Sensible and rational answers to stupid and irrational Media party campaigning

The first person the Media party have attempted to name and shame for daring to be a lawyer/accountant working with trusts, Roger Thompson, has responded to silly questions from Radio NZ.

His answers show just how out of depth the Media party are in reporting legal and complex issues such as trusts and financial matters.

You, Bentleys and Mossack Fonseca NZ are extensively named throughout the “Panama Papers”. How do you respond to that?

I have provided professional services to Mossack Fonseca NZ. This includes acting as a professional director of an associated trustee company.

Looking at the data it seems that a relatively small number of trusts or companies have been established in New Zealand that are related to Mossack Fonseca.

In fact New Zealand does not feature in the 10 top jurisdictions. See the chart labelled “The 10 most popular tax havens in the Panama Papers”.

I think the painting of New Zealand as a tax haven has been grossly exaggerated.

And irresponsible. The Media party are actually putting people at risk with their egregious breaches of privacy. Worse they are claiming some higher good, and moral equivalence for doing claiming “public interest”. Most of the public will have eyes glazed over with boredom as this shabby little hit takes place.  

Are you a “director for hire”?

Like many accountants and lawyers I will accept professional director appointments for well regarded clients after undertaking satisfactory due diligence.

See what the Media party does…they try and coin a phrase that sounds bad…like “gun for hire”, in this case it is “director for hire”. Are they seriously suggesting that people should do jobs for free otherwise there is some ulterior motive? Do they get paid for their writing and publishing? No…are they in effect “wordsmiths for hire”?

Do people use your services to limit their tax liabilities or to deliberately keep their identities secret? Are there other reasons for offshore individuals establishing commercial entities in New Zealand?

New Zealand citizens are possibly the most prolific users of trusts in the world. There are a number of reasons, the most common being the preservation of wealth.

Business people commonly use trusts to separate private assets from business assets that may be at risk to business creditors, other people use trusts to keep family assets protected from claims from spouses or de facto relationships, spendthrift children etc., and additional flexibility and protection in passing assets to future generations as opposed to keeping assets in their own name to devolve by will subject to challenge by family members.

Prior to the abolition of estate duty, trusts were commonly used to hold assets likely to increase in value so as to protect that increase in value from estate duty.

The use of trusts for the purposes mentioned above is common practice and well accepted as legitimate.

Wealthy people in other countries have these same reasons for using trusts. There may also be a prevalence of kidnapping and blackmail in their country of residence, forced heirship laws (lack of freedom to choose who inherits their wealth when they die) and possibility of arbitrary state seizure of assets. The family and their businesses may be spread geographically and be subject to multiple laws in multiple countries. These are all situations where a trust can offer protection and flexibility.

However many countries do not have laws which enable the creation of trusts. Trusts are typically only found in countries that have adopted the English common law type systems such as UK, commonwealth countries and the USA.

For people in countries that do not have trusts they will need to consider trusts established in other countries that do have laws under which trusts can be created.

There are a number of choices including New Zealand.

New Zealand is attractive because we have good trust laws, a good independent non-corrupt judicial system and are stable economically and politically.

Another key factor is that NZ does not impose an additional layer of tax on foreign income of trusts where the settler of the trust is non-resident. There is nothing sinister or improper in this.

In my experience the use of trusts for tax evasion is not common.

Often a trust will own shares in a company carrying on a business which is paying full tax in the country in which the business operates.

The beneficiaries declare and pay tax on any income that is allocated to them by the trust. There is no tax evasion occurring by using a New Zealand trust in such way, rather a New Zealand trust gives the client the legal benefits of a trust without imposing additional taxes on them.

This is a perfectly legitimate and proper use of New Zealand trusts.

We do not assist people to illegally hide assets.

Trust deeds are generally confidential documents which are not publicly available. However whenever requested, we will provide copies of trust deeds to the Inland Revenue Department.

The use of trusts and people’s rights to keep their business and personal affairs private and confidential is legitimate and normal.

Unfortunately this appears to have been overlooked by the journalists releasing personal and confidential information without any regard to personal rights.

That is a very logical and understandable assessment of what we are actually talking about here. Nothing sinister, not at all what the Media party are portraying.

Do you actively promote New Zealand trusts to customers around the world, particular clients in South and Latin America?

We do not promote New Zealand trusts directly to customers around the world.

Media party shown up for their lack of research. They should have already known the answer to that question.

How thorough is your due diligence on new or prospective clients? These checks appear to be left to your own staff – is that adequate?

Our due diligence process is of a high standard and includes verification of identity and residence from independent sources.

We also typically obtain a report from a third party such as Thomson Reuters World-Check. If anything unusual is identified, additional information will be requested.

How thorough is the Media party’s own due diligence. They are smearing and abusing people while breaching their privacy, yet they are the first to whinge when there are other privacy breaches. The Media party are showing us yet again how poorly researched and thoroughly nasty they are.

How often do you reject clients?

We have rejected a small number in the past where we could not be satisfied as to the integrity of the client or the legitimacy of source of funds.

