Claims of corruption, bribery and lies are being made about the Government’s unorthodox scheme of flying sheep to Saudi Arabia and fitting out a private farm with $6 million of kit.
Murray McCully has been at the centre of brokering a deal to assuage the anger - and, he says, prevent a possible lawsuit - of a Saudi businessman whose live sheep exporting business was damaged by this country's ban on such exports back in 2003.
The Government's highly unorthodox
deal involved flying 1000 sheep to the businessman's farm in the Middle East, but also helping set up the unusual - if not, implausible - new farm.
The unfolding scandal is starting to get international attention, with the influential Foreign Policy news website, running the story - see: Justine Drennan's New Zealand Sheep Leaving on a Jet Plane, Don't Know When They'll Be Baaaack Again.
The matter is being vigorously pursued by TVNZ's Heather du Plessis-Allan and her excellent video news reports are important to watch to understand the unfolding controversy. Here they are in order of broadcast: NZ Government gifts $6m to offended Saudi businessman, Thousands of sheep owned by compensated Saudi farmer died on ship, Government 'deleted' sheep export rules to keep Saudi businessman happy, 'They've lost my vote' - taxpayers not happy with Government over Saudi sheep fiasco, Saudi sheep farm cost taxpayers millions more than first thought, and Saudi farm is a 'multi-million dollar bribe' - Winston Peters.
If you want a quick summary, see Danyl Mclauchlan's The Secret Agrihub in the middle of the Arabian Desert. His conclusion: "It sounds a lot like we just gave this guy $11 million dollars, doesn't it?"
For a more comprehensive overview, see Aimee Gulliver's What you need to know about the Government's deal with the Saudi businessman.
Perhaps the strongest views are from Matthew Hooton, who has two columns in the National Business Review (which have just had their paywalls removed). The first column, Gulf games fail to deliver, gives the background to the fallout between the New Zealand Government and Saudi Arabia, with Hooton largely blaming John Key. According to Hooton's story, the Saudi businessman was led to believe that the incoming National Government of 2008 would resume live sheep exports.
Once in power, however, Hooton says that Key changed his mind on hearing that TVNZ would broadcast "a programme critical of live sheep exporting. In a panic, and fearing further criticism from the Green Party's Sue Kedgley, Mr Carter was ordered by Mr Key's media staff to go on TV and rule out any resumption of the trade, ever. This was later confirmed to the Saudis as New Zealand's new position and negotiations ceased. Furious, Mr Al-Khalaf used his influence with the Saudi royal family to ensure the FTA was put on ice".
Hooton's second must-read column, Flying sheep endanger McCully, turns the focus to the Minister of Foreign Affairs, suggesting that his subsequent handling of the mess could lead to his sacking. Hooton suggests the whole deal is "implausible" in terms of the bizarre farming arrangements and partnership that the Government has established.
He doubts that the promised innovative "agrihub" will actually eventuate and "If not, people might start comparing Mr McCully's dealings with Mr Al-Khalaf with those with Mr Roberts 15 years ago. For which Mrs Shipley sacked him". Hooton says "Key's nervous 'yup,' when asked if he had confidence in his foreign minister, betrayed concern over where the story may head".
Hooton also draws attention to the less-than transparent or robust processes undertaken by the Government is generating the contract for the Middle Eastern "agrihub". And this side of the scandal is taken up very well by the NBR's Jamie Ball in his article, McCully handed over $10m for Saudi farm to incentivise FTA.
Using Cabinet papers obtained under the Official Information Act, Ball raises a number of questions about whether proper processes have been followed and hints that, as a consequence, legal action could be taken by other actors in the agribusiness industry. Much of what he has uncovered also appears to confirm that the deal making has been carried out in order to advance negotiations for a trade deal with the Gulf states.
On the Farmers Weekly website, Nigel Stirling provides further detail of negotiations, especially in terms of dealings between Primary Industries Minister Nathan Guy, the Prime Minister, and Khalaf - see: Clarity lacking on trade deal status.
Unsurprisingly, the Opposition parties are now going very hard on this issue, as seen in Nicholas Jones' report, Accusations fly over Saudi farm, with Winston Peters calling the Government's payment a "new low" and a "multimillion-dollar bribe". The Greens are calling the deal "unethical" and Labour says it's "corrupt" - see Radio New Zealand's Government accused of bribery over farm.
Leftwing bloggers are joining in. On The Standard, Greg Presland argues that this embarrassment is just the latest in a long list for Murray McCully - see: Sheepgate.
Blogger No Right Turn disagrees with the claim that the deal is merely "compensation" to the businessman: "there's a name for this sort of activity, of paying people so that you get your policy: its called bribery. And if Khalaf was a public official, rather than just a rich prick who had officials in his pocket, it would be a crime. (No, I don't buy the use of the term "compensation". "Compensation" implies wrongdoing. And we did nothing wrong by banning the trade in misery of live sheep exports. Quite the opposite, in fact. The fact that we're supposedly paying compensation for this simply heaps obscenity on obscenity" - see: Isn't there a name for this?.
Ironically, Parliament has just passed the second reading of the Organised Crime and Anti-Corruption Legislation Bill - see Newswire's Anti-corruption Bill passes second reading. The legislation includes new measures "Making both fines and imprisonment available as sanctions for the offence of foreign bribery".
Finally, to see some of the more interesting and insightful views about the controversy in the twittersphere, see my blog post, Top tweets about the "bribery" and flying sheep scandal.
