Behind the Scenes: TVNZ Frontline Winebox Investigation

TVNZ has just announced it is scrapping its flagship current affairs programme, Sunday, formerly known as Frontline. While we can argue about what stories the media chooses to cover these days and I have been openly critical of some of those choices, there’s no denying the ability of long-form current affairs shows to, on occasion, transcend the mundane and really speak truth to power.

I publish this extract from the book The Paradise Conspiracy for the first time, by way of a public thank you to Frontline’s Carol Hirschfeld, Mark Champion and Michael Wilson for the punishment they took in getting the 1994 Winebox documentary to air, and former One News bosses Shaun Brown and the late Paul Norris who commissioned the investigation.

While there are other avenues for long-form investigation, this documentary achieved reach of a million people and changed New Zealand’s political landscape.

I hope that when the dust from these TV explosions settles, current affairs will eventually return.

-Ian Wishart

Tropical Heat

“Fauntleroy, the banker, was hanged at the Old Bailey on the 30th of November, 1824, for forging orders for the transfer of stock.”

Weekly Dispatch, 1856

The first thing that hits you in Rarotonga is the landing. It’s a short runway, requiring maximum braking from the Boeing 747’s when they touch down. Our appreciation of this had been somewhat heightened as, the night before, our Air New Zealand flight on this very same jumbo jet had been cancelled because of a minor brake failure.

Cheerfully, Air New Zealand had informed passengers in its first class lounge at Auckland that normally the plane would continue on with a fault like that, but because of the extraordinarily short runway in the Cook Islands, discretion was the better part of valour. We were therefore 18 hours late, and needed to squeeze all our filming in to a window of opportunity now only 22 hours wide on the ground.

The second thing that hits you is the moist tropical air, gently spiced with fragrances like frangipani and quickly all-enveloping. Standing at the top of the boarding steps, you soak all of this up in an instant, while your eyes take in the glittering Pacific Ocean beating incessantly on the coral shore beside the airport, and your ears are bombarded with the cacophony of a minstrel with a guitar and a public address system singing welcome songs in the local dialect, Cook Islands Maori. God, it was good to be here, I reflected, taking a lungful of what passed for a tropical breeze as we made for the terminal.

It was 3:00pm by the time we hit the street in a taxi, exclusively ours for the rest of the afternoon. Motorbikes and scooters buzzed around us as we made our way into town – the main form of transport in the islands’ capital,

224                                 The Paradise Conspiracy

Avarua. Even most of the taxi vans and jeeps appear to run on clapped-out, two-stroke motorcycle engines.

The road from the airport is guarded by an ageing World War II anti- aircraft gun, once pointed toward the Land of the Rising Sun, now presumably a lone sentinel against hordes of invading tax inspectors. The other thing you notice – and it has absolutely no relevance to the story – is that every house has its own graveyard, usually on the front lawn. The requirements of local custom through the generations have demanded that relatives are buried close to their surviving families.

Some houses ran out of space eons ago, or so it appeared, the tombstones and sarcophagi crumbling back to dust, in some cases open to the monsoons and the sticky heat. Elsewhere, the houses themselves were crumbling – long since abandoned – the tombs in front overgrown with lush vegetation, their inmates forgotten.

We had three hours before sunset to film as much as possible, and it quickly became a race to complete the PTC’s. Standing outside the Cook Islands Monetary Board offices for one particularly long shoot, I could see the faces of the curious – noses pressed to the windows as this foreign television crew seemed to take over the main street outside.

It was going to be extremely difficult to be inconspicuous in a place this small. As an indicator of size, rush hour takes place at 4:00pm each day and generally lasts two and a half minutes. Despite the fact that more money can go through here than the entire GNP of some fairly sizeable countries, Wall Street this was not.

Conscious of the fact that I needed to get more than a dozen reports down on videotape by sunset if possible, on different sides of the island, we tried to rattle them off quickly, and the strain was showing in the speed of my speech. It wasn’t helped by the fact that each PTC was up to 45 seconds long, and all had to be memorised word for word. The lawyers back in Auckland had carefully vetted exactly what we would say – one deviation could be the difference between success and a multi-million dollar lawsuit. While Michael Wilson and cameraman Peter Day had the luxury of wearing sunglasses, I was in double jeopardy – not only no eye protection but, for reasons of lighting, I also had to stand facing directly into the intense glare from a tropical sun. All of this whilst repeatedly walking up and down the middle of the main street trying to dodge mopeds and the occasional four wheeled vehicle. This also added to the “troppo” atmosphere that quickly overtook all of us – every time a scooter went past it sounded like a buzzsaw on the videotape. We marked out 19 “takes” on the first PTC alone.

Terrified of alerting European Pacific to our presence and setting off a Court injunction, we were also trying not to broadcast the contents of our PTC’s too loudly. In some situations this was achieved by suddenly mumbling at the crucial point as a nosy local walked past, but occasionally it degenerated into farce.

A group of Cook Islanders walking along a beach we were filming at saw us in the distance pointing a stick into the sand, talking into the camera and then suddenly dancing furiously on the spot before shifting to a new point on the beach and starting the ritual again.

After five or six of these little dances they could have been forgiven for thinking we might be filming some bizarre new kind of rock video, but instead each time they got close we were having to rub out the words “tax fraud” which we’d carved in the sand with a stick, and move further away to film it again before they got too close.

The astute reader may ask why we didn’t let them go past, instead of trying to “outrun” them on the beach? We had another problem, in that the sun was dropping like a stone on the horizon and very soon there would not be enough light for the shot to work. We were trying to outrun the encroaching shadows.

By the time night fell, we’d filmed nine of the 13 required PTC’s, far more than we expected to complete. We checked into the Edgewater Resort Hotel, and looked for somewhere to eat. We found it in the form of PJ’s Bar, a tavern and restaurant a short distance from the hotel. The place was rocking, helped along by a singer with a keyboard who could cover anything from Meatloaf to the Beatles and everything in between.

Forcing our way through the crowd we found a table in the restaurant section. Three beers, two wines and three Glenfiddich whiskies later, we really started to feel mellow. So mellow in fact that when a tiny lizard – no longer than my thumbnail – dropped onto Mike Wilson’s forkful of food just as he was about to take a mouthful, I nearly didn’t tell him.

