Exchange Rates, Secret Accounts and Pecuniary Interests

The comment below on KiwiBlog got me thinking.  Isn’t this precisely the sort of conflict that the pecuniary interest register was designed to deal with?

This money has been sitting offshore presumably while he waits for a more favourable exchange rate to move it back, something he has been strongly advocating for in parliament and elsewhere.

Does knowing that Shearer has possibly hundreds of thousands of dollars resting in an offshore account cast his crazy exchange rate ideas in a slightly different light?

Colin Espiner meanwhile absolutely nails Shearer’s dirty little secret account problem.

I don’t know about you, but I’m forever forgetting about my offshore bank accounts with large amounts of cash in them. It’s a job to remember to tell the IRD about it, let alone to declare them where I might have a conflict of interest.

But then, I’m not an MP. More particularly, I’m not the leader of the opposition, nor the head of a party that has made something of a habit of calling for the heads of other MPs whose memory has been somewhat imperfect.

David Shearer claims he “forgot” about his account with Chase Manhattan Bank in New York City when he came to declare his financial interests to Parliament, as is required under the MPs’ Register of Pecuniary Interests. 

Well, we all make mistakes, and none of us are getting any younger except policemen. But Shearer didn’t just forget the one time. He forgot four times in a row – 2009, 2010, 2011, and 2012.

To compound matters, though he forgot to disclose the account to Parliament and therefore to the public, he did remember to tell the IRD about it. He also remembered to tell Parliament about his other bank account with Westpac.

Given that only accounts with more than $50,000 in them must be publicly disclosed, it’s highly surprising that this slipped Shearer’s mind. Either the Labour leader is extremely forgetful, or he has a lot more money stashed away than any of us thought.

We don’t know the actual amount, since Shearer hasn’t disclosed that, because he doesn’t have to, but it could be considerably more than $50,000.

Does it really matter that Shearer didn’t tell Parliament about his offshore bank account? Well, yes, actually, it does.

It does matter. Shearer and his party went on and on and on about “brain fades” making people unfit for office.

* It makes the Labour leader look like a hypocrite. Much fun was had by all taunting Prime Minister John Key about his faulty memory over the Kim Dotcom fiasco last year. Indeed, Shearer himself laughed that Key had “the year of the brain fade” and that “the PM’s memory went Dotgone”. He also accused Key of “not telling the truth”. And Labour mercilessly pilloried ACT leader John Banks over his memory about receiving donations from Dotcom, claiming he had “lied to New Zealanders”.

* It undermines the picture Labour has painstakingly assembled of National as the party of easy money and loose financial morals. In 2010, Labour’s attack dog Trevor Mallard was calling for Attorney-General Chris Finlayson to step down over a non-disclosure in his own pecuniary interests. And who can forget the mud slung at Key by Labour over his ownership of shares in TranzRail, which he did not declare before rising in Parliament to ask questions of the company while leader of the opposition?

* It knocks Shearer off his pedestal as Parliament’s “anti-politician”, a position he and Labour’s PR flaks have been keen to occupy since his election in 2009. Shearer, and Labour, have played up his credentials as the former aid boss and humanitarian worker who has no time for politicians’ lies and silly games. And yet he appears to have been doing precisely the same thing as everyone else.

Espiner doesn’t think Shearer lied to parliament. I think he did. He lied by omission and he omitted the details because quite simply they are embarrassing for the leader of the workers party to be sitting on a rather large sum of money while making up stories about painters on roofs, secret GCSB video tapes and now his fanciful story of doing his tax returns with the missus.

The tax return story was the one that got me. I was worried about this so called my accountant and they wondered why I was worrying about it before the tax year even finished…they said I had a further year after that too…so just what was Shearer doing with his missus because it was unlikely to have been his tax returns, since they aren’t due and the tax year isn’t complete.

The quantum of the amount that Shearer “forgot” is now becoming critical. It would be interesting to know what his forgetful threshold is. We now know it is more than $100k…but imagine if it was $500k, or even a million…who “forgets” those amounts?

David Farrar runs some calculations:

According to the UN, the salary of a senior manager in a Middle East post would be around US$190,000 a year. Now consider that this is tax free, and that when you are on assignment basically all your living and travel costs are work expenses. So the vast majority of your salary can be saved.

Shearer worked for the UN from 1989 to 2000 and 2002 to 2009, which is a total of 18 years. The total UN salary over that period could have been a bit over US$3 million tax free and expense free. To have an account balance of only US$60,000 means you saved only 2% of it. If you saved 20%, then the account might have over US$500,000 in it.

