New Zealand is advertised all over the world as a very easy place to do business. It also doesn’t ask awkward questions.
Because employment law has been developed by the judges to legally cover up illegal activity, obviously it is very useful for certain types of business. Not just employment matters.
Don't understand it ? Don't believe it ? As the QCs say - read on.
You need lawyers, because lawyers are supposed to be honest so they have special privileges.
Foreign based people can send money from overseas to overseas, through *clean* New Zealand, using a “foreign trust”. There is no public list of those trusts and, provided the money only passes through lawyers, it won’t be traceable. The Inland Revenue has a list, but an overseas fraud investigator would have to know the name of the trust to ask for its details. And then anything the investigator might want would be held by the lawyer, who would claim legal privilege. So money can be laundered between two overseas places, through New Zealand, and made untraceable.
It used to be possible to do the same for money within New Zealand using a “shell” company. It would be registered in New Zealand (*clean* again!) but have only overseas directors. But it would be run by a New Zealand lawyer. The money would go into and out of or round about New Zealand through the lawyer’s trust account. So if the police came looking, still everything was behind legal privilege and untraceable.
The trusts and companies brought good foreign money in for the lawyers fees.
Unfortunately the European Union countries are bothered about helping drugs, child pornography and forced prostitution to flourish. They are also bothered about the funding of terrorism.
After skilled lawyer arguements, especially from Professor Prebble of Wellington University, the “foreign trust” system of laundering was kept without a public register, so that still works. It got a journalist killed and brought down a government, but as Professor Prebble might ask: what has that got to do with New Zealand? New Zealand does not tax this money so it is not concerned about it.
But shell companies had to go, or New Zealand's investment status was at risk..
Then New Zealand’s clever employment lawyers and employment judges made what might have been illegal into something legal. Or, put another way, they made another way of transferring money privately, so it could not be traced.
To start with the coverups were hung on NDAs, not just to cover up sex offences as famously they did in the UK, but to cover up anything, by anyone.
The lawyers would draft documents to appoint managers' mates or give them money, and to cover up the evidence of that. Equally, the system would work to wash through some proceeds of crime, and to get people prohibited from talking about any of it. To start with, you needed to make up an employment dispute and a mediation, and get the agreement signed off, but then MBIE set up a system to do it on line. They made up the magic RECORD-OF-SETTLEMENT which could not be questioned, only enforced, once they had signed it.
Mediation was already available free from MBIE. A rule was made that anything in a mediation was secret. If documentary evidence needed to be handed over, it could be done then. If threats had to be made, they would be secret too.
If anyone came forward to blow the whistle, the fraudsters could pay lawyers - including the whistleblower's own lawyer - to take them to a mediation to hand over documents, and to get a signature on a "record of settlement". The magic was that people trust their own lawyers, who would always advise a "settlement", and the "settlement" could contain anything. The only important point was to get it signed off by MBIE so that MBIE could claim to enforce it in its own courts, another power the employment judges were happy to expand their powers to do.
That meant the managers could get the judges in effect to prosecute the whistleblowers if they talked about anything they had put in the "record-of-settlement". They made up a power to "fine" anyone at who "breached" a "record-of-settlement", for example by reporting the fraudsters to the authorities.
So the fraudster became the protected party and whistleblowing was the crime. The MBIE officials and judges began ordering "fines" payable to whoever they said, maybe even the fraudster or his lawyer. The legal system was turned upside down.
The judges had a power to anonymise case reports but they extended that to include orders suppressing documents and ordering that people should not be identified. This was a very bold stroke, but if anyone noticed they did not protest.
The lawyers, the police, government Ministers, the Privacy Commissioner, the Human Rights Commission, the Ombudsman, the Serious Fraud Office ... We don't know how many if any got personal payments, but they all agreed to look the other way and ask no questions about what was being covered up or how. Or why.
Government Ministers say those authorities are our guarantee of *clean* green New Zealand, but it might be more accurate to say they are guaranteeing fraudsters their "privacy". White-collar "privacy" means making your own documents, using them to move money about, hiding your documents, and no auditing. Even the auditors agree to look the other way.
