Saudi sheep scandal resurfaces
A deal that the foreign minister struck with a Saudi businessman, which is being investigated by the Auditor-General, is back in the spotlight after the two recently met in the Middle East.
Murray McCully has been embroiled in controversy for more than a year over the Government spending $11.5 million on establishing a sheep farm in Saudi Arabia in partnership with businessman Hamood Al Khalaf.
Treasury documents released under the Official Information Act reveal McCully met Al Khalaf in Riyadh in April.
A spokesman for McCully’s office said there was no scheduled meeting between the pair, but ‘‘the two spoke briefly at a reception and Mr Al Khalaf commented positively on the progress of the food security partnership’’.
That’s the same partnership that Auditor-General Lyn Provost said in August last year that she would be investigating.
McCully was in the Middle East as part of a trip to advance a free trade agreement with the Gulf.
The deal with Al Khalaf, which included $4m to secure him to run the ‘‘agri-hub’’, was said to be offered to appease him and get a trade agreement across the line.
Al Khalaf was said to be unhappy with New Zealand’s ban on live sheep exports, which had a negative effect on trade talks, leading to McCully’s claims that the agri-hub was to help avoid legal action over the ban.
But the papers show Treasury didn’t interpret the agri-hub as a way to avoid legal action and didn’t support it. They include an email from senior analyst Becky Prebble in June last year, seeking clarification as to why Treasury didn’t support the Saudi deal.
‘‘When we said we didn’t support the proposal as it went through Cabinet, am I right in saying that it was just because we didn’t have enough information about it? As opposed to, say, because we don’t think we should be paying people not to continue with legal proceedings?’’
An unnamed official said she had been ‘‘trawling through the information’’ and ‘‘at no time did any of our briefings refer to it being about pre-empting legal proceedings’’.
Those comments are contrary to what both McCully and Prime Minister John Key have said.