Now that is a lot of hooter for the leader of the workers party to be forgetful of.

 


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  • blazer

    he should move it to a mirror trust,that would be the um…right way to go about it.

    • In Vino Veritas

      Remember this one blazer? “get real Capt America suffers from selective amnesia”
      or this?
      ” Key has a poor memory”

      I guess what goes around comes around huh?
      No apology yet blazer…..

      • blazer

        I remember…so what!Who do you want to apologise?

        • In Vino Veritas

          No surprises here blazer, you suffer from selective amnesia and poor memory.

          • blazer

            are you trying to talk me into going into …politics!

          • Macca

            Yeah – you’d do real well with your mates on the left. From the stupid, ill-informed comments I’ve read from you on this blog, you sound like a complete wanker!

          • Dave

            Hell Blazer, i second Macca. As IVV says, selective amnesia, you sound as well qualified as Sheep Shearer, so hell yes, I nominate you tap your mate Trev Duck on the shoulder and run in Wainui, or go independent in Helensville. Probably be good entertainment Blazer.

          • Mediaan

            Ha ha.

  • I wish I had problems like Shearer. I’d have no problems with everyone laughing at me because I forgot where I put half a million dollars.

  • ConwayCaptain

    The tragedy is that the Workers Party is no longer run by people who have worked their way up from the shop floor. Many educated by going to evening clases and getting experience on the shop floor.
    It is niw run by well heeled chardonnay socialists with little or no experience in the real world. As Damien O”Connor described them Gays Lesbians and self serving unionists with a few failed lawyers thrown in.

    • Dave

      Not sure I agree Captain, i mean Shearer worked for the UN, so he was a worker, i mean, he only received a couple of 100k a year tax free, thats almost inline with the POA wharfies in a good year and reasonably close to his mate Cecil Walker.

  • BJ

    What’s laughable about this is that $500,000 or $1 million+ will become the story that everyone remembers. I’d hazard a guess he missed the boat when the exchange rate was favourable, he’s been uncomfortable about this secret for a long time, he needed to face the music before it got too close to the election and he’s lining up for some of those power company shares he’s been so coy about whether his party would buy back or not. Convenient he had not disclosed his US bank account when harping on about messing with monetary policy. Instead of just pumping this to embarrass him shouldn’t he be investigated for motive.

    It might be timely for some investigative journalist to delve into Shearers backstory – what he really did over in the Middle East. Having seen his photo opportunities as Labour Leader got me thinking that maybe the images we have seen of him on ‘the food truck’ might just be the only time he’s been near the ‘front line’ of the UN aid programme – if he’s spent most of his time employed by the UN sitting in a cosy office, once again his followers will be very disappointed to find out he’s not the man they thought he was.

    • Ronnie Chow

      Shearer may well be a two faced actor . Caution is advised.

      • blokeintakapuna

        Two faced – yes. Caution is definitely advised.

  • Ronnie Chow

    Well , the IRD knows .Leak time , somebody .

    • sandynobb

      IRD should do some data matching with the pecuniary interests register.

    • Mediaan

      I think the IRD just leaves him to declare that any other money overseas has been taxed by a different administration, doesn’t it? No need to state sum…?
      I assume he has been paying US tax, and holding on to his US pension rights. That may be the real reason for leaving it there – the small sum of interest keeps him on the US pension books. He might have seen himself as going back there in the future.
      Does he also have a house or rent-protected apartment in the US or Europe? The “rent-protected” thing is a common lurk for favourite pretend socialists. They can sublet it to a friend for no-profit, and hold on to it for decades. Meanwhile the poor owner has to maintain it, possibly some quite poor old person who got caught in city regulations and couldn’t sell.
      There can be no doubt he is a millionaire, in any case, like a large proportion of Labour’s caucus. This does not look good alongside his populist rhetoric.

  • Ronnie Chow

    I think Shearer fUCKED ON THIS

  • rockape

    If I had money stashed in an overseas account earning nothing , and a mortgage paying 5% I don’t think I would forget the overseas account. If I was banging on about the register of interests I wouldn’t forget I had a large wadge in an overseas undeclared account. IF I was the leader of Labour and wanted to look like a working class man, I would keep it quiet that I had a large sum overseas and was waiting and hoping and even promoting a drop in the Kiwi dollar that would make my overseas account worth much more! Not memory lapse here, an outright lie and he has been caught!