MBIE and the employment lawyers and judges also started frightening victims off with costs orders. Don't dare try to query what the lawyers have done or they will do what they said and "destroy your entire career" and "bankrupt you". In fact, don't query what employers do, or they will bring in the employment lawyers and judges to "destroy" and "bankrupt" you.
Chief Judge Graeme Colgan started bringing in the new court law – let’s call it the illegal law, because it isn't what Parliament says is legal - in 2010. It was cleverly done. He made judgments saying there could be secret meetings with secret deals ... but he didn’t make any actual illegal orders against anyone, so nobody protested. Why would they waste their money doing that?
Since nobody argued, the lawyers and judges chalked up the new illegal rules as established precedents that could be used as rules for another time.
By 2015 Chief Judge Graeme Colgan had brought in a precedent that a "record of settlement" could also cover up criminal offences.
Basically the lawyers, judges and MBIE brought in a parallel, illegal legal system.
The lawyers have to be paid, but public managers can pay with public money. For private cases, it is actually better than the shell company system, because MBIE also guarantees secrecy. The money has to go through the lawyer's trust accounts, to get the benefit of legal privilege, but then it always did. People using this system for private cases don't mind paying the lawyers privately.
Obviously in New Zealand that isn’t called corruption, because in New Zealand, there is almost no perception of corruption. Minister Little told the world that, many times.
The coverups continued with multiple lawyers stitching up their clients in secret, as Leighton Associates have discussed before. The gagging became normal. We note it is similar to what happened to Zelda Perkins when she tried to report an attempted rape of a colleague by Harvey Weinstein, and understand that Wellington employment lawyer Geoff Davenport learnt at the knee of Mark Mansell, Harvey Weinstein's London lawyer. Judge Kerry Smith is said to be an admirer of Geoff Davenport, who acts for a number of government organizations in Wellington.
Corruption may be more expected in the UK, but Mark Mansell was being prosecuted by the UK Law Society for the Zelda Perkins case, which Leighton Associates have discussed here, here and here. Recently Mark Mansell's lawyers claimed that Zelda Perkins own lawyer actually suggested the coverup in return for money, so he had no case to answer. The prosecution was stayed because Mark Mansell said he might die if it continued, but it was not withdrawn. That was because in the UK, the MPs and regulators properly call this sort of coverup "perverting the course of justice" and take it seriously. That is why Mark Mansell and Zelda Perkins' lawyer did not let her have a copy of her "settlement". It is the main evidence against Mark Mansell.
The situation is different in New Zealand where MBIE has changed the legal system. Instead of lawyers being prosecuted for doing coverups of crimes, the coverup itself is "justice". Anyone reporting the crime, or even auditing it, will be punished. Here it would be Zelda Perkins in the dock, with Mark Mansell prosecuting her to protect Harvey Weinstein, and the coverup document would also be suppressed.
Leighton Associates have also discussed what happened when corruption in various government bodies escalated with whistleblowers still protesting. The new illegal laws to prosecute whistleblowers were tested out in public by the lawyers and judges. They started with Geoffrey Brown, the whistleblower of the Tauranga City Council. His was one of the first serious coverups of 2014, which was when shell companies had to be ended. Judge Colgan had retired. Judges Inglis and Corkill got to work instead. Leighton Associates have discussed that here and here in earlier posts.
By destroying Geoffrey Brown's life to punish him for whistleblowing on the Tauranga City Council, Judges Inglis and Corkill were successful in reassuring officials and lawyers, and anyone using the "record of settlement" system for secret transactions and coverups. They carried out those usual threats from employment lawyers: "We will bankrupt you." "We will ruin you." They got Geoffrey Brown bankrupted and sent to prison in 2017, and saw other lawyers start trying to do the same to Allan Halse, an employment. advocate who publicly resisted coverups. It worked well for years. Commissioners were not sent in to Tauranga City Council until late 2020.
