Gordon Campbell on Thiel, and the sympatico between Peters and English

Who’s in charge of the ship of state – PM Bill English or Foreign Affairs Minister Murray McCully? Because markedly different messages have been coming from the quarterdeck about New Zealand’s fuzzy response to the Trump travel bans. To recap: Trump issued his infamous Executive Order last Friday and by Saturday, US allies like Canada, the UK and Australia knew that their dual nationals would not be affected by it. New Zealand was left none the wiser. Evidently, no one thought of ringing up Peter Thiel (our billionaire pal and Trump insider) to ask him what the deal was.

Come Tuesday, we were still in the dark and ultimately reliant on the US Embassy in Wellington finally getting around to telling us. (Dual nationals from the seven targeted Middle East nations can travel to the US on their Kiwi passports – assuming that is, New Zealand has dual nationality deals with all the countries affected.)

Meanwhile, Bill English was claiming there that wasn’t a problem, and what’s a few days and everything’s fine – while simultaneously, Murray McCully was carpeting his top official at MFAT and demanding an explanation as to how this unsatisfactory outcome came about, and how can the government be certain this unacceptable situation wouldn’t happen again etc etc. Basically, the MFAT officials were being flogged in private for what the PM was telling the public wasn’t a problem at all.

At the very least, this sorry episode indicates that New Zealand is the raggy-tailed cousin of the Five Eyes intelligence network, and rank outsider among this team of spooks. The US Embassy in Wellington is at one end of Molesworth St and Parliament is at the other. How hard would it have been for the Americans to put us out of our misery before Tuesday? Clearly, our attempt at equally balancing our dealings between our chief trading partner (China) and our chief security partner ( the US) is not winning us friends in Washington’s current climate.

If there is a scapegoat in government circles for the travel ban debacle, it will probably be ambassador Tim Groser. After all, Groser is supposed to be the guy with the contacts in Washington able to clarify such situations, before they turn into embarrassments. Evidently not, this time. McCully is right. MFAT in general and Groser in particular need to learn how to operate in the new atmosphere in Washington.

Draining the swamp

Whoopee. The poverty-stricken residents of Appalachia who have been suffering under the yoke of federal regulation by Big Government have been set free. The Republican-dominated House is about to repeal Obama’s regulations that forbid pollution of waterways adjacent to mining operations.

And when they and their kids get sick as a result of that resumption of pollution, thank goodness they won’t have that oppressive Obamacare programme – or if they’re really lucky, will have reduced access to Medicare and Medicaid – to help them pay for access to treatment. Free at last! Under Trump, the poor can now join the mainstream of the 19th century.

Living In La La Land

The super rich, meanwhile, inhabit a different planet. Stateless Somali refugees may cut no ice with the “humanitarian and other grounds” discretion open to the Minister of Internal Affairs under the Citizenship Act ….

Specialist immigration lawyer Simon Laurent said the “exceptional circumstances” clause that Mr Thiel had been granted citizenship under was very rarely used. Mr Laurent had had little success with it himself – even when representing Somalian refugees who were effectively stateless, he said. “They were refused that on the basis that their situation was not compelling enough to justify the grant of citizenship.”

Billionaires inspire more empathy. Evidently, merely being in the proximity of US billionaire Peter Thiel put stardust in ministerial eyes back in 2011. The 145 page dump of (partially redacted) documents on Thiel’s fast track to New Zealand citizenship demonstrates just how large amounts of money (and rampant credulity on New Zealand’s part) managed to trump common sense. Yes, Thiel donated $1 million to the Christchurch Earthquake Fund. He also put $4 million into Xero, the accountancy software firm in 2010 and circa another $2 million more in 2012. Unsurprisingly, Xero boss Rod Drury has vouched for Thiel’s sterling credentials for citizenship. So did TradeMe founder Sam Morgan. You can read the released documents here.

In reality, all that Thiel has done for New Zealand could have been done via his prior status as a permanent resident. In December 2011, Thiel and the government agreed on terms for the formation of NZVIF- Valar, a $40 million joint venture capital fund in which Thiel invested $15 million, a figure that includes his circa $6 million of Xero share purchases. An excellent critical evaluation of the Thiel buy-in to NZVIF-Valar can be found here:

Among other things, the analysis by business journalist Tom Pullar-Strecker indicates how the structure of Thiel’s “contribution’ to NZVIF-Valar could function as a form of taxpayer subsidy:

Jenny Morel, managing director of Kiwi venture capital company No8 Ventures, said NZVIF was set up “to make sure we had experienced operators here who could grow our markets. You would have to ask how does [the Thiel deal] help the development of a New Zealand venture capital industry and are we, for some reason, subsidising a foreign investor?”

Moreover, when NZVIF was first set up [in 2002] it only provided $1 for every $2 invested by venture capitalists. It has a separate Seed Co-Investment Fund that does provide dollar-for-dollar funding, but that has only been for funds investing in very early stage companies. It has quietly changed the rules and is investing “dollar-for dollar” alongside Thiel in at least one quite mature firm. [Namely, Xero.]

NZVIF has retrospectively provided matching funding for Thiel’s multimillion-dollar investment in Xero, which has been listed on the NZX for nearly five years, on terms that are favourable to Thiel, when there are no possible advantages for the taxpayer. If Xero’s shares shoot up, they will probably only get a low interest rate as a return, but if the shares go down, taxpayers may well carry their full share of that loss.

Meanwhile, Thiel used the privilege of citizenship to buy prime heritage land here without the hassle of requiring prior Overseas Investment Office approval. He has inspired other wealthy Americans to follow his example and also buy up land here, as reported in this column a couple of days ago. On balance, that’s a pretty good deal for Thiel, but not exactly a win/win for this country.