In fact the fork got halfway to his chops before I let out a strangled squawk and pointed to the extra morsel happily perched on a piece of fish. It proceeded to jump onto his beer glass rim before scurrying off into the gloom. It was also a good state of mind in which to observe the clientele. In one corner, two tables from us, were a group who looked like wild young merchant bankers. Loud and brash, yet totally at ease with the locals. These had to be boys from one of the trust companies, I reasoned. We later found out they were from European Pacific.

Over at the bar, a tall sunbleached American dressed in combat fatigues and looking for all the world like a mercenary who’d just stopped in for a drink. Peter Day was adamant the guy was a CIA agent – an idea that appealed to my sense of mystery and intrigue. It was easy to envision. Rarotonga was one of the stopovers on the old trans-Pacific “coral route” – the series of island hops made by the flying boats en route from the United States to Asia and Australasia back in the 1930’s, ‘40’s and ‘50’s.

Although no longer an essential stopover for the traveller, Rarotonga had lost none of its “tradewinds” aura. Rambo the American was one example, but PJ’s bar had an extremely full flavoured range of nationalities represented. Sifting through the chatter you could hear British, German, Italian and Asian accents: all of them people going places, thrown together for a moment in time before continuing in their inexorable quest to explore the world.

And here we were, a team of investigative journalists, nestled deep within the midst of the enemy, enjoying our own moment of anonymity. Cast adrift on a sea of fine wine and conviviality, the pressures and dramas of the past weeks faded from our consciousness as we absorbed the here and now. “Hey look,” Peter piped, looking particularly pickled after glancing up momentarily from the interior of his glass, “It’s Miss Rarotonga at the bar”. “Yeah,” said Mike, who’d noticed her sometime earlier, “but she’s with Mr Rarotonga”. Fred and Ginger, Charles and Di, Nixon and Watergate – all of them great couples we have come to know and love. Now we were looking at Rarotonga’s own Ken and Barbie, two stunning looking individuals. We wondered who else was going to appear at the already crammed PJ’s when the islands’ former Solicitor-General, Mike Mitchell, stood up to take part in a duet on the keyboard. Would there be no end to the entertainment laid on for us, we wondered?

The merchant bankers were up and dancing – sadly, Billy-Ray Cyrus’ Achy Breaky Heart had even been a hit here. We didn’t leave until they closed the bar at midnight.

Breakfast the next morning was a treat to behold. We’d been up since dawn trying to film pieces to camera as the sun rose – the lighting is particularly soft and friendly at dawn and dusk – and by 8:00am we’d taken our bag of PTC’s up to 11.

Arriving back at the hotel, we plotted our next moves over tropical fruit salad and sizzling bacon, eggs, toast and coffee, ensconced under a cloudless blue sky with the ocean lapping at the white coral sand just metres away.

“I think we should get the local market scenes as soon as they open this morning,” said Mike, dragging his attention back to the task at hand. “And Ian if you can go to the Companies Office and get what you can on European Pacific, we’ll meet up in town after that and knock off the other PTC’s outside European Pacific’s building at lunchtime.”

The previous afternoon we had also slipped in visits to the local newspaper and television companies to check on some information and get video footage of the fire that had burnt down the Cook Islands Company Office in 1992. The tape was due to be uplifted this morning.

As expected, our visit was beginning to cause ripples. Just as we got ready to abandon breakfast the hotel manager pulled up a chair at our table. “So tell me. Exactly what are you all doing here,?” he quizzed. We shuffled uncomfortably in our chairs.

“Ah, we’re up here getting some library footage of the Cook Islands,” I ventured lamely. Wilson picked up the ball and ran with it.

“Yeah, and we’re also doing a story on the Sheraton Hotel project while we’re here.”

The hotel project was something of a national scandal in the Cook Islands. One of the financial advisers was found murdered, and the project itself had been abandoned halfway through construction the year before, after a big anti-corruption drive in Italy. It seems the Italian partners in the joint venture turned out to have organised crime connections and had been arrested back in Italy, along with hundreds of other business leaders. How come this didn’t surprise me?

The arrests brought a complete halt to the joint venture, and the Cook Islands Government was now carrying a national debt of some $200 mil- lion – a large portion of it due to the unfinished hotel.

Our answer to the inquisitive manager of the Edgewater wasn’t exactly a lie, but we could tell from the sceptical look on his face he didn’t buy it. European Pacific, in its heyday, had practically owned the Cook Islands. The last thing we needed was for the merchant bank’s many friends to get wind of our real intentions and blow the whistle.

We were paranoid for another reason too. What we were doing in the Cook Islands was illegal. The tiny nation has very tough laws safeguarding its tax haven operators, and the idea of being stopped at the airport with videotapes and documents clearly discussing not only tax haven business but allegedly criminal deals involving the Cook Islands Government – it wouldn’t have looked good, although admittedly it was momentarily amusing to think of being sentenced to hard labour breaking coconuts whilst on a penal diet of breadfruit and water.

We were in fact lucky enough to escape the long arm of the Cook Islands law on this occasion: another TVNZ camera team following in our footsteps a few months later wouldn’t be so fortunate. In addition, the programme was due to go to air in just three days – our detention would put the kybosh on any hopes of putting it to air before Christmas.

My sojourn at the Companies Office proved a waste of time. Staff confirmed that European Pacific’s files had been destroyed in a suspicious fire in 1992, soon after Peters’ revelations began. A local drunk had been arrested and charged with arson. Despite repeated requests, European Pacific had not replaced any of the missing files by the time of my inquiry at the Companies Office public counter.

If European Pacific’s alarm bells didn’t start ringing when we began filming their building, I’d be very surprised. The EP Centre was now going under the name Standard Chartered Equitor House – but we knew EP still maintained some kind of presence in the building.

We’d left the EP PTC’s until last so as to avoid setting off the tripwire until we were almost ready to board the plane and fly out again. Standing right in front of the EP building, talking about alleged tax fraud, I may as well have been wearing a rhinestone-clad Elvis costume and waving a placard screaming “PICK ME”. It was then that we realised the merchant bankers we’d seen at PJ’s the previous night were EP staff – the faces at the window looked very familiar.

By the time we hit the air terminal later that afternoon, it felt like we’d been there a week. Adrenalin levels rose as we checked out through Customs, but there was no attempt to interfere.

