In all the unexpected twists and turns in the ACC scandal, the one direction National are desperate for it not to go is up, straight to the top. Last night on TVNZ's Close Up, however, that's exactly where it headed with John Key being identified as one of Bronwyn Pullar's support and advisory group (view New twist in ACC saga; or read TVNZ's Prime Minister's name on Pullar support letter).

The link is somewhat indirect and Key doesn't appear to have done anything illegal or breached any official rules, but it will provide Labour with fresh ammunition for a few days. Headlines like this: Key implicated in ACC scandal will associate the Prime Minister's name directly with the scandal. While not a killer blow, the cumulative effect on public perception is undoubtedly corrosive.

On Close Up last night I argued that the scandal provides a fascinating window to how the political elite can use powerful friends and their influence for personal gain. I've elaborated on this in a blog post: ACC scandal analysis.

With daily leaks appearing there will be urgent attempts at the top of the National Party to stem the flow and stop the internal attacks. Cameron Slater doesn't appear to have received the memo yet - see: Michelle Boag is a lying, poisonous scumbag.


Former National Prime Minster Jenny Shipley - also named along with Key as an advisor to Pullar - has been reported as saying she 'did not want to get drawn into it', no doubt summing up everyone's feelings at this point.

Boag herself has been on Newstalk ZB trying down to minimize the latest leaked letter's implications, putting it down to name dropping (listen here), something which Pullar herself confirms - see: No offer of help from Key - Pullar.

The other development yesterday was Judith Collins' threat of defamation action against Labour MPs Trevor Mallard and Andrew Little and Radio New Zealand. Collins gave the MPs until 5pm yesterday to back down. As Danyl Mclauchlan at the Dim Post points out, the threat is likely to have more of a political than legal purpose, and was designed to intimidate the opposition and convert the issue into a standard Opposition vs Government spat, rather than a bitter, internal fight - see: Political theatre watch, best defense is a good offense edition.

Labour have called her bluff however, and even upped the ante in Parliament yesterday, directly linking rightwing blogger Cameron Slater to the leak.

Scott Yorke thinks Collins' move is very risky, particularly if the minister nicknamed 'Crusher' is seen to back down or if she loses the case - see: Collins Lawsuit: What On Earth Is She Thinking?.

It's hard to imagine that the lesson taken by National from the teapot tapes saga is that it's a good idea to mount legal attacks on the media, but that seems to be the path Collins is intent on taking. No Right Turn points out that there is one immediate advantage to the minister - the defamation action, along with the Privacy Commissioner's inquiry, gives her an excuse not to have to answer any questions in Parliament - see: The Collins defamation suit. For more on this, see also: Andrew Geddis' blogpost, It's not a lie if you believe it is true and David Farrar's National's Quartus Horribilis.

Avoiding the issue is not going to help the Government if the scandal rolls on with Collins repeatedly refusing to answer questions in the House day-after-day accompanied by loud jeering from the Opposition benches. Also a bad look is the public having to pick up Collin's legal bills in what is clearly a very political action - Taxpayer likely to get Collins lawsuit bill.

Speculation continues as to the motives behind the key players - particular Boag and Collins. The Standard looks at how it may affect Collins' leadership aspirations (see: Collins' dilemma & lameduck Key), while Cameron Slater looks at Boag's allies in the National Party caucus - see: Who is Boag's 'faction'?.

Meanwhile, Tahu Potiki says that We lose in Nick Smith's resignation, lamenting both the downfall of Smith and the new scandal and accountability politics in which there are so many ministerial casualties.

Boag is not the only National Party figure currently in the headlines for all the wrong reasons. Former National Justice minister Sir Douglas Graham has finally been sentenced and is facing calls for further sanctions - see: Lombard fallout: Graham urged to give up Sir. Nor is Labour unscathed as former Labour Justice minister, Bill Jeffries, was also convicted and sentenced.

Allegations and questions over 'conflicts of interest' are the order of the day. Amelia Romanos' NZ on Air comes under fire reports on the grilling NZ on Air faced in a select committee about Stephen McElrea, NZ on Air board member and John Key's electorate chairperson. And conflicts of interest are a problem in the media as well, and John Drinnan's Hosking silent on SkyCity looks at journalists moonlighting with the controversial casino.

Vernon Small (see: Government needs to take note of warning on its cost-cutting) has a good summary and analysis of the problems the Government is currently experiencing with its public sector reforms.

Today's Herald editorial discusses the wealth disparity in New Zealand and suggests the best answer for dealing with burgeoning CEO salaries is to keep their details in the public eye - see: Salary should reflect worth, not position.

The Listener has published a very interesting interview by Guyon Espiner of Rodney Hide. Also, Ruth Laugesen has an in-depth interview with new Treasury boss Gabriel Makhlouf, in which Makhlouf is probed on his orientation towards economic inequality in New Zealand, but manages to dodge the issue. Makhlouf's call last week for class sizes to be increased to free up resources for teacher performance pay has also been attacked by Professor John O'Neill from Massey University's College of Education. O'Neill points out that New Zealand ranks fourth in the OECD in reading and science and sixth in maths, spends less than the OECD average and actually already has higher than average classs sizes for almost all ages - see: Treasury's class size comments refuted by expert.

Finally, ex-Alliance cabinet minister Laila Harre is reported to have joined the Green Party as a 'political adviser'. This normally means being a taxpayer-funded spindoctor, strategist and party-builder - see: Laila Harre signs up with the Greens.