Green Party: John Key should have come clean on his lawyer and foreign trusts

James Shaw has accused John Key of not telling the whole story. Photo / Mark Mitchell

The Green Party says Prime Minister John Key should have revealed that his own lawyer had lobbied the Government on foreign trusts.

Speaking to reporters on April 13, Mr Key said that he had previously been approached by someone in the foreign trusts industry who was concerned that the rules for trusts were about to be tightened.

Documents released to the Green Party, and published yesterday in the Herald, showed that it was Mr Key's lawyer, Ken Whitney, who had raised the issue with him in December 2014.

Green Party co-leader James Shaw said Mr Key had not told the whole story.

"The Prime Minister withheld a very significant piece of information. The person who spoke to him and went on to lobby the Revenue Minister to save the foreign trusts industry was his own personal lawyer, a man that he has worked with for 20 years and continues to work with."

Mr Key referred Mr Whitney - whose company Antipodes Trust specialises in foreign trusts - to the Revenue Minister at the time, Todd McClay.

In a letter released to the Green Party, Mr Whitney told Mr McClay that he had received an assurance from the Prime Minister that the rules for foreign trusts would not be tightened.

Mr Whitney had been concerned about moves by the Inland Revenue Department (IRD) to strengthen the disclosure rules for foreign trusts - which the IRD said was necessary to preserve New Zealand's international reputation.

Mr McClay met with Mr Whitney and associates from the foreign trust industry in Auckland two weeks later.

The minister later told the IRD that changing the rules around foreign trusts was not a Government priority.

Mr Shaw said: "The fact is, the IRD had serious concerns about foreign trusts adding to a perception of New Zealand as a tax haven, but the IRD's work on these concerns was shut down weeks after the industry started lobbying."

The Prime Minister's office has said after referring Mr Whitney to the minister, Mr Key not was involved in any subsequent discussion about reviewing the foreign trusts industry.

New Zealand's foreign trusts regime was put in the spotlight following the release of the Panama Papers, which revealed the ways that wealthy investors hid their money in secretive trusts around the world.

In response, the Government launched an inquiry into the disclosure regime for foreign trusts, led by tax specialist John Shewan.

Labour's finance spokesman Grant Robertson today said that a broader, more independent inquiry was now required.

"It is quite clear that John Key's links to this industry are strong, despite his previous denials," he said.