Watching the island vanish out the window as we took off, I had no idea that we would return within a fortnight. I really believed that by Sunday night, the whole story would finally be out in the open. More fool me. Arriving back at work on Friday morning, video cassettes in hand, we were greeted by Norris at our daily planning meeting with an ominous new twist. “I’ve given the script to Brent Harman while you were away. He’s very positive, very supportive, says it’s a great story. However, he’s had to leave the country on business, and he’s asked me not to run the programme until he gets back. He feels, and I tend to agree, that it’s going to attract a lot of flak and he wants to be around to go in to bat on our behalf when it goes to air.” Brent Harman was Television New Zealand’s Chief Executive. A former station manager of Wellington rock station 2ZM in the early 1980’s, he’d moved to a provincial station after one of those many creative-type conflicts that arise in the radio business.

His revenge had been to guide that provincial station to become the country’s number one in its market. It was enough to bring him back in from the cold, and in 1987 he was given a metropolitan position again – turning Auckland’s top rating middle-of-the-road Radio New Zealand flagship, 1ZB, into a newstalk station.

While I’d never worked for Harman, who arrived at TVNZ shortly after I joined TV3, I had some grudging respect for what he’d been able to achieve. I had no reason to doubt Harman’s sincerity on the European Pacific issue, but nevertheless, something didn’t feel quite right. We quickly established he wouldn’t be back for a week and a half, putting off our broadcast date until December 19th at the earliest. A quiet chat to one of the production team in the corridor soon gave us a more in depth analysis of the sequence of events. “Norris and Brown gave Harman the script at the last minute, and we were kind of hoping he wouldn’t open it until he was halfway to Hawaii with no access to a phone. The guy bloody well pounced on it and started going through it with a fine-toothed comb! I don’t like the sound of it.”

My disquiet worsened considerably with a phone call that came in half an hour later. It was a detective who’d cut his teeth in the Police Criminal Intelligence Section, CIS. He’d recently lent me a file on another matter, I assumed he was wanting it returned.

“No, it’s not about that bloody file,” he muttered down the line, “it’s about your bloody European Pacific story. Someone’s given a copy of your script to the enemy. You’ve got a leak and you need to find it. How the hell am I supposed to feel secure giving you highly sensitive files if you can’t keep your secret project secret?”

“Look,” I sighed, “why don’t we meet at the duck pond tonight. Seven OK for you?”

“Yeah. I’ll be there.” He hung up.

Seven pm came and found me wandering around the Auckland domain duck pond trying hard to look inconspicuous. It was a blinding failure.

“Hello Ian,” came a woman’s voice from behind me. I jumped out of my skin. Last time I looked my detective mate hadn’t been a female. Spinning around I recognised One Network News reporter April Greenlaw, a colleague of mine who’d also chosen tonight for a walk by the duck pond. Damn, I cursed to myself, if Dave sees me here talking to someone he’ll probably take off. After exchanging pleasantries I managed to disengage and continue my circuit. No sign of Dave, and it’s already quarter past.

“Hello Ian.” I jumped again – another woman, this time 60 Minutes reporter Pauline Hudson. What the hell is this?, I cursed – Grand Central Station for TV reporters or something?

“What are you doing?,” she asked in her naturally interrogative tone of voice. For a moment I toyed with the idea of saying “would you believe feeding the ducks?”, but I knew she wouldn’t believe it so I didn’t bother.

“Not much,” I lied, “just thought I’d take a walk.”

When I had worked at TV3 Hudson had been my arch-rival. She was then the crime reporter for One Network News, and was noted for her incredible tenacity. We’d once had a helicopter race to the scene of a siege that had an entire town cordoned off – ignoring police airspace restrictions we both touched down in the middle of the town to file reports. There was such intense competition it resulted in another helicopter race back to the nearest Telecom video transmission point – the TV equivalent of a whole bunch of journo’s all fighting to be first into the phone booth.

Later that night we were both waiting in our rental cars outside the police siege headquarters – an old farm building in the middle of a paddock just outside the town. It was just after 2:00am, midwinter, and we’d both left our engines running to maintain heat to the passenger compartments.

Nearly all of the police were out combing the countryside with guns and heat-seeking infrared binoculars, looking for one of the country’s most notorious escapees.

My cameraman, Peter Stones, had gone to sleep in the passenger seat beside me, and in the rear vision mirror I could see Polly Hudson and Alan Silvester were also dozing. When a cop came screaming out of the farm building at a sprint with a rifle in his hand and jumped into his patrol vehicle, I was ready to drop our car into gear and wheelspin off after him. Hearing the commotion and seeing our taillights vanish down the track at high speed, Pauline Hudson was panicked into action and stamped on the accelerator of her car as hard as she could.

“Why aren’t we moving?” she screamed in Silvester’s ear as their car revved its guts out on the spot. “Because,” he replied calmly, “You’re still in neutral.” On another hunt for armed gunmen, Peter Stones and I ended up in motel rooms next to Hudson and her crew, ready for a dawn start. As a precaution, we had placed a carton of milk under Hudson’s back tyre, so that if she tried to sneak out early we’d hear it explode. As it was, Stones and I were first to wake, and we pushed our own camera vehicle 100 metres back up the motel driveway before we started the engine and drove to find the police searchers.

Oh yes, if anyone was going to get suspicious about seeing me at a duck pond, it was Pauline Hudson. Fortunately, Pauline was with her fiance looking for wedding photography venues. She didn’t stick around for too long. There was still no sign of Dave. I decided to try his mobile.

“Where the hell are you?” he answered. “I’m at the duck pond, where are you?”

“I’m at the bloody duck pond too, but I can’t see you,” he retorted.

I looked around, confused, but there was definitely no one around fitting Dave’s description. And then the penny dropped.

“And just which duck pond are you at, my friend?”

“Western Springs. No, don’t tell me – you’re at the Domain duck pond, aren’t you, you dumb-assed bastard!”

You had to laugh. Inspector Clouseau would have been proud. Dave was still chortling quietly when he pulled up beside me 15 minutes later, but the conversation quickly took a more serious tone.

“Like I was saying, about a week ago the shit hit the fan, they even know about it in Wellington. The talk is they got a script out of TVNZ over to TV3 and someone there has given it to Fay Richwhite.”

My heart stopped beating. “What do you mean TV3 got hold of one of our scripts – why the hell would they want it?”

“How the hell would I know? All I know is a TV3 guy was on a plane sitting next to a Fay Richwhite boy last week, and he apparently gave him the script. They were talking about it and were overheard by some of the other passengers.”

