The Telecom leak: Shoot the messenger

Michael Ryan

Michael Ryan, the Budget leaker who rocked the Government to its core, worked in the heart of the Beehive and his identification yesterday spurred two leading public servants to offer their resignations.

The chief executive of the Department of the Prime Minister and Cabinet, Maarten Wevers, for whom Mr Ryan worked as a messenger, and the Secretary to the Cabinet, Diane Morcom, offered their resignations to Prime Minister Helen Clark over the breach of security.

She refused to accept them.

Helen Clark said the two were devastated by the revelation "but I am not prepared to see those careers destroyed by the calculated dishonesty of a low-level employee".

"There can be no suitable explanation or excuse for that.

"It was gross and disgraceful dishonesty and such a person cannot continue in the public service."

A secret Budget paper was given to Telecom two weeks ago detailing how it would be forced to accept greater competition in a bid to get faster broadband services in New Zealand.

Telecom then told the Government it had the document, forcing an early Budget announcement.

On May 5, Telecom gave Mr Ryan's name to the State Services Commission, which was conducting an inquiry into the leak.

He was suspended last week and is about to be sacked.

State Services Commissioner Mark Prebble has referred the report of the inquiry to the police to assess if any crime has been committed.

The report suggests that Mr Ryan was motivated by "some misguided sense of friendship" when he gave the documents to his mate Peter Garty, who works for Telecom as group controller of finance.

In sworn evidence to the inquiry, Mr Ryan said he regretted his actions and did not consider the consequences properly.

"It was because Peter and I were such close friends that I gave the document to him. I would not have done that if we were not close friends. I had given it to Peter for his interest, not to benefit him, me or Telecom.

"I was completely shocked when I read about these matters in the newspaper. I never expected them to surface. I regret very much what I did and realise now how foolish I have been."

Mr Ryan had legitimate access to sensitive material in the course of his job, which was to deliver documents around the Beehive and also to shred them.

The inquiry report shows that the leak was premeditated and that on May 1, the day before, Mr Ryan had seen a Cabinet agenda and told Mr Garty that the telecommunications review was on it.

The document Mr Ryan gave to his friend on the night of May 2 was supposed to have been shredded that day.

Instead he put it in his bag and after a meeting of a cycling group he and Mr Garty attended, handed him the document in a manila folder, telling him not to make a copy of it and that it was for his eyes only to see overnight.

But Mr Garty told the inquiry he had had a few drinks and could not focus so made a copy on his personal photocopier to take a look in the morning.

He took the folder back to Mr Ryan the next morning but when he got to work at Telecom, he decided to seek legal advice within the company.

Management was then brought in.

The report clears Telecom and Mr Garty of any wrongdoing. It is satisfied that the leak was a one-off and that no payment was offered or paid to Mr Ryan by his friend or any other Telecom employee.

It says that in its interview with Mr Garty, he said Mr Ryan indicated he thought Mr Garty might be able to "take care" of his shares with the information, a claim Mr Ryan denies.

Mr Garty holds Telecom shares and options to buy more.

But because Telecom's quarterly report was due out on the Friday of the week in which he was leaked the information, he would - like all Telecom employees - have been barred from trading them during this time.

Mr Ryan was not at home last night and Mr Garty, when contacted, refused to comment.

A Queen's Counsel told the Herald last night that he believed there were a number of provisions under the Crimes Act with which Mr Ryan could potentially be charged. A range of "use of a document" or dishonesty offences could apply.

If police accepted Mr Garty's assertion that Mr Ryan hoped his friend might benefit financially by selling his shares after learning about the broadband deal, there was a prima facie case, the QC said.

Telecom, as well as the Government, might want to lay charges if it believed it was financially disadvantaged by Mr Ryan's actions.

The inquiry into the leak was conducted by the commission's chief legal adviser, David Shanks.

The Beehive will review its security measures for sensitive documents, but Helen Clark said the same system had been in place for many, many years without incident.

Mr Ryan worked for the Government from 1970 to the late 1990s and was then self-employed until returning to the public sector last October to work in the Beehive.

- Additional reporting by Ruth Berry