David Parker was lobbied by Cabinet colleague Shane Jones about an exemption from the foreign buyers ban for Te Arai development and Jones said he was asked by former Prime Minister Sir John Key to get involved.
The revelations were made today in Parliament as National stepped up questions about the exemption in the Overseas Investment Amendment Bill, which places restrictions on who can buy residential property in New Zealand.
Parker strenuously rejected any suggestion that he had had a conflict of interest in the matter.
And he again said the reason it had been approved by the Cabinet was to avoid creating a new breach of the Treaty of Waitangi by decreasing the value of an asset acquired through a treaty settlement.
Te Arai development involves two iwi, Te Uri o Hau and Ngati Manuhiri, and property developer John Darby of Darby Partners, and two forests at Mangawhai north and south which were commercial redress in the treaty settlements of the iwi in 200 and 2011 respectively.
A 15-year exemption from the act was recommended by the Finance and Expenditure select committee but has since been overruled on procedural grounds by Speaker Trevor Mallard.
Parker, who has responsibility for the Overseas Investment Amendment Bill as Associate Finance Minister, told Parliament he was taking advice as to what legal duty the Government had to do something more.
Jones said he had been approached by Sir John earlier this year to meet with the parties associated with Te Arai – in his capacity as Forestry Minister.
He agreed and had met with the iwi, Mr Darby and US billionaire Ric Kayne, who developed the nearby Tara Iti from land bought from the Mangawhai north forest.
They met at the golf course – where Sir John played golf with former US President Barack Obama this year.
Jones said he had conveyed his concerns about the issue to Parker.
It's been asserted that I may have acted for him in the past. As far as I recall, I have never acted for Mr Darby, but even if I had, that does not give rise to a conflict of interest.
Parker took the issue to Cabinet and gained approval for an exemption, which was contained in the select committee's report on the bill, tabled in Parliament.
Parker, a former lawyer, was asked by National finance spokeswoman Amy Adams if any conflicts of interest declared by any minister when the matter of an exemption was considered by the Cabinet on April 3.
Parker: "No, because there were none. The idea that because I know someone I have a conflict is a nonsense.
"It's been asserted that I'm a friend of Mr Darby's; I'm not. It's been asserted that I'm a business associate; I am not and never have been.
"It's been asserted that I may have acted for him in the past. As far as I recall, I have never acted for Mr Darby, but even if I had, that does not give rise to a conflict of interest.
"I acted for the current Mayor of Queenstown many decades ago. We laugh about it when I see him. That does not give rise to a conflict of interest. "
Parker said National MP and former Treaty Negotiations Minister had Chris Finlayson acted very well for many iwi through the years when he practised law.
"That did not mean to say that he could not deal with iwi as Minister for Treaty of Waitangi Negotiations.
"These assertions are defamatory, untrue. I had no conflict of interest, and knowing someone does not give rise to one. I have no fiduciary duty owed to anyone else, and I've acted appropriately throughout."
Adams also asked Parker if iwi assets should be protected from the loss of value that came with his law change, "but that no other New Zealand landowner is entitled to have that same consideration from this Government."
Parker's answer cited Article one of the Treaty of Waitangi, the right of the Government to pass laws affecting all land in New Zealand including land passed to Maori under treaty settlements.
"As against that proposition, it is also possible for the Government, by doing that, to create a new treaty breach if they substantially decrease the value of a compensatory asset that passes to Māoridom, pursuant to a treaty issue.
"Really, to balance those two issues, you seek to do fairness to the iwi who are complaining of that diminution of value.
"It is a moot point as to where you cross that line. The Government thought that the appropriate way through, in this case, was to have a transitional, not permanent, exemption for the benefit of the land, which cured the issue."
Adams told the Herald later that the involvement of Sir John Key in the issue made no difference to National's objections.
"The issues here are why this Government and this minister chose to recommend why one developer out of a raft of developers who are affected by this legislation and have complained about it should be exempt."