My mind was spinning. Trying to figure out what had happened was like tossing a jigsaw into the air and expecting to catch it again in its original formation – damn near impossible.

“They couldn’t have got one of our current scripts,” I reasoned. “They’re locked in the computers.”

“What about a traitor at your end?”

I considered the possibilities and rapidly ruled that option out. It was possible that someone might have picked up an old draft out of the rubbish, but we’d been shredding most of those. Even if they had, the likelihood of a TVNZ staffer passing it to TV3 was pretty slim.

“The only other thing I can think of,” I ventured after a moment, “is a synopsis that I left behind at TV3 when I came to TVNZ. There were only two copies of that document, and Keith Davies and I had one each. But I can’t see him giving it to that crowd. Maybe someone else at 3 got hold of it and took a copy.”

I’d already had bitter experience of that. The more I thought about it the more likely it seemed.

“It’s your problem,” replied Dave. “I suggest you clean it up”.

Which left me with a dilemma. How to approach Keith Davies without approaching Keith Davies. I decided to make a two-pronged attack, utilising Spook and Brian Henry, independently of each other. Both, I knew, had talked to Davies from time to time.

I was actually sitting in Henry’s office listening on the speakerphone when Brian made the call. He played it softly, suggesting a rumour was sweeping the traps that a named TV3 individual had somehow gotten hold of a synopsis and passed it to a Fay Richwhite employee on a plane. Question was, said Brian, if there is a copy floating around of what Wishart’s up to, it would be really good to see it.

Davies knew of the individual named, but ventured that the item in question was not in fact a Wishart synopsis on European Pacific, but instead a script from an upcoming mini-series on the 1984 election crisis involving former PM Sir Robert Muldoon and David Lange.

So the story went, the TV3 staffer had found the script in a rubbish bin at the Wellington courthouse where, apparently, part of the miniseries had been filmed. Keith was genuine in his explanation of cause and effect but, sitting in the background listening, I couldn’t help but feel that perhaps two stories were getting mixed up here. Why would a cop warn about a European Pacific script being purloined, and why would Fay Richwhite want a copy of a miniseries script dealing with events 9 years earlier?

Spook gave Davies a ring later the same day, leaving the poor guy even more perplexed, but still I couldn’t manage to square the circle. My people were adamant it was an EP script, even describing it themselves as a synopsis or early draft.

The waters were later muddied even further when I discovered the Independent’s Berryman and McManus had been gloating about knowing what I was up to and knowing about JIF. Through the traps, the word came back that they too had access to a synopsis left behind at TV3.

When I confronted Jenni McManus she conceded she had seen the syn- opsis, but claimed she’d been told that I OK’d its release to her. Fat chance. Still, it was too late to undo the damage – all I could do was rely on the fact that there was nothing in the document referring to Magnum, and nothing which explained the promissory note mechanism. The intrigue didn’t stop there, however.

As a crime beat reporter, you quickly build up a network of contacts and sources from all walks of life. Drug dealers, bank robbers, hired guns, police and private investigators can all be useful additions to a journalist’s news antennae.

At a loose end, I dialled up a couple of mates at private investigation companies to see if they’d heard the buzz about the script leak. One of them had, but both had something even more significant to report.

Both agencies had been approached by a business executive asking them to “Put Winston Peters out of politics, permanently.” The request came with an assurance that, no matter what the cost, the people the businessman rep- resented wanted Peters utterly and completely disgraced, and they didn’t care what tactics were used – including trick photography. Despite the promise of as much money as they wanted, both agencies had turned down the job. It immediately rang a warning bell within me, as a respected Radio New Zealand journalist had recently boasted to his colleagues that he’d seen a photo of Peters doing an unnatural act.

The latest computer programmes make such composite photos a breeze to create, and the dirty tricks potential is enormous. The photo never surfaced, probably because newspaper editors – well aware of computerised tricks of the trade – would smell a rat.

It illustrated the existence however of an orchestrated conspiracy to discredit the MP for Tauranga, at the same time as many media commentators were ridiculing him as a wacky conspiracy theorist. Someone, with a lot of money, was pulling the strings.

Spook, meanwhile, had been doing some digging of his own into the script affair. What he came up with sent a chill down my spine.

“I can’t find any evidence that a script actually left TVNZ, so I think you’re right in the assumption that it’s an old TV3 one, but I do have some bad news for you.”

He told me that the jungle drums were already throbbing with rumours of our secret documentary. “You won’t be allowed to put it to air. Apparently some guy named Wilson is going to veto it.”

Wilson, I figured, had to be TVNZ General Manager Graeme Wilson, a former journalist who’d given up the pen to take up a managerial sword some years back. I couldn’t see how Wilson would even be involved in something that was between Paul Norris and Chief Executive Brent Harman, so I put little emphasis on Spook’s warning.

Brent Harman arrived back a week later but there was no move to put the programme to air that Sunday. Instead we were using the interregnum to fine tune the post-production on the programme. The graphics showing bouncing money bags had cost the best part of $70,000, and there were other little things that needed tweaking as well.

By chance, Michael Wilson and I bumped into Keith Davies at Auckland airport the following week.

“I hear Graeme Wilson is trying to stop your programme from screening,” he divulged conspiratorially over a coffee. I still had no proof that Graeme Wilson had in any way been called in, so keeping a straight face I told Davies that as far as we knew, Wilson wasn’t involved in the story and had no power to stop it.

“As far as I’m aware, it’s between Norris and Harman.”

Returning from Wellington later that day, our worst fears were con- firmed. Graeme Wilson was involved, and was demanding changes to the programme. What changes? For a start, Winston Peters’ comments had to come out. The production meeting was stormy.

“What right has that jumped up prat got to order us to remove Peters?,” demanded one of the team.

“I know what you’re saying,” came the response, “but they don’t want our programme to be seen endorsing or glorifying Peters in any way.”

What the hell did that mean? Just because Peters happened to be right didn’t mean we were glorifying him. The inclusion of a couple of small comments where he called European Pacific a secret and covert series of companies that defrauded the New Zealand revenue hardly made our documentary “Peters-driven”. Another senior journalist was equally shocked.

