Cabinet documents do not shed sufficient light on why McCully spearheaded an initiative which at its kindest interpretation resulted in a sweetheart deal to look after Saudi businessman Hamood Al-Ali Al-Khalaf – whose company had made legal threats to seek $30 million after National reconfirmed its predecessor’s ban on the live sheep exports.
Nor do those documents – which are very carefully constructed – pass the smell test for a Government that has become rather too easy a prey for commercial shakedowns by aggrieved foreign investors.
The story goes that the Al-Khalaf Group employed public-law lobbyist Mai Chen to prosecute its grievance with the National Government by arguing that it had been commercially harmed by a policy about-face. This after rival lobbyist Matthew Hooton – who ultimately blew the whistle on the affair – lost out on the representational contract.
The chain of events so far disclosed suggests that Cabinet ministers were not prepared to run the risk that Al-Khalaf – a powerful figure in Saudi Arabia – could permanently sour New Zealand’s negotiations towards a free-trade deal with the Gulf states unless he was ‘looked after’.
There may have been legitimate reasons for compensation to be made. But in an environment where investor disputes are becoming politically charged through opposition to such measures within the proposed Trans Pacific Partnership – McCully and his officials instead opted for a creative face-saver which delivered value to the aggrieved Saudi businessman and got him off their backs.
The resultant moves to invest in an agribusiness hub on Al-Khalaf’s farm and fly pregnant ewes to Saudi Arabia have not been dressed up in the official documents as outright compensation. Instead, they are investment towards securing the free-trade deal.
Opposition politicians have tried to damn McCully’s actions as a ‘bribe’. This is clever politics.