McCully and the Saudi sheep deal


TALK­ING POL­I­TICS: There are al­ways Min­is­ters – Nick Smith, Hekia Parata and Mur­ray McCully in this cur­rent govern­ment, Lianne Dalziel in the pre­vi­ous one – who, for what­ever rea­son, seem to be more dis­as­ter­prone than the rest of the team.

Last week, McCully was once again in the dog­box.

The ori­gins of this lat­est cri­sis date back to Na­tional’s elec­tion vic­tory in 2008, or even ear­lier. Prime Min­is­ter John Key had in­her­ited from the Clark govern­ment the vex­ing prob­lem of a well-con­nected Saudi sheikh.

The sheikh had be­come an­noyed New Zealand had - for hu­man­i­tar­ian rea­sons - stopped the live sheep trade he’d in­vested in, and which had been shap­ing up as a good lit­tle earner for him. What to do?

Un­for­tu­nately, the so­lu­tion came to in­volve a vir­tual black ops ex­er­cise run by McCully, with­out many of his Cabi­net col­leagues hav­ing much idea about what he had in train. What could pos­si­bly go wrong?

Well, as Au­di­tor-Gen­eral Lynn Provost has found in her re­port into the Saudi sheep deal - plenty. There were am­ple signs of ‘‘un­ac­cept­able’’ be­hav­iours – whereby the process of pla­cat­ing the Saudi sheikh be­came dis­guised as a con­tract for ser­vices ren­dered.

Provost found ‘‘sig­nif­i­cant short­com­ings’’ in McCully’s brief­ing paper to Cabi­net about his plans. Re­port­edly, Cabi­net wasn’t told the sheikh’s firm would end up own­ing the ini­tial $6 mil­lion pack­age of our goods and ser­vices.

Nor was it given many de­tails on how the deal’s $11.5 mil­lion over­all cost was reached. The claim that the deal was nec­es­sary to avert an al­leged $20-30 mil­lion le­gal ac­tion by the sheikh was never sub­stan­ti­ated.

The deal with the sheikh was sup­posed to fa­cil­i­tate a free trade pact be­tween this coun­try and Saudi Ara­bia, but with­out any con­sid­er­a­tion of whether other ob­sta­cles might ex­ist. Fi­nally, our ex­ports to the Saudis would al­legedly double to $3 bil­lion, but with­out any sup­port­ive anal­y­sis pro­vided for that claim, ei­ther.

As we now know, the Saudi sheikh re­ceived a multi-mil­lion dol­lar pay­ment and a ‘‘model’’ sheep farm gifted to him by the New Zealand tax­payer, and the sheep in­volved promptly died in the desert.

Ul­ti­mately, has the no­ble end - a trade deal some­time, maybe - jus­ti­fied the means used? Well, Provost has now asked the Min­istry of For­eign Af­fairs to tot up the Saudi deal’s costs and ben­e­fits.

McCully ap­pears to have sur­vived this lat­est ad­ven­ture. His of­fi­cials have been asked to pro­vide a ra­tio­nale for what has hap­pened on his watch..

Clearly, any prob­lem where the so­lu­tion is ‘Bet­ter Call Mur­ray’ seems per­ilous, and could well in­flict col­lat­eral ca­reer dam­age on any of­fi­cials stand­ing too close to this Min­is­ter when the ex­plo­sion even­tu­ally, inevitably, oc­curs.

New Zealand For­eign Min­is­ter Mur­ray McCully.

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