“I can’t really believe we’re having this discussion. The man’s the leader of a political party, for God’s sake! If we were talking about taking the Prime Minister out of this piece for political reasons there would be hell to pay!” Everyone present agreed with the sentiment, but the reality was that the programme would not be allowed to go to air with Winston Peters in it. It was a case of compromise or lose the story – end of story. There were to be other changes too. The opening sequence was to be erased – goodbye to Carol’s carefully crafted shadowy figure rifling through a filing cabinet. Too sinister, might give us some legal problems, came the explanation.

“You can’t be serious,” Mike, Carol, myself and Frontline producer Mark Champion yelped, almost in unison. But there was more. Our documentary did not allege Sir Michael Fay was guilty of anything. His company, of course, was involved in what our lawyers believed was a proposed fraud against the Japanese Government, but we weren’t sure at what level within Capital Markets approval would have been required for such participation. We had included a shot of Sir Michael Fay in the 1987 America’s Cup parade in Auckland – now we were being told to take it out as well. Graeme Wilson did not want us casting aspersions on Sir Michael Fay. Fay’s 1987 America’s Cup challenge had caught the public mood, a mood that EPI capitalised on. His photo had been included for no other reason – his success in the Cup was integral to the skyrocketing share prices of his companies, and integral to the public float of EPI.

There was no reason to drop Fay from the story in that context, and to do so would actually detract from public understanding of that segment in the programme.

“This script has been approved for broadcast by our lawyers, on what grounds are they doing this?”

“Well,” came the response, “they feel that we can’t be sure of the facts, that we’re taking on some very respectable businessmen, and that we don’t want to leave ourselves open to lawsuits.”

Bollocks!, I thought. Not only were we being ordered by TVNZ management to remove Winston Peters from the programme because “they don’t like him or his politics”, but they were expressly bucking the recommendations of our extremely highly qualified legal team from Simpson Grierson. To have the executives suggest we couldn’t be sure of the facts was an insult to Gary Muir – a doctorate in tax law – and Professor John Prebble, also a doctor in tax law, not to mention the former Auditor-General, Assistant

Treasury Secretary and IRD tax investigator Brian Tyler.

By Friday, December 17, we’d finally finished most of the surgery on the programme, changing some of the vision and excising Peters28. We all felt unclean and sick to the stomach. Just as we announced the programme was ready for airing, the dynamic duo, Brent Harman and Graeme Wilson, found a new way to make our lives hell.

They ordered us to ring European Pacific and seek comment on our investigation. Not only EP, but we were also to ring David Richwhite, Paul Collins and Peter Travers. Without their responses, the programme would not screen on Sunday. To those of us on the Project X team, it was patently obvious that there was now no chance of the programme going to air on Sunday – the moment we tipped off European Pacific we’d be caught up in the injunction battle.

As I dialled European Pacific in the Cook Islands and asked for David Lloyd, I knew that this might just be “goodnight nurse” to Project X. Somehow, there had to be a way out – a way of saving the project. If such an escape route existed, then come hell or high water we would find it.

“That much I promise you,” I muttered under my breath as I listened to ringing tone on the line to European Pacific.

(page footnote 28 We’d obtained a stay of execution on removing the Fay sequence, however it was subsequently excised in an early 1994 recut. We’d managed to keep a brief parliamentary quote of Peters whilst ditching a more in depth interview clip. Again, in early 1994, Peters was dropped completely but, like Lazarus, featured in the broadcast version in May 1994 as a result of his tabling the winebox.)

Throughout the previous 12 months I had done everything possible to avoid tipping off European Pacific about my investigation, and it was an approach endorsed by TVNZ when Project X began. It really, really galled me to turn myself in to the enemy at the last minute. It felt as though we were being made to surrender.

Although the Director of News and Current Affairs, Paul Norris would later tell Metro magazine that we decided to approach European Pacific for “sound journalistic reasons,” the truth is that we had our backs to the wall. There was no “sound journalistic reason” for us to give European Pacific a right to comment. Our case was not a “he says/she says” mudslinging that required equal input from either side – it was a very carefully crafted story alleging that a company had either planned or committed a prima facie fraud against New Zealand and Japanese taxpayers, based on a fully documented trail examined by a number of experts. A story that would have to stand up in any court of law without the need for European Pacific’s explanations. European Pacific’s predictable response would add diddly-squat to the substance of our investigation – it was almost irrelevant.

By now, those of us working on Project X had lost any illusions that corporate management held dear the same things that we journalists treasured. To us, this was a documentary of major public importance, a story that must be told. To them, it wasn’t. This came as no huge surprise to me – I had been aware for months that corporate and political New Zealand wanted to squash any investigation into these matters. But for those I was working with, Carol Hirschfeld and Michael Wilson in particular – it was an experi- ence that would change their outlook on life forever. Lost innocence would be one way of describing it, shattered illusions – another.

The realisation that they, like most other New Zealand journalists, were just unwitting puppets, being used in a game to divert public attention from the real issues, was a very traumatic experience.

As one current affairs staffer privately noted, “it was one of those things that I didn’t really want to discover first hand. I was sort of happy in my ignorance – until this came along and we couldn’t avoid it. It makes you feel like you’ve been swimming in excrement.”

Up in European Pacific’s Rarotonga office, meanwhile, the alarm bell on David Lloyd’s desk was ringing. He picked up the receiver.

“I think you’re barking up the wrong tree, Ian,” he ventured as soon as I’d explained we were doing a story on the creation of misleading tax certificates.

“We were thinking perhaps of the Magnum deal of 1988,” I continued.

“I think someone’s trying to put a connotation on something that is different from what it is.”

“Alright, help me out here – What’s the connotation that it should be?,” I asked.

“Um, look, I’m quite happy to sit down and have a talk to you about this at some stage, but I don’t think trying to deal with it over the phone is the most appropriate. Are you under any time urgency on this?”

I wasn’t, at this stage, prepared to tell Lloyd we were going to air on Sunday, so I just got more specific in the questioning. “What I’m thinking about is the transactions between European Pacific – particularly Dundee and EPMF and the Cook Islands Government Property Corporation, which was a pre-arranged loss for the Cook Islands Government.”

“Ian, look, as I say, I’ll sit down and talk to you. I don’t want to talk about it on the phone – I don’t think it’s appropriate. I’m sure you realise that there’s a number of issues as far as we, as an organisation, in terms of what we’re permitted to say by law or what we’re prepared to say ourselves. I’ll be in New Zealand next week. I can see you on Wednesday.”

