Mallard Trevor: Anti-Money Laundering and Countering Financing of Terrorism Bill — In Committee 
Mallard Trevor: Anti-Money Laundering and Countering Financing of Terrorism Bill — In Committee 
[Volume:658;Page:6948] 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 Although colleagues have described Part 2 as being the substantive part of the bill and I accept that there is quite a lot of meat in that part within Part 3 there are also some pretty interesting questions that have to be discussed. In clause 85 the question of restraining injunctions is addressed. That goes to an ability to get a restraining injunction against the shifting of cash in a way that people believe is contrary to this legislation. I point out that this is money that could be going out of New Zealand but the other situation could be if it was coming into New Zealand; and if it was money that had previously been laundered and taken out of the country there is an ability to get a restraining order to stop people bringing it back in. Part of my question to my colleagues is why the hell anyone would want to do that. We have money that has been offshore and been washed and now it is coming back in again. You know the $100000 that Melissa Lee had—if she had that money sent it offshore had it laundered and all cleaned up so it is dressed sparkling and ready to go I am sure we would want the ability to let it come back into the country and grab it when it was back here again rather than getting an injunction to stop money coming in. 
Hon Pete Hodgson 
: It might help the current account deficit. 
Hon TREVOR MALLARD 
: I’m not sure that bringing in laundered cash helps the current account deficit. I am not absolutely certain about that. It would probably depend on her liabilities offshore. 
The CHAIRPERSON (Eric Roy) 
: Again I say that I am listening very carefully and I detect the member accusing another member of money-laundering. 
Hon TREVOR MALLARD 
: Oh no. 
The CHAIRPERSON (Eric Roy) 
: Well that is my detection so I ask the member to choose his words a lot more carefully than that. All members are honourable members. 
Hon TREVOR MALLARD 
: Of course. I apologise if there was any indication that I was doing that at all. All I was trying to say was that there is $100000 cash floating around here somewhere. It may or may not have been shifted offshore and may or may not have breached the legislation as it went. I make it clear that in the case of Melissa Lee there is no doubt at all that there is $100000 extra cash because she has said that there is. She has accepted that there is that extra cash and all we are speculating about is what she has done with that cash in the interim. Where has that money been? I ask whether it has been offshore and why anyone would want to have a restraining injunction to stop it coming back in if there is the opportunity for the Crown to grab the money that belongs to NZ On Air as it hits the country. Why would there be a restraining injunction to stop that? 
The next clause I would like to get to is clause 88 and in particular the heading of the group of clauses—and in fact this group is only one clause long. I do not want to criticise parliamentary counsel too much but it is not the normal practice to have a heading over a sole clause. We will take that as it is. This clause is about pecuniary penalties and the definition of pecuniary is something that at the moment is very live within New Zealand. Some of us thought it was a pretty simple thing. I thought it was like cash in that if one had a pecuniary interest it was pretty clear. What has become clear to a number of us now is the fineness of this definition both with regard to the general law and to this bill in particular which is something more detailed than we might otherwise have thought. I want to know where someone who is paying a pecuniary penalty can get the money from. Can that person get it from a trust of which he or she is a discretionary beneficiary? Does that meet the definition of pecuniary penalty? If a pecuniary penalty is applied can someone get that money from a trust in which he or she has an interest as a discretionary beneficiary? 
I would be interested in hearing the interpretation of the former professor of law the Hon Dr Wayne Mapp who is currently sitting in the chair on that. I know that he is more learned in matters of the law than the Minister who has been in the chair until now the Hon Simon Power. If he wants to share with us his views on pecuniary interest I think that would be good for the Committee but possibly career-limiting as far as the Minister is concerned. 
I move now to the provisions on failing to report a suspicious transaction. My old schoolmate Catherine Delahunty is in the Chamber and I want to spread the joy and the love around and ask why she did not report a suspicious transaction when she became aware of it. I ask why she took a few weeks to do that in a similar way to Melissa Lee failing to report for 4 whole months not only one suspicious transaction but years’ worth of suspicious transactions. In fact under clause 90(b)(i) a transaction has to be “relevant to the investigation”. It does not even have to be relevant to a prosecution. It just has to be relevant to an investigation. So that means it is relevant if there is any possibility at all of the money being shifted offshore—and I assure Catherine Delahunty that I do not think her colleagues are going overseas with her superannuation so I do not think there is much danger of her one going offshore. 