    • rockape

      P.S.I don’t want Shearer to resigne ;yet! He is just so good for National!

  • the longer he waits before he says how much is in it, the bigger the amount people are going to speculate is in it.

    Now the actual amount is really none of our business, save for the fact that if it’s over $50k he has to declare the account’s existence.

    Now legitimately interest on the account could have just tipped it over the $50k mark (but then you wouldn’t say have just “forgotten” about it).
    And from what has been said it is significantly more which would mean it hasn’t just tipped over $50k because of interest.

    Now because it of his dodging the details about it, added to his repeatedly attacking anyone else who claims to have forgotten something., from a PR perspective he has to seriously consider releasing what the amount is. The longer he leaves it the more damage the speculation will do to the remnants of his reputation.

    I bet he’s really regretting having forgotten his pledge not to play gotcha politics.

  • JC

    Now might be a good time for DS to demonstrate his patriotism by putting say, $500,000 into the Mighty River Power float.. you know, the one that had 400,000 patriotic “hard working” Kiwis sign up for in what.. 10 days?

    Registration isn’t a problem.. after all, thats been done by his staff who know he tends to forget such things.

    JC

    • Joe Bloggs

      I suspect that his colleagues would prefer he put the first mill or so into bailing out Labour …

      there’s a thought, he could well have squirreled enough money away in his secret offshore accounts to buy the party outright!

    • Dave

      Wont happen JC, he would need to remember to register…… Great Sheepish excuse in a few weeks, I er, um …… Forgot to register.

  • blokeintakapuna

    When does the USA tax year end? Maybe he was trying to sort his taxes… Just not his NZ taxes?

    • Shadiness

      Not sure about USA tax year – but I’ve just finished our accounts for 2011/2012. Certain accountants seem to have agreements with IRD to file one year later. I’m going to try and get the 2012/2013 done earlier this time – brain fade!

      • Callum

        IRD has filing targets with all tax agents that spread the workload throughout the year. Final deadline is 31 March of the following year rather than the general public rule of 7 July. Note, this has been in place for decades.

        In this case as an individual he MUST be on an agents list in order to be dealing with 2012 at this time of year, in which case he is screwing up his agents stats by taking so long to hand over his info on a basic individual tax return with a standard 31 March balance date. Very inconsiderate, personally if I was his agent and he screwed around this much I would have just removed from the agency and made it his problem.

  • johnbronkhorst

    Question time in parliament:
    Question (by John Banks) to the minister for SOE’s: Would it be possible for a NZer, with a registration of interest posted, be able to buy shares in Mighty River Power from a secret overseas bank account?

  • cows4me

    Poor old Shagger, time for new billboard. I’m a very, very, very, very, very, very, very, very rich prick. Footnote: one very = $60,000 the New Zealand Liarbore standard for a rich prick.

  • Shadiness

    Just one thing that proves he was lying about forgetting/overlooking (I believe) the declaration of his bank account, he DID remember to register his interest in the UN Pension Scheme.

  • Sir Cullen’s Sidekick

    This has no impact on Rouge Morgan poll….Sheep’s toxic coalition is on track to victory…this will blow over soon…Cindy is leading the fight back bros.

    • Mediaan

      I don’t think Cindy has vote catching appeal.

  • LabTested

    NZ$50,000 at feb 2013 exchange rates = US$42.000, so the minimum balance of his US account

    US$42,000 at feb 2012 rates = NZ$50,300
    US$42,000 at feb 2011 rates = NZ$55,100
    US$42,000 at feb 2010 rates = NZ$60,200

    So in the four years fince feb 2010 Mr Shearer forgot that he had a 17% loss on his overseas bank balance due to exchange rate movements.

    If you go back a further 12 months. The feb 2009 rate means US$42,000 would be worth NZ$81,500. So he lost 39% of the value – at least $31,500 and was not aware of this when arguing for government intervention in the NZ$ exchange rate.

    and how much did he really have. How big was his real FX loss.

  • Edwin Wigmore

    Does anyone know how this came about? By that I mean, what caused Shearer to finally admit this.

    I suspect he learned he was about to be exposed and so felt it necessary to preempt it to try to minimise the damage. If he was exposed involuntarily it would be an even worse look.

    • Mediaan

      It is halfway between elections. Harold Wilson rightly said, a week is a long time in politics. Things get forgotten.

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