Everyone, including Norris and Brown, gathered around in the Project X editing suite to hear the conversation replayed. Norris’ gut feeling – and one that I concurred with – was that we should fly back up to Rarotonga to speak to David Lloyd mano a mano – face to face. He and Shaun exited at this point, leaving us to discuss logistics.

Just as we were doing so, a fax hit the desk from European Pacific’s lawyers, Rudd Watts and Stone. It was addressed to Brent Harman but had been cc’d to me as well.29

“Dear Sir,” it began, “We are aware that there have been recent discussions between yourself, Mr Geary and others concerning a proposed current affairs television programme on, inter alia, the European Pacific Group and some of its business activities.”

The others in the room must have sensed my utter disbelief. “What’s wrong?”

“It’s this letter from EP’s lawyers. It says they are aware of – get this – recent discussions between Harman, Norman Geary and others about a quote proposed current affairs television programme unquote on European Pacific. “I never mentioned anything to David Lloyd about Brent Harman or

Norman Geary – hell, I didn’t even know Geary was involved!”

The implications were serious. Not only had the programme been discussed by TVNZ’s Chairman of the Board, Norm Geary, but European Pacific and its lawyers appeared to be aware of the content of those “recent” discussions. And this was before we even told EP we were doing the story.

Exactly what gave the Chairman of the Board the right to interfere in a news story, I wasn’t sure. Perhaps Geary’s involvement was entirely proper – maybe he’d been rung by EP or a politician asking him what the hell was going on, and he’d referred the matter down to Brent Harman.

But who were the “others” that were briefed, and how did EP come to know about all this? What had been said? The letter went on to remind us of the injunction already in place, and that we were bound by it.

“OK,” said Norris later, mulling it all over but adding nothing further on the latest development, “Ring back Lloyd and tell him we plan to go to air this Sunday, offer him a right of reply.”

Predictably, Lloyd’s response was negative.

“I understand your position Ian, but I’m not prepared to do things out of context. I’ve offered to sit down and go through it with you but I’d like to do that in a balanced way where I’ve got an idea of what you’re doing.” “Essentially there appears to be a secret transaction with the Cook Islands Government, was there not?”

29 See Appendix

“I’ve already told you my views on that. People are trying to put connotations on something and misunderstanding it.”

“Alright, I’ll diverge from that briefly. The directors of European Pacific Trust and Banking Group Ltd, during 88/89, did they include David Richwhite and Paul Collins?”

“Ian, I’m not going to discuss it on the phone, alright?” “We’ve got to go to air on Sunday – ”

“Well, Ian, I should point out to you that in relation to the transaction you discussed with me earlier, that transaction is specifically covered by the present, interim injunction.”

“Yeah, I’m merely asking you the question as a journalist,” I explained cautiously, not wanting to make any concessions that could weaken our position. “I’m not discussing the legal aspects of it one way or the other.”

Nervous laughter broke out at Lloyd’s end of the phone.

“The legal aspect of it is that there’s a court order preventing publication or discussion of any material in relation to that.”

Lloyd would later misquote me in his affidavit to the High Court, saying “I reminded him of the injunctions in place, and he indicated to me that that had nothing to do with him, he was just a journalist.” As will be noted from my careful answer to his question, I didn’t say the injunction had nothing to do with me, I simply was not going to be drawn into a legal argument on the phone – dangerous territory when talking to a lawyer. Lloyd’s later testimony is an example of how one’s comments can be twisted to put one in a bad light in the eyes of the Court. Judges are not particularly fond of the media, they’re even less fond of journalists who say the law has nothing to do with them.

“Did the Japanese Bank transactions go ahead?” I pressed on.

“Ian, I’m not going to go into that on the phone. If you wanted to have a talk to me in a proper way about your programme, you could have done it before today.”

“Yeah, but the injunction – I note that we had a fax straight away after our conversation this morning – ”

“Of course, and I’m happy to sit down and discuss that with you. If you’d wanted to have appropriate comments from me, you could have contacted me in plenty of time for it to be done in the normal manner.”

“So you would deny that any misleading tax certificates have been created?” “Of course! Obviously I deny it.” We parted company at this point, Lloyd reminding me that if we tried to race ahead and do our own thing it would end up being debated in “a different forum” – a reference to court.

Of course, I knew damn well that approaching Lloyd earlier in the piece would have been fatal to the story. There was never going to be any negotiation by EP on the central point – the use of the company’s confidential documents. Asking Lloyd for input would inevitably have led to an injunction or, worse, the cancellation of the project in its infancy by TVNZ corporate management. I had already seen that happen at TV3. The extreme secrecy surrounding our work at TVNZ had been beneficial not only in keeping EP at bay, but also making the programme a fait accompli by the time the General Manager, Graeme Wilson, saw the script. We had already spent probably $200,000 on production and legal costs by that point.

The second conversation with Lloyd had changed nothing – we still had the invitation to discuss it in person, so we decided to exercise that option. Up on the 7th Floor of the TVNZ building, however, other plans were afoot. EP’s lawyers were seeking, and gained, assurances that the programme would not run until we had met David Lloyd to discuss it. Unlike the NBR and the Independent, which had been injuncted without prior notice, EP’s lawyers seemed more than happy to accept TVNZ’s assurances. The tax haven bank made no move to injunct us.

Given the already strenuous efforts being made to castrate the programme, it wasn’t hard to imagine further attempts to sink it without trace before an injunction was even laid.

Twenty four hours before our flight, I took out a journalistic insurance policy. Figuring that the European Pacific programme was in danger of being permanently iced by the corporates on the 7th Floor, I tipped off the Sunday Star’s television columnist, Toni McRae.

“Look Toni, I can’t tell you why, but it’s absolutely imperative that you get a story up in tomorrow’s paper about this investigative documentary we’re working on – but it can’t look like the information came from me.” “I’ll do my best,” she answered, sounding confused, “why – what’s this all about?”

“OK, we’ve been doing an investigation into that company Winston Peters has been rabbiting on about in Parliament. It’s called European Pacific, and it was owned by some major bananas like Fay Richwhite, Brierleys and the BNZ. I can’t tell you what’s in it but it’s a major investigation.

“The problem is, we’ve been so secretive about this programme that no- one knows we’ve done it, and now there’s a danger it could be stopped. We’d be really grateful if you could write a line saying it’s expected to screen next Sunday.”

