Key says Ken Whitney's email to Todd McClay saying Key thought there was no plans to change foreign trust regime was "sloppily written"; Key repeats knew nothing of review plan; says often approached by public in person; cites Koru lounge as example

By Bernard Hickey

Prime Minister John Key has said his personal lawyer, Ken Whitney, has agreed with the Prime Minister's version of a conversation in late 2014 that ultimately led to a successful lobbying effort by the foreign trust industry to prevent an IRD review of the industry.

Key has said he told Whitney that he knew nothing of review that was proposed and published by IRD in November 2014 and was reported on in late November by the New Zealand Herald. Key said he had told Whitney to approach then Revenue Minister Todd McClay to discuss the issue and has repeated that he knew nothing of the review or the New Zealand Herald report.

Whitney then wrote an email to McClay requesting a meeting which said he had "spoken to the Prime Minister about this and he advised that the Government has no current plans to change the status of the foreign trust regime in New Zealand." See our previous coverage of Whitney's lobbying.

The slightly different version of the conversation has become a point of contention over whether Whitney had used his personal connection to Key to influence McClay, and whether Whitney mis-represented Key's knowledge about the review. Whitney's email suggests Key had a firm view that any review would not result in a change in the status of the industry, but Key denies this and has characterised it as a 'mis-representation' of the conversation, albeit accidental as a result of a 'sloppily written' email.

Key told reporters in Parliament on Tuesday that he had since spoken to Whitney who had agreed with Key's version and that Key thought the email had been "sloppily written."

"He is absolutely confident that my version of events is correct and that's what he attempted to write in the email," Key said.

"It may be the email was sloppily written if that was the case, but that was absolutely right. I was not aware either of the changes that were there. I was certainly aware that we weren't making any changes because I would have known about them, because I would have seen the work, and I hadn't seen any work. But outside of them, I sent him off to the minister," Key said.

"In the end, you know, people write things in a way which is sometimes shorthand," he said when asked how a trained lawyer could write an email sloppily.

'I'm open and talk to Koru lounge members all the time'

Key was then asked if he was concerned about perceptions of vested interests having special access to the Prime Minister to exert influence.

"No, I am not concerned about that. Look, we are very accessible and that includes being out and about in the community pretty much every day that we are not in Parliament or overseas. That also means that I make sure I am out there," Key said.

"If I go to the Koru Lounge, for instance, I don't sit off away in the corner. I stand out in the middle, people come up to me from all works of life every single day," he said.

"There is nothing precluding anyone, just because I know them, asking me a question. I don't live in a test tube and people do come up and do that. I don't wear a sign that says 'don't ask me a question'. What I do is thoroughly professional, which is to say 'I am not aware of any changes' but then 'your industry group needs to go and talk to the minister'. They went and did that. That happens again pretty much every day."

Key confirmed that he had spoken to McClay soon after being approached by Whitney.

"I said to him I had been approached by my lawyer, as part of an industry group, that I had told him that I wasn't aware of any changes and I sent them in his direction," Key said.

Key has spoken to Whitney

Key confirmed that he had spoken to Whitney in recent days. Whitney has not responded to reporters' queries.

Key was then asked how he had contacted Whitney, as media had been told he was uncontactable.

"Oh, I can always get hold of people that look after me," Key said.

McClay later told other media that he was not sure if he knew that Whitney was Key's lawyer at the time he received the email. Key later told reporters he was sure he had told McLay that Whitney was his lawyer.

Opposition comments

Grant Robertson called on Key to be more open, given Key had initially not disclosed to journalists that Whitney was the member of the public who had approached him in 2014.

"There is no way Todd McClay would not have felt pressure from above. That’s shown by the impressive speed with which Ken Whitney and his lobby group got a meeting with the Minister," he said.

(Updated with links to exchanges in Parliament on foreign trusts issue, detail from McLay and Key's follow-up)