Fran O'Sullivan: The rot needs to be stopped - and quickly

One by one, Labour's bright shining hopes - the MPs carefully selected to put a business-friendly face on a party long seen as dominated by teachers and unionists - are crashing.

Yesterday, David Parker, who just last week was being praised by Labour Party president Mike Williams as "one for the future", a person he had personally hand-picked for his impeccable business credentials, resigned his remaining Cabinet portfolios.

Williams had put Parker on a pedestal and will feel his downfall as a body blow, coming so soon after the controversy surrounding David Benson-Pope.

Former minister John Tamihere, who lost his Cabinet role after he was verbally incontinent about his colleagues to Investigate magazine, survived a Serious Fraud Office investigation into his own dealings with the Waipareira Trust.

Parker and Tamihere - like Shane Jones, who chairs Parliament's influential finance and expenditure committee - were seen as politicians who would, in time, front the major commercial portfolios in the Clark regime.

Now David Cunliffe is the sole "new generation" Labour MP left in the Cabinet who comes with a strong business pedigree.

It's the old stagers - such as Trade Negotiations Minister Jim Sutton, whom Clark tried but failed to drive from her Cabinet - who survive to keep the business links going.

There is a prima facie case against Parker under section 377 of the Companies Act for filing false company returns into 2005, three years after he first entered Parliament.

The Companies Office is reportedly "reviewing the files" and checking its insolvency records following Investigate magazine's exposure of Parker's decision to "unanimously" sign off returns from property development company Queen Park Mews despite not having obtained agreement from another shareholder, Russell Hyslop.

The investigation will try to pinpoint whether Parker simply committed a "technical oversight" or whether there is a serious issue to answer.

Parker faces a double jeopardy, as he was also a successful lawyer before entering Parliament and perhaps could be expected to have a higher standard of commercial behaviour than the mums and dads who frequently cut corners to avoid compliance costs.

But even before its investigation got under way, the Companies Office was down-playing the affair. Spokesman Adam Feeley suggested that prosecutions by the office, including those for filing matters, were rare. But his statements are singularly inappropriate.

They underline the growing suspicions that when allegations of potentially criminal behaviour are raised against a senior Labour Party person, a Government investigating body will not be far behind with its whitewash brush.

Last week, the police failed spectacularly to lay charges against the Labour Party over alleged election campaign law breaches despite their finding that a prima facie case "technically" existed.

Acting Deputy Commissioner Roger Carson said there was not enough evidence to take the case to court as the police had been unable to pin down individual responsibility.

With all due respect to Carson - who is among a number of senior police officials whose position in the department's hierarchy will be settled when the Government gets around to announcing a replacement for former commissioner Rob Robinson - such technical niceties have not particularly worried prosecuting bodies in the past who have laid charges against ordinary mortals in less-than-perfect circumstances.

Have a look at the Serious Fraud Office with its failed helicopter trust case and the huge cast of candidates arraigned (some successfully) in the Equiticorp fraud case.

How long will it be before any business person - who does get the book thrown at him - tries to argue in court that the Crown's prosecutors are acting unfairly by laying charges against him that they would not dare lay against a member of Clark's Government for similar transgressions?

Carson passed the buck in Labour's case by saying the police were also not taking action against National over claims that it, too, had broken the electoral spending limits.

But surely the Electoral Commission would not have referred these issues to the police if it had believed the investigators could not get to the bottom of the decision-making trail over what Labour's opponents felt to be potentially corrupt practice?

Surely it's not up to police to apply a political cancel-out factor, which would be denied to ordinary mortals being investigated for such practices.

National Party leader Don Brash is right to question whether Labour's power is now so great that it has acquired a political protection blanket (my words) where its own players are involved.

Certainly, the police have not shied away from laying charges against National MPs over what seems in comparison to be relatively minor transgressions.

Parker is well-known on the Dunedin business scene as a member of that southern city's shining biotech community. He did not enjoy star status like the late Howard Paterson. But his company, BLIS Technologies, was a successful start-up. He remains a director and indirect shareholder of Fund Managers Holdings.

There are warning signs from this affair that Labour would do well to heed.

Take Jones, who is seen by some as a future Maori Prime Minister.

He faced down a political furore late last year when National raised concerns over his intention to stay on as chairman of Te Ohu Kaimoana (the former Maori Fisheries Commission) after entering Parliament as a high-flying list MP.

Clark sent Jones an oblique message saying she was not happy that Maoridom's new political star could double-dip by holding on to his $70,000-a-year fisheries chairman job at the same time as he picked up an MP's salary.

It was ultimately agreed that Jones would stay on for an undefined transition period to ensure assets were bedded down appropriately.

Last month, Jones signalled that period would be stretched out until next February when he would step down as the Government-appointed chairman at the organisation's AGM.

Yesterday, chief executive Peter Douglas said there was basically no one else at board level to help him manage the transition. This is nonsense.

"The small fish from Ranganunu [might] swim in his own current," as Jones advertises on Te Ohu Kaimoana's website.

But as chairman of Parliament's most powerful committee, how can he tackle others over their alleged conflicts of interest when he ignores his own.

Instead of going on a "boondoggle" to the Cook Islands this month to teach that Government about governance and probity, he would have been better advised to spend time lining up his successor fast.

Just as with Tamihere before him, and now Parker, the Prime Minister needs to send clear signals over where the boundaries lie.

Otherwise, this Government's growing reputation for political sleaze will worsen.

* Fran O'Sullivan's trade policy column will run next week.