David
PARKER
Trade and Export Growth Spokesperson
12 August 2015 MEDIA STATEMENT
Did Murray McCully break Public Finance Act?
Murray McCully appears to have breached the Public Finance Act by dressing up the cash payment paid to Al Khalaf as a
joint venture, new documents show, Labour’s Trade and Export Growth spokesperson David Parker says.
“In a briefing to Murray McCully on 19 April 2012, MFAT officials said they would find a way to meet Al Khalaf’s
previously stated desire for compensation ‘possibly through the joint venture’. They did this after Mr McCully had
earlier insisted the $4 million payment not be called compensation because that would cause “a plethora of layers and
bureaucrats” to become involved.
“In a sign of how ridiculous the subterfuge was they even put the word “compensation” in quote marks. The $4 million
payment was then turned into a joint venture contract for services with Al Khalaf Group, with no mention of compensation
and the pretence it was for intellectual property and services.
“There were no grounds for any compensation in the first place, because Al Khalaf had no legal claim against New
Zealand. This was a facilitation payment to pay off a Saudi businessman getting in the way of the Gulf FTA.
“It seems at least some of those involved knew this was an illegitimate ‘compensation’ payment, but Mr McCully insisted
it be called a joint venture so he could get around ‘bureaucrats and lawyers’ and avoid the law.
“Treasury said a compensation payment would require a new appropriation under the Public Finance Act. Mr McCully’s
duplicity in dressing up the compensation as a joint venture deceived the Treasury and could well be a breach of the
Act.
“This stinks,” David Parker says.
The new Documents are attached.