I ask how much is involved in this. How much would Bill English have to put in his pockets when he is doing a ministerial trip to trigger this particular legislation? On the face of it we cannot tell. My understanding is that in that case it would be a matter for the regulations that follow. On the face of the bill it is possible that if there is a suspicious transaction while there is an investigation going on and someone makes an overseas trip and has cash in his or her pocket then this legislation could be triggered depending on the level that is set by way of regulation. I understand that sometimes in the past $10000 in cash has been the amount that one has had to declare at customs as one goes through. I ask whether it counts in this particular case if someone loads up his or her credit card. If say someone takes the Endeavour Trust credit card offshore as a discretionary beneficiary because that is apparently allowed with the permission of the trustee my question is whether that triggers this legislation. 
I also ask whether if someone else who is on the trip fails to report that person is in breach of this legislation or whether that would be the case only if he or she were an employee of the Department of Internal Affairs. If someone were a seconded Treasury official would he or she be caught? I am interested in hearing from any of my colleagues who could answer that question and the question of whether if someone were seconded and his or her salary for the time spent was being paid through the Department of Internal Affairs that person would become one of the people required to report that sort of transaction. 
It is not a simple matter. There was a case of someone who was a current Minister who went shopping in New York using a Department of Internal Affairs credit card. To be fair to her after a period of time she repaid the money. 
Chris Hipkins 
: It’s the National Party pattern. 
Hon TREVOR MALLARD 
: Well there is a bit of a pattern emerging here. I ask whether that counts as money-laundering. If someone uses a credit card for a purpose for which he or she is not entitled such as shopping in New York at Saks Fifth Avenue and a number of other places spending a total of about $5000 on the company credit card for personal shopping and that someone is a current National Minister— 
The CHAIRPERSON (Eric Roy) 
: I just ask the member to reflect a little bit on Standing Order 116 “Personal reflections” which mentions personal reflections imputations and so on. The member is on the border and is crossing it now and again. I would be happier if he would desist from using names in that regard. 
Hon TREVOR MALLARD 
: I have just now. 
The CHAIRPERSON (Eric Roy) 
: Yes; you saw me looking at you. OK. 
Hon TREVOR MALLARD 
: I was not naming the woman concerned who was a Minister in the previous National Government and this one but I think people will end up doing that by a process of elimination. 
The CHAIRPERSON (Eric Roy) 
: What about the bill? 
Hon TREVOR MALLARD 
: I will get back to the question. The next clause is clause 92 “Unlawful disclosure of suspicious transaction report”. I want to know whether the whistleblower legislation applies here and if so which legislation takes priority. If someone is a whistleblower “for the purpose of obtaining directly or indirectly an advantage”—I am not going to suggest that he or she gets a pecuniary gain—because a whistleblower is often seen as someone who is of high standing in the community and a very ethical person then is whistle-blowing seen as an advantage under this legislation? What overrules that? 
Clause 93 “Failure to keep or retain adequate records relating to suspicious transaction” is relatively simple I think. There are lots of cases that we could consider at the moment of people who have failed to keep or retain adequate records relating to a suspicious transaction. If we consider one of those we see that in the end New Zealand On Air did an audit and it went through someone’s books with a fine-tooth comb. I will repeat the comments I made when I was the Minister in charge of New Zealand On Air when it was ripped off by  
Asia Downunder 
 when it and its parent company gave inflated invoices to New Zealand On Air. It is something I find particularly embarrassing. Some very senior people chaired the board and it had some very experienced chief executives. But they had the wool pulled over their eyes by  
Asia Downunder 
 and a six-figure sum I understand— 
Hon Pete Hodgson 
: Just over $100000. 
Hon TREVOR MALLARD 
: —just over $100000 was ripped off from that organisation. That was a suspicious transaction. I want to know whether there was a failure to keep records. 
Clause 94 is about obstruction of an investigation. That raises a very serious question. I see that the Minister of Broadcasting is not in a position to answer at the moment but I want to know whether there is a conflict of interest between running a campaign and being the main organiser for an individual and being the person to whom the organisation doing the investigation is reporting especially if that money has gone offshore and is caught by this legislation. Again I do not want to be too critical of Melissa Lee. To be absolutely fair to her she has indicated albeit 4 months after the identification of the shortfall on her part—that is putting it particularly nicely; other people would have called it a misappropriation—she has decided to repay the money that has ended up with her and that should not have 4 months after being informed of it. 
I say to Bill English that that is a very good example for him. If he wants to avoid being caught by this legislation as he takes the Endeavour Trust credit card offshore—and depending again on the monetary level at which the legislation applies—then he should look at the previous decade and pay all the money back. It will not make an enormous difference to the Government deficit but it would help its credibility. I say that a lot of us as we go overseas rely on New Zealand’s reputation. The reason we do not end up on black lists under money-laundering and financing of terrorism legislation is that in New Zealand we have a very good reputation for ethics in Government. If we lose that good reputation under this legislation and in a number of other areas New Zealand Ministers will not be as welcome as they are.