After all, at the forefront of Thiel’s credentials for citizenship are his expertise as an entrepreneur, and his philanthropy. How has history judged the investments that Thiel made here before and since 2011? He invested in Pacific Fibre, which was aiming to provide an alternative fibre optic cable across the Pacific. That firm failed. Thiel did invest in Xero and NZVIF-Valar, but for reasons other than philanthropy. He also invested in a NZ firm called Booktrack Holdings, which has made its money by putting musical soundtracks onto e-book readers. Yet Booktrack Holdings also has a raft of other investors including Sir Stephen Tindall, Sparkbox Ventures and the Singapore-based COENT Ventures. With both Xero and Booktrack Holdings, the Thiel money looks as though it fell into what Bill English would describe as the “nice to have, rather than need to have” category. Thiel’s a star. Government ministers fell for him – hard – and gave him what he wanted. New Zealanders, forced to watch from the sidelines as our prime land are bought up hand over fist by ultra-wealthy Americans, have no reason to indulge this romance.

Election, On

With two post-Cabinet press conferences under his belt, journalists can feel encouraged by PM Bill English. He is showing increasing confidence, but without his predecessor’s gift for handling queries with non-answers. That promises to be an interesting combo during the run-up to the September 23 election. Today, English is delivering his first major speech as PM and will be talking (among other things) about his personal motivations and what drives him as a politician. Overall, I think we got a less manicured and truer picture of Bill English at yesterday’s press conference.

For the first of those revelations, we have Newshub’s Patrick Gower to thank. Gower read out a May 2005 newsletter about Middle Eastern refugees and asylum seekers that English had written, and in which the future PM sounded indistinguishable from Donald Trump. In the newsletter, English had depicted the region’s refugees as “leftovers” from “Middle East terrorist regimes.” Much of the text of the newsletter can be found in this link [the full newsletter is also on Scoop] which included this Trumpian gem:

“New Zealand is now seen as a soft touch for other fascists, terrorists, whoever is on the losing side in bad regimes, unwanted at home and unable to get into any other country,” [English] said…He was discussing the case of Ahmed Zaoui – an Algerian refugee who had been granted asylum, despite being identified as a security risk by the SIS. “If you turn up to the border with an apple, you get done. If you turn up with an Iraqi passport and references from Saddam Hussein, you get in,” wrote Mr English.” We need migrants, but we don’t need leftovers from Middle East terrorist regimes,” he said in the 2005 newsletter. Mr English finished the spiel by saying the green light Labour had sent to the world would “certainly” be turned red by National.

Devastating stuff. Clumsily, English responded yesterday by saying he hadn’t seen the document from which Gower was reading. “You wrote it,” Gower replied. Referring directly to Zaoui, English then said “that character” had been let in, and by implication, wrongfully. “In that case that character got in, and as I understand now lives here. But the border patrol system now would not let that to happen.”

Huh? So, Scoop asked, is he saying that Zaoui was a terrorist who got in when he shouldn’t, or was he saying that he was mistakenly identified as a terrorist and now wouldn’t? English dodged for cover. He advised Scoop to take that up with the previous government and that he didn’t want to discuss the case. “You just did,” Scoop pointed out.

The PM’s version of history could hardly be more wrong-headed, or more hostile to refugees. Which is a genuine worry, given the powers the Prime Minister of New Zealand holds with respect to security intelligence. Zaoui was adjudged (initially and ultimately) to be a genuine asylum seeker – and the allegations concocted by the SIS that he was a terrorist or terrorist sympathiser finally collapsed and were withdrawn back in 2007, nearly ten years ago.

Yet yesterday… English was saying he would deploy this country’s border control system in future to ensure that ‘characters’ such as Zaoui (ie. genuine refugees and asylum seekers) would not even gain entry to New Zealand to make their case for asylum under the UN Refugee Convention. No wonder English gets on well with Malcolm Turnbull. No wonder he hasn’t criticised Trump’s immigration travel ban. No wonder English in 2017 isn’t ruling out working co-operatively with Winston Peters in future.

The Peters link is particularly interesting. That ‘soft touch’ newsletter Gower quoted from was dated May, 2005. Here, from May 8, 2005 is Winston Peters using exactly that same “soft touch” phrase that English used in his newsletter to describe New Zealand’s refugee policy. Also, Peters and English both cited people who turn up at our borders with references from Saddam Hussein. Here’s Peters:

Immigration Minister Paul Swain said the former cabinet minister in Saddam Hussein’s regime would never have been found had it not been for the information I had provided…. [And] the Government [has] sent a clear signal to terrorist and rogue regimes with the Ahmed Zaoui case, highlighting that we are truly a soft touch.

So…quite literally, Bill English and Winston Peters speak the same language on immigration, and on refugees. During the 2002 election campaign, English had also bought wholesale into a “one waka” strategy entirely sympatico with Peters’ views on Treaty issues. Yet we’re supposed to think that English would need to be dragged kicking and screaming into a confidence and supply agreement with Peters, after this year’s election ? C’mon.

All useful background to today’s Bill English Mark II relaunch. Decades ago, the socially conservative mindset that English embodies could be taken as representing bedrock New Zealand values. Some people still wax nostalgic about the good old farm-forged National values that preceded the party’s romance with neo-liberalism. Well, the views that English holds on refugees and on women’s reproductive rights is a salutary reminder of just how dangerously narrow that mindset is in today’s world, and when let anywhere near political power.