It is 2008. A victorious John Key finds he’s inherited from the Clark government the vexing problem of a well-connected Saudi called Sheikh Hmood Al Ali Al Khalaf who seems utterly enraged that New Zealand has curtailed (for humanitarian reasons!) the live sheep trade that he’d invested in, and which had been shaping up as a good little earner for him. What to do? Thank goodness that someone in Cabinet has put their hand up. Hmmm. The solution on offer seems to be a black ops exercise run by Murray McCully, without most of his Cabinet colleagues or the public having the foggiest idea about what he might be up to. What could possibly go wrong?
Well, as Auditor-General Lynn Provost has just found in her long-awaited report into the Saudi sheep deal: plenty.
True, she found no evidence of bribery or corruption – and to be fair to McCully, there doesn’t seem to be any evidence in Provost’s report of copyright infringement or grand theft auto, either. What there does seem to be is evidence of what the A-G delicately calls “unacceptable” behaviours –whereby for instance, the process of placating this particular Saudi (while plumping up the cushions for a free trade deal with the Saudi kingdom in general) was deliberately disguised as a contract for services rendered. Here’s a sampling of McCully’s shortcomings in briefing Cabinet about his gambit :
The Minister of Foreign Affairs put a paper to Cabinet outlining the proposed arrangement with the Al Khalaf Group in February 2013…… I found some significant shortcomings in the Cabinet paper, including that it:
• did not clearly explain that the Al Khalaf Group would own the goods and services costing the New Zealand Government $6 million;
• did not identify how the $10 million figure was arrived at (a figure that has since risen to $11.5 million);
• signalled the risk of a claim against the Government based only on the $20-$30 million figure that the Cabinet paper said was suggested by the Al Khalaf Group (there was no assessment by Ministry officials of the substance of that legal risk);
• did not include any analysis about whether there were any other potential obstacles to the signing or ratification of the free trade agreement, apart from the concerns of the Al Khalaf Group about the export of live sheep or the assertion by the Gulf Cooperation Council that this was the only obstacle to the free trade agreement; and
• identified that New Zealand exports could double to $3 billion in five years if a free trade agreement was signed with the Gulf Cooperation Council, without including any analysis.
Based on these significant shortcomings, I am concerned at the lack of robust analysis and the quality of information that was provided to Cabinet on this matter.
Clearly, no blame to the Minister for gaining Cabinet approval on dubious terms, nothing to see, lets move on. As we now know, the Saudi sheikh got a sizeable cash payment and a “model” sheep farm gifted to him by the New Zealand taxpayer, and the sheep involved promptly died in the desert. (So our humanitarian-motivated ban on live sheep exports turned out well, didn’t it?)
In her report, Provost makes a distinction between this payoff for “services” (not good, not well flagged, but legal) and a “bribe “(bad) or a “facilitation” payment (also bad) whereby money changes hands to get quicker access to a nominated service. In this case, the relatively diffuse goal was a free trade deal, which apparently – if you’re a Jesuit used to making these sort of fine distinctions – did not quite put McCully’s gambit into the category of being a bribe, or a facilitation payment. Ultimately then…has the noble end (a free trade deal with Riyadh!) justified the goofy, costly and somewhat dodgy means that were deployed? Well, Provost has asked the Ministry of Foreign Affairs to provide a totting up of the current state of the cost/benefit ratio, over the next few months.
For now though….McCully appears to have survived another round of mishaps, mismanagement and shoddy practices. Once again it will be his officials who will have to (somehow) rationalize what has been made/allowed to happen on his watch. There is now quite a roster of such events, stretching back to the Tourism Board scandal of the late 1990s and including – more recently – the bungled reforms at MFAT, the Malaysian diplomat immunity scandal, and now this. Clearly, any problem where the answer is ‘Better Call Murray’ is never going to be anxiety free, is likely to end badly, and will probably inflict collateral damage among any officials caught standing too close to this Minister when the explosion eventually, inevitably, happens.
If I can mix my TV and film analogies, MFAT under McCully is less like Better Call Saul and probably more akin to The Hurt Locker…in that the Ministry seems to have become a place where bombs (many of the Minister’s making) are always going to be in need of being defused, in conditions where only the MFAT officials caught in the immediate blast area will suffer any career harm.
And here’s Nat Cole, with what could be this Minister’s theme song…in that there’s always going to be room to blame someone else, or something else, for landing him in another fine mess.
Which segues fairly well into this compendium of ordinary life at MFAT….with subtitles, too.