Power Simon: Serious Fraud Office (Abolition and Transitional Provisions) Bill — First Reading 
Power Simon: Serious Fraud Office (Abolition and Transitional Provisions) Bill — First Reading 
[Volume:647;Page:16098] 
SIMON POWER (National—Rangitikei) 
: 
 I thank the Minister for outlining the provisions of the bill. If the bill passes its first reading the Law and Order Committee will welcome the opportunity to deal with this issue. In particular I note the report-back date of 15 August 2008. It was interesting that when the Organised and Financial Crime Agency of New Zealand was first mooted as a good idea everything was going to be up and running by 1 July this year—a date that is now well out of reach. 
National of course supports all moves to deal with gangs and organised crime. But I stand here today in the House to say that the National Party is extremely concerned about the disestablishment of the Serious Fraud Office and will be opposing this bill at its first reading. Indeed the Minister’s statements about the establishment of the Serious Fraud Office in the wake of the 1987 sharemarket crash were without sounding insensitive on the money and it seems to me that there has never been a more important time with the large number of finance company collapses that we have seen in recent months for an organisation like the Serious Fraud Office to do its work and I will come back to that shortly. 
The National Party remains slightly unconvinced about the birth of the Organised and Financial Crime Agency of New Zealand. We know of course that the idea of an organised crime agency was launched at a hurriedly put together press conference on the same day that the former Minister of Corrections was due to come home from an overseas rugby trip with one of his officials who had been suspended from work at that time. We know from looking at background documents that very little policy work had been done leading up to that announcement. In fact the powers that were to be held by the so-called Organised Crime Agency as it was then known were not clear and it took months and months to get information about what sorts of abilities this particular organisation would have. 
It seems unfortunate that with that policy work taking so long to get done this Government now wants this legislation rushed back to the House on 15 August like the electoral finance legislation the emissions trading scheme legislation the real estate legislation and the bail legislation. I urge the smaller parties in this House to think very carefully about voting for legislation that would remove the Serious Fraud Office from our law books. The Government is proposing a very substantial change and at a time when the papers are describing work that is being done to deal with those people who have lost substantial amounts of money because of finance collapses. I ask other members of the House to consider these comments from an article dated 3 May entitled  
Blue Chip Investors Battle for Justice 
: “The Securities Commission is limited in what it can do about Blue Chip because it was property investment. Property is not covered by the Securities Act …” meaning that the Serious Fraud Office has an extraordinarily important role to play here. In fact Grant Liddell the interim appointed chief executive of the Serious Fraud Office who was put in that position by sloppy planning by the Government over the new Organised Crime Agency said: “The SFO has spent a substantial amount of time and resources” on Blue Chip since the February liquidations. The paper itself describes the Blue Chip issue as “firmly in the soon to be disestablished SFO’s court.” Now whether or not an investigation goes ahead we know that Mr Liddell who is the existing director of the Serious Fraud Office had this to say: “We have had over 150 investors contact us and have made a large number of inquiries concerning the issues in this case and we’re nearly at a point where I will determine whether an investigation using our statutory powers ought to proceed.” 
What the Government is proposing here today is to replace this body—and let us be clear about this because the Minister in fairness to him did allude to this—that has already undertaken substantial investigations into these issues with a body that has fewer powers to make those investigations. Although any organisation that has as its goal the tracking down and prosecution of organised crime and gangs is to be welcomed one cannot help but feel that fraud could well be sidelined if a specialist organisation is not retained to deal with that particular issue. In fact the Minister of Justice herself has confirmed that gangs will be “very much the focus of this new OFCANZ body” which is fine in itself but that does not give us confidence that these complex issues of fraud will be dealt with in the same way. 
In his final annual report retiring Serious Fraud Office director David Bradshaw said that serious and complex fraud remained an issue but that every year several cases his office investigated would not be regarded a priority by police. Mr Bradshaw also questioned whether the balance of New Zealand’s laws was tipping too far in favour of the rights of defendants. Although I do not stand here to agree with Mr Bradshaw on every matter that he raises I can say that one thing that would concern National is if on the removal of the Serious Fraud Office fraud took second place at the very time when expertise is needed to deal with these issues around so many collapsed finance companies. 
National is not convinced that this legislation nor the background work behind the Organised and Financial Crime Agency of New Zealand has been well-thought-through. We are not convinced that a body that is also charged with dealing with gangs and organised crimes but has fewer powers than the Serious Fraud Office would be as intent or as focused on issues of fraud as the Serious Fraud Office has been. I am not saying that the Serious Fraud Office has not had its difficulties. I am saying that to replace it with a body with a wider mandate across organised crime and gangs but with fewer powers at a time when we have seen about $1.6 billion of investors’ money lost is not a smart thing to do. 
On that basis I can stand and let the House know today that of course National shares concerns about issues relating to organised crime and gangs and supports any moves made by any political party to deal to that scourge of society but wiping out the Serious Fraud Office at a time when specialist fraud powers are needed to deal with the current climate around finance companies seems to lack a considerable amount of thought and foresight.