Why has the Tranz Rail shares story faded so quickly when the New Zealand First donation scandal went on for months?
It’s interesting to compare the political and media reactions to the story of John Key’s Tranz Rail shares. As we noted earlier this week, the stories boil down to a remarkably similar point—MPs who failed to declare financial interests, putting them at risk of corruption allegations. While there’s no evidence either was corrupted, perception is almost as important as the reality when it comes to protecting the integrity of our democracy, so the judgment in both cases is poor, to say the least. Even the Herald’s editorial yesterday says frankly that Key “most certainly should not have been holding any” Tranz Rail shares while he was associate transport spokesman for National.
So why has Peters been skewered for weeks, while the Key story seems to be fading after just a few days?
Key handled the issue more effectively, making share records public on Tuesday and admitting a mistake, shutting down media speculation within 24 hours. Peters, by refusing to answer questions for months, allowed such speculation to drip on and on.
Second, reporters had the Register of Pecuniary Interests to hang their Winston Peters story on. Section 7 (d) of the Pecuniary Interests rule says that since 2005 every return must include:
a description of all debts of more than $500 that were owing
by the member that were discharged or paid (in whole or in
part) by any other person and the names of each of those
In other words, there was a clear rule that Peters seemed to have broken. On share-holdings, the Register simply requires MPs to list every company in which they have some ownership, not how many shares they hold. So no rule broken. And anyway, Key’s trust bought and sold his shares in 2003, before the Register was introduced.
Third, Key seems to have been given some leeway because he was a novice MP in 2003 and had sold his shares before the end of the year, before his ownership became public knowledge. He did the right thing, eventually. Peters, by comparison, was a long-serving member who should have known better. The problem with that argument is that Key knew to get rid of them in 2003, knew that having them was an apparent conflict of interest. So if he knew it was wrong to have them and ‘did the right thing’ in June, why didn’t he know it was wrong to have them and do the right thing in February, when the trust first bought shares, and in May, when it bought more?
Perhaps the largest remaining stain on Key from this is his decision not to tell the public about the extra shares the trust bought in May 2003. He says he didn’t know in July, when he was answering questions about the initial 50,000 shares, about the other 50,000 shares.
But just as commentators pointed out that Peters only had to call Brian Henry to check the facts before he held up his famous ‘No’ sign, so we should note that Key only had to call his broker to check exactly how many shares the trust had owned before he went on record saying he had only owned 50,000 shares.
What’s more, once he knew that he had owned twice as many shares as he had declared publicly, why didn’t he come forward and put the record straight? Was it that he simply didn’t want the story dredged up again?
It was poor judgment by Key to ask questions in the House about a company that he held shares in. That poor judgment has been compounded by a decision not to declare the full 100,000 share ownership at the earliest opportunity. So while questions are being asked about our ability to trust Key, perhaps the more germane question is whether Key has the judgment necessary to be prime minister.