McRae asked a few more basic questions, before adding one final request.

“By the way, what’s it called?”

“It doesn’t have a name, but its nickname is Project X.”

It was with a huge sense of relief that I opened up the paper the next morning and found Toni’s report on page 3.

Frontline will screen a documentary next Sunday which has been dubbed inside TVNZ ‘Project X’. Financial sources say the film probes European Pacific (EPI), the Cook Islands tax haven company which first came to the fore when Winston Peters made allegations about the BNZ in Parliament last year.

“European Pacific was listed in 1987 on the stock exchange and was owned by the BNZ, Brierleys and Capital Markets. A number of injunctions have been served on print media attempting to investigate the company.”

It was only two paragraphs, but it sent a ripple of fear through certain circles. More importantly, for the first time it was acknowledged publicly that a documentary existed. If it didn’t screen, people might start asking questions. It was also a throwing down of the gauntlet to the corporates: “Mess this up boys, and there’ll be blood on the floor publicly. We won’t be taking prisoners.”

It was, in effect, a declaration of war. I didn’t stick around to monitor the aftermath internally – we had a plane to catch. Michael Wilson, Peter Day and myself flew back up on that afternoon’s flight. With luck we could fax back Lloyd’s responses to our questions and incorporate them at the end of the programme. By meeting him face to face, we would have fulfilled our commitment to sit down and talk about it – the programme could run on Monday night.

We had discovered during the second call that Lloyd was staying at the Edgewater Hotel, so we booked ourselves in there again. No one was more surprised to see us return than the hotel manager who’d been so inquisitive the first time around.

“What are you guys really doing? Is this about our tax haven?”

Politely declining to comment, we began to feel we were fast wearing out our welcome in the Cooks. David Lloyd had a lot of friends there.

When we rang David Lloyd at 8:30am the next morning and told him we were in town, you could almost hear the thump as he fell out of bed. This was one trick he hadn’t expected us to pull.

“We thought rather than wait until Wednesday we’d come and see you up here, when can we call around?”

He consented to see me at 10:00am, no cameras – but it would be an on-the-record interview. “Gotcha!,” I gloated as I hung up the phone, before dialling TVNZ for any last minute orders. “I’ve got the microcassette recorder with me,” I told Shaun Brown, “do you want me to go in wired?” “No, not this time. Play it by the book. Take your recorder along, ask him if you can record it, but leave it off if he insists.”

It was a decision that even today Brown cannot believe he made. He spent the next few months mentally kicking himself, because it turned out to be a crucial conversation and it would have been handy to have a transcript for the court case. Instead, I went in alone, and the tape recorder remained turned off. Lloyd was staying in one of the hotel’s full size apartments with his wife, Kay. It was the first time I’d actually met the guy – we had tried and failed on the earlier visit to find a picture of him at either the TV station or the newspaper. We talked for an hour – Lloyd opening up with surprising candour.

“I’ve never actually been interviewed before,” he confided, “you’re the first journalist who’s ever come to see me about this matter.”

Lloyd’s innocence in dealing with the media became painfully transparent as the interview progressed. “I’m happy to answer any questions you have, but don’t expect me to give you any information you don’t already have,” he warned.

OK, I thought, let’s try an easy bluff first up. Exactly who controlled the Cook Islands group during the time it was owned by the secret trust – it was a question that had been gnawing at me for weeks. I wanted to know whether Richwhite, Collins and Travers were effectively in control, despite the ownership sleight of hand.

“Alright,” I began, “The European Pacific Trust and Banking Group Ltd: I’ve got the directors listed as yourself, David Richwhite, Paddy Marra -”

“No, no,” Lloyd quickly corrected me, “Paddy was just an alternate for Paul Collins. Paul was the appointed director for Brierleys. I was Managing Director, David was Chairman, and we had Peter Travers30 on board as well.” For a man who wasn’t going to tell me anything, David Lloyd had just been incredibly helpful. I felt I was pushing my luck when I asked if they’d all remained on the board from March 1988 through to December 1989 – the crucial period when the Magnum and JIF deals were initiated. David

Lloyd didn’t see the trap and fell straight into it.

“Yes, we all stayed in the same position,” and then the penny clanged to the floor. “Ah. I see now where this might be leading. If you’re implying

(page footnote 30 “Witness A” told the Davison Commission in August 1995 that Peter Travers may not have been aware of much of what was going on. He also stated that Brierleys had not been involved in the JIF deals in any way, although I presume as part owners of EP they would have indirectly benefitted from any profits.)

that my fellow directors were somehow responsible for individual transactions, I can assure you that’s not the case. David Richwhite and Paul Collins certainly did not know about the Magnum transaction.”

Lloyd explained that directors were generally not consulted about the specifics of a particular deal, unless the transaction exceeded internal credit or prudential guidelines. On all other occasions, he said, the deals were crafted and approved by “an executive committee of the bank, comprised entirely of employees.” He did concede that “there may well have been discussions about the general principles” of a deal structure at board level, but not specifics.

Asked about the JIF deals, Lloyd became evasive, saying that because they had no revenue impact on New Zealand, he would prefer not to comment further on them. He didn’t deny that the documentation showed EP was clawing back the tax money paid by the Japanese Banks, but when I asked him if the Japanese banks knew EP was doing this he again refused to comment.I tried another approach, asking him if the directors had been informed of the structure of the Japanese deals, given the large amount of money involved.

“They are large amounts of money, he agreed, “large to anyone, but you must remember the criteria is the risk being taken by EP. You shouldn’t be blinded by the huge amounts of money involved. If there was no risk to the group, the directors would not have to be involved. Just because there’s big money doesn’t mean they [the directors] were a party to devising them [the schemes].” In fact, in the Mitsubishi deal at least, the documentation on the deal acknowledged that European Pacific was indeed taking a credit “risk” and that prudential limits were being exceeded. If Lloyd’s definition was strictly adhered to, the directors should have been informed, although we have no evidence that they were alerted.

As the interview drew to a close, David Lloyd explained that European Pacific could not be wound down until mid – 1995 at the earliest, because of a number of deals that had set times still to run. When I asked if this included JIF deals, he again refused to comment.

Almost wistfully, he added that he didn’t want his company’s corporate behaviour in the 1980’s judged by the new morality of the 1990’s, and he was insistent that the Magnum transaction didn’t break New Zealand law. “There was no requirement on us to tell the New Zealand Revenue that we got the tax money back. That deal was not illegal.”