Judge Kerry Smith did something even more complicated. Professor X and Mr Y of Wellington University had been giving each other and their families and supporters promotions and payouts. They thought they were going to get caught with years of faked records. So they faked emails that were personally embarrassing - about what their lawyer Mary Scholtens QC called "sexual proclivities" - and paid Helen Cull QC and Karen Radich, high-class lawyers, to run an illegal coverup process. Geoff Davenport was paid to get all the evidence of years of fake records back by buying it secretly from Dyhrberg Drayton and Bartlett Law in a secret MBIE mediation. Then it was all going to be signed off by MBIE - the faking and the coverup.
It almost worked perfectly. Judge Kerry Smith did what it took to confirm the coverup, even calling a witness himself to give illegal evidence in court. He anonymised Professor X and Mr Y, ordered more payments to the lawyers, and confirmed that, in New Zealand, MBIE rules say frauds can be authorised and enforced. The lawyer Mary Scholtens QC had put the coverup method in writing, so there is no doubt about how it was done, and Judge Smith had also said in open court that what they were all covering up was “fraud”. Still no MP or journalist protested.
Professor X must have gotten anxious though. His mates and family don't want to be seen getting the benefits of him either. Professor X also has business in the UK, where not everyone goes along with illegal coverups. Academics have been critical and MPs and journalists have taken a stand. Luckily no New Zealand academic, MP or journalist would do that.
Professor X tried to get his position protected further against whistleblowers by a Bill that would have made it illegal to say anything about judges that might undermine them. Many lawyers who have done these coverups are now judges and some of the coverups have come out. By now the coverups are layers deep.
The Law Society was also run by an employment lawyer, Kathryn Beck. A scandal about sexual assault and the rape of a young victim by a well-known Wellington lawyer was covered up, including by Kathryn Beck obtaining a "super injunction" from another High Court judge who is also an employment lawyer, Judge Peter Churchman. Judge Christine Grice, who also used to run the Law Society, struck out a fraud action against Geoff Davenport that would have exposed Helen Cull QC as well as the other Wellington University lawyers. The Court of Appeal supported the employment judges and it supported the High Court judges who supported them, and they all supported MBIE's approach to coverups.
Professor X's Bill was still too much for some Kiwis. It didn’t get through. Instead, again with the help of of Minister Little, he put in place the Contempt of Court Act 2019. It lets MBIE enforce the sort of gagging orders they had been making anyway, as though they were court orders.
The employment judges who confirmed the MBIE system have been joined by the new Judges Holden and Beck. They both have a solid record at Crown Law (Judge Holden defended the Pike River Mine criminal buyout by Peter Whittall up to the Court of Appeal) and the Law Society (Judge Beck obtained the High Court gags protecting the men from Russell McVeagh).
Obviously, none of these judges can reasonably be expected to decide that what they have all been doing is not justice but perverting the course of justice, and they can hardly be expected to suggest that each other should be prosecuted like Mark Mansell.
Instead we saw Minister Little on television telling the British that New Zealand suppression orders are "contra mundum", against the whole world, and convening international meetings stressing that everyone must obey them or else.
Nobody surely thought that was really about Jesse Kempson, who killed the British backpacker Grace Millane. Minister Little was reassuring Professor X that he wouldn’t be exposed in the UK, where he also advises.
Now that the UK has got Brexit done, it is free of the European Union rules on tax evasion. Like New Zealand.
But there are still some international policies on money-laundering which are sometimes taken seriously. Concerns about the lack of public information in the British Virgin Islands have led to an investigation there about money-laundering, for example. Lucky then that there is a way to move money untraceably, in *clean* green New Zealand - and a further opportunity to attract more business.
Whether you can use a “foreign trust”, or you need to put it through MBIE's employment system, you can cover up any transaction provided it is done by lawyers who can use legal privilege. It must all be legal, because judges do it, and that is what matters in a legal system. And it must be *clean*, because it's New Zealand.
New Zealand has shown what internationally clever lawyers and judges and Public Relations it has. Retired Chief Judge Graeme Colgan even has a job being a judge at the United Nations now, where the international rules about corruption and the judiciary come from. New Zealand's politicians are still presenting New Zealand as *clean* and green. Shouldn’t we be proud?