Wednesday, November 02, 2016

McCully lied to Cabinet

The Auditor-General has released their report into Murray McCully's sordid Saudi sheep bribe. While they find it was not a bribe in the tightly criminal sense of whether Murray McCully is liable for prosecution under the Crimes Act (of course he's not - he was the briber, not the recipient), they're very clear that it was a payoff to Hmood Al Ali Al Khalaf to achieve a diplomatic objective (i.e. a bribe in the ordinary sense of the word). They criticise the contract under which the money was paid for deliberately obfuscating this objective and hiding the fact that it was first and foremost about resolving a diplomatic dispute. But most importantly, they find that Murray McCully basicly lied to Cabinet in his papers promoting the deal:

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.

Cabinet approved the money based on these obfuscations by McCully. The Auditor-General deliberately refuses to comment on the quality of Cabinet's decision, but any flaws in it can only be the fault of the poor information supplied by McCully. More importantly, Cabinet Ministers owe their colleagues a duty of candour in Cabinet discussions. McCully has violated that duty. He should resign as a result.

Finally, the Auditor-General criticises the government for its secrecy on this issue. The public are owed transparency on what the government is doing with our money and what (if anything) has been achieved. They failed on this front as well - primarily due to the efforts of McCully to hide the fact that he had given poor advice and effectively bribed a foreign government. That's not acceptable either, and something he should be held accountable for.