Perhaps realising that his honesty with me might cost him later, Lloyd added a warning.

“You must realise, I am going to try and stop you using this.”

We needed him to do more than just try. A discussion with my Frontline colleagues had confirmed they too had serious concerns that we were being set up to take a fall. I quickly formed the view that we were going to have to force European Pacific to injunct us – that way the whole issue would go before a court and be taken out of the hands of the state television network. Once it was before a judge they would be very hardpressed to kill the project. The only way to achieve that was to undermine whatever assurances had been given to EP, and the only way to do that was to terrify David Lloyd with the prospect of imminent publication. Yet even then our Machiavellian scheming had a downside – we didn’t want Lloyd taking court action today, because that would rule out any chance of screening the documentary tonight – our last “window of opportunity” before next Sunday.

“And you must realise,” I told Lloyd, “that we fully intend to broadcast this programme as soon as we’ve completed our filming requirements here in the Cook Islands.”

We both knew the next plane out was the next day, and we both knew we were all booked on that flight. I guess David Lloyd figured he had 24 hours to work with. I wasn’t content, however, to leave him stewing solely over our interview. As soon as we’d faxed details of the conversation to Auckland, I whistled up the camera crew, and we proceeded to stake out his apartment. It was the rainy season in Rarotonga, I lost count of the drenchings after six warmish tropical downpours. We lurked around his unit for six hours until he finally returned. Spotting his car making its way down the drive in the rain, I called Peter Day away from his monotony-relieving attempt

to smash open a coconut.

Day leapt to attention, grabbing his camera in a fluid motion and whisking it up to his shoulder. Michael Wilson stood there in his sunglasses in the rain – looking for all the world like some kind of tropical hood.

It was then that we realised David Lloyd wasn’t driving, and was instead in the passenger seat. It was then that Lloyd realised we were trying to take his picture, and asked his wife to turn around without stopping and drive back out.

Too late, Peter Day twigged to the fact that he hadn’t been filming the right person and tried to leap around the other side of the car, but he couldn’t get there in time. It vanished at a reasonable clip back down the drive. If that didn’t spook him, nothing would.

Back in Auckland, things were looking promising for the programme to go to air. It was a weird kind of feeling. The production that had overtaken our lives was finally due to be broadcast, and here we were, stranded in paradise with no television set to watch it on.

While the Cook Islands took a satellite feed of TVNZ news each night, Frontline was sent up on videotape, and generally screened in Rarotonga about two weeks behind the New Zealand schedule. We’d had no time for dinner so, settling down with beers and bags of potato chips, we dialled up Mark Champion. The news was all bad.

Project X was being slotted in at 9:30pm, Monday night New Zealand time, in place of the Primetime mid evening news bulletin and subsequent comedy show. However, Wilson and Harman had been locked in the conference room with Paul Norris and Shaun Brown, demanding yet more changes to the programme. Carol Hirschfeld and Mark Champion were not permitted to take part in those discussions.

Wilson and Harman had first appeared in the newsroom around 7:00pm that night, ostensibly to approve the final mix of the programme that had just been completed, ready for transmission. As they watched in the edit suite, the first item to fall foul was the “mood music” in the opening sequence. Get rid of it came the order.

“Oh Paul, you haven’t!,” Brent Harman had said to Norris despairingly when he heard the music, burying his face in his hands for a moment. Harman had been involved in the internal inquiry into For The Public Good, and one of the main recommendations from that inquiry had been to avoid the use of sinister music.

It was a farcical recommendation, of course. If we were factually correct the ‘sinister music’ would have no impact on a defamation lawsuit. If we were factually incorrect, we would have bigger things to worry about than whether the music was appropriate.

A few minutes later – probably faster than expected – the music in that open- ing sequence had been removed, but instead of giving the go ahead, Wilson and Harman summoned Norris and Brown back to the newsroom’s confer- ence area for a private pow-wow. Journalists and producers watched in awe through the floor-to-ceiling glass as an at-times heated exchange took place. When they all trooped out, a new problem had surfaced. There was more music further down the programme. It too had to go. At 8:30 pm, the Primetime staff had been sent home, including anchor Maggie Barry. It looked as though Frontline was definitely going to run its special inves- tigation. Forty minutes later, only 20 minutes before they were due on air, the Primetime team were called back. Standby they were told, it looks like Frontline won’t fly.

Right up to the final minute Carol and editor Nic Craig had been furiously hacking the programme and reassembling, each time going back to the conference room to announce it was ready for screening.

I could see why Harman might have been feeling overwhelmed and panicked. It wouldn’t have been helped by Graeme Wilson’s subtle needling of him.

“It’s your decision Brent,” Wilson would say with a shrug of the shoulders. “Are you sure you want to run it Brent? It’s on your shoulders, Brent.”

At 9:25 Harman and Wilson discovered a new problem – Wishart’s voice in one of the pieces to camera sounded too rushed, it couldn’t go to air like that. To us on the production team it was another utterly asinine excuse for pulling the plug, given that the changes already demanded had made the programme much harder for viewers to follow and understand. A slightly fast voiceover for 10 seconds was nothing compared with the workover the programme had already received, but it was enough to stop the countdown. The abiding impression left with staff working that night was that management had simply been stretching out the recuts: rather than coming to the meeting with a list of everything they wanted changed, and getting it done at once, everything was instead drawn out to the point where it was too late to run the programme. It was also the first time that tape editing staff could remember the Chief Executive and his 2nd-in-command coming down to personally vet a news and current affairs programme.

Launch was abandoned – at 9:30pm it was Primetime, not Frontline, that screened, and the rest of New Zealand didn’t have an inkling of the battle- royal behind the scenes.

Television New Zealand’s two most senior executives had pre-empted the screening of a programme cleared by the best lawyers and tax experts in the country, a programme clearly of major public interest. Simultaneously – separated as they were by thousands of miles of ocean – members of the Project X production team were dumbfounded.

With nothing left to lose we would throw everything the next morning at scaring European Pacific out of the water – if we couldn’t drive them into court we could kiss goodbye to any hope of ever breaking the story.

The unspoken thought in all our minds: if we couldn’t salvage something from this “Valley of Death”, we’d end up in our own “Charge of the journalistic bantamweight brigade”, not a mantle any of us were keen to wear.

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