointment in the principality.
Even Foreign Affairs Minister Winston Peters did not agree when approached in January last year to consider the matter.
So what has changed in the intervening 12 months?
National MP Richard Worth, who is Monaco's representative here, has pressed the Government for several years to appoint a consul.
Former Foreign Affairs Minister Phil Goff repeatedly said such an appointment did not fit with New Zealand's priorities in the world.
But the Government is now reassessing this stance after discussions between Prime Minister Helen Clark and Labour Party president Mike Williams on the potential appointment of major party donor Owen Glenn to the role.
Glenn's appointment as an Officer of the Order of Merit in the New Year's honours caused controversy. Although Glenn got his gong on the basis of the $7.5 million donation he made to the University of Auckland's new business school, he had also donated $500,000 to support Labour's election campaign.
In an interview in Auckland last week, Glenn said he was waiting to be confirmed as New Zealand's Honorary Consul in Monaco - "when Peters gets off his arse". The two had discussed the issue over breakfast.
Glenn has not said whether he donated cash to NZ First, Peters' party. Peters has said he didn't.
The whole issue is now a major embarrassment for the Government.
Worth is adamant that a diplomatic appointment in Monaco is justified. "There is a strong case to do so," he says. "But the Government has taken a contrary view and has point blank refused to do so."
But he says irrespective of whether the Government now swings around and backs Glenn, it is not a fait accompli. "Mr Glenn has to realise that he needs sign-off for his aspirations both from New Zealand as the sending country and Monaco as the receiving country.
"Both countries derive significant benefits from consular appointments if the appointee has strong social and business networks in the receiving country. Glenn is very much a new arrival in the principality."
Worth was attacked by Government ministers in Parliament last week over his long campaign to get Frank Repetto - an Italian businessman married to a New Zealander who has long been resident in Monaco - appointed to the role. The Cabinet ministers slated Worth's own self-interest in the matter.
Monaco is Europe's plushest tax haven. It's the home of the Monaco Grand Prix, the Monte-Carlo casino, yacht shows, gold-diggers and Eurotrash as well as the wonderfully well-heeled. The principality is covered in CCTV.
Glenn's fortune is estimated at $1.1 billion on National Business Review's Rich List (2005).
His freight-forwarding company OTS Logistics reported a turnover of US$595 million ($758m) last year.
Worth actually helped Glenn get his residency in Monaco by organising introductions to the right people a couple of years back.
The problem is that Glenn will have to spend at least six months living there each year to retain his tax status (and residency) and there is some doubt whether he really fits the criteria.
Glenn wasn't making himself available for detailed discussions about his affairs.
Worth believes closer ties with the principality would give New Zealand significant commercial advantages.
It a letter to New Zealand's then Ambassador to France, Adrian Macey, in August 2003, he pointed to the significant support extended "from the principality" for Team New Zealand's challenge to the America's Cup in Valencia.
The principality had also been prepared to provide financial support to the Antarctic Heritage Trust.
Worth wanted to ensure New Zealand was represented at events such as the Monte-Carlo World Music Awards, the Monte-Carlo television show, Monaco Yacht Show, International Antique, Jewellery and Art show and the Entrepreneur of the Year Awards.
"I need some local entrepreneurial support in Monaco (which is really outside the functions of Government)," he said. "Mr Repetto could determinedly and willingly provide such help."
Macey investigated whether there was a case for a Monaco appointment during a visit to the principality in September 2003.
Worth interpreted Macey's subsequent report as suggesting that there might be a pragmatic reason to make such an appointment under a new policy on honorary consults providing for three-year appointments.
But on June 29, 2004, Goff wrote to Worth stating he had had another look at appointing Repetto and official advice was that there was "no proven need" for an honorary consul in Monaco. In particular, he said:
The intensity, extent and potential of our relationship with Monaco did not appear to justify an appointment. Our relations with Monaco were warm and friendly, but in terms of the overall conduct of our international relationship, other priorities loomed larger. There was no demand for consular assistance to New Zealand citizens which could not be met by the embassy in Paris. Demand for other services, particularly trade-related services could also be met out of the embassy in Paris or by the investment counsellor based in London.
Repetto had been prepared to do the job for free but Goff did not believe it was good business practice to establish a contractual relationship on that basis.
"It will be clear from these points that I do not propose an Honorary Consult to Monaco," he wrote.
"This is no reflection on Mr Repetto or the Monaqesque authorities, it is based on a hard-headed assessment of relative priorities that is inevitable in the modern world."
The rumour mill is rife that Peters and Glenn are to have a meeting offshore to discuss the furore.
Peters has said he will make no comment on the issue until he returns to Wellington. It should make for an interesting return.