This is generally due to not being able to obtain sufficient information rather than anything untoward.

Fair enough.

What requirements are there to demonstrate – to your staff and authorities – what the trusts are being used for?

I’m not sure I understand this question. We comply with all New Zealand laws including anti-money laundering laws.

What a stupid question. They comply with the laws, where is the problem? The Media party and the left-wing are attempting to make this an issues of morals, but whose morals are we supposed to live by? Theirs?

The customer is not required to sign any documents stating they won’t use the trusts for unlawful purposes – is that sufficient?

Incorrect. We typically require confirmation as to the purpose the trust is being used for and the legality of any funds being transferred to the trust.

Wrong again. The Media party really are just hurling out emotive and wrong accusations in the hope of the dirt sticking.

On how many occasions since 2014 have IRD had cause to raise concern about your clients?

I believe Inland Revenue’s role is to ensure that New Zealand tax is properly paid and to also obtain information about New Zealand trusts when requested to do so by foreign tax authorities where there is an exchange of information obligation.

We have received a small number of such requests in the past and have always complied.

As you would. Again another attempt at a smear that has fallen flat.

Can you confirm that you worked for IRD? What was your role?

I worked for Inland Revenue for a relatively short period after graduating from university over 30 years ago. I fail to see the relevance of your question.

There is no relevance. There must be literally thousands of former employees of IRD, in fact my own accountant is a former employee of IRD. So what?

Is New Zealand a tax haven?

No, in my experience I don’t see New Zealand is a tax haven I would describe it as a high quality jurisdiction for trusts with a benign tax system in certain circumstances.

I think the assumption that all New Zealand foreign trusts are being used for illegitimate purposes is unfounded and based largely on ignorance.

Due to the information gathering powers of the New Zealand Inland Revenue Department I would expect that those looking to use trusts for tax evasion or other illegitimate purposes would choose alternative jurisdictions with secrecy laws.

Jurisdictions like those in the top ten countries for money laundering, which New Zealand isn’t remotely near joining.

Have you ever met John Key, Michael Woodhouse or Todd McClay? What was the nature or purpose of the meeting? Have you ever lobbied the government on tax legislation, regulation or compliance issues?

I met John Key once for a few seconds before he spoke at a national accounting conference.

This was before he became Prime Minister and we merely exchanged general pleasantries, there was no discussion regarding trusts or any specific tax issues.

I have never met Michael Woodhouse or Todd McClay and have never lobbied the government on tax legislation, regulation or compliance issues in any way relating to trusts and the taxation thereof.

I have made several submissions to the Finance and Expenditure Select Committee and appeared before the Committee twice on non-related tax issues, for example, the taxation of property developed for investment purposes and the portfolio investment entity (PIE) rules when those rules were initially proposed.

There is the sting, the attempt to put a hit on the government. That is what this is all about. Nothing else.

 

– Radio NZ

 


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  • Keeping Stock

    There is the sting, the attempt to put a hit on the government. That is what this is all about. Nothing else.

    And to date it’s heading towards the same fate as all the other stings, and attempts to put a hit on the Government; National’s polling will rise, and LabourGreenFirst will suffer.

  • Christie

    Good answers, all accurate, and shows everything to be above board. NZ has no register of trusts, so a trust can be established without anyone knowing who the parties are. The IRD knows though, because the names of trustees have to be disclosed. This information is just not generally available.

  • Wayne Hodge

    It seems to me, in my humble opinion, that the perception being generated is that NZ has media who not actually understand the world and seek to impugn legitimate business people and the transactions they engage in. Then of course as someone with over 40 years business experience including some 9 years working in a well regarded tax haven, not NZ which never featured in any tax haven pantheon I am aware of, I clearly know nothing when the likes of the NZ media and their superior intellect come out to play. However, I am not a conspiracy theorist/fantasist nor do I suffer from KDS. So clearly like Sgt Shultz I know nothing unlike Hager, Vance etc.

    • IKIDUNOT

      The truth is not relevant for these ‘journos’ and their mates….bringing JK down is, whatever the means. Sad bunch!

  • Quinton Hogg

    Mr Thompsons answers to the questions posed of him by RNZ are clear and coherent.
    The undertone of the questions displays breath taking ignorance and the making of quite blatant assumptions about what Mr Thompson does and who he deals with.

  • Chris

    I will bet that the person who did the interview( not named in the RNZ article) didn’t even listen to the answers that Mr Thompson gave, but was only trying to trip him up to prove that he had something to hide.

    • hookerphil

      The same as at Question Time.

  • Mav E Rick

    As soon as Hager was named as being the journalist investigating the stolen material, I lost all interest in the story. It is a hit job on the Govt, using stolen material and with no regard for the privacy of the people involved. To be honest, I am sick of our media “bashing up our country” to the world, making out that we are some dodgy, corrupt tax haven which we quite simply are not.
    The fact that Hager seems to continually deal with stolen or hacked material is a concern for me. Does this man have no morals.

  • Michelle

    l just hope that there is a total overhaul of our corrupt journalist because this is totally over the top

  • GoingRight

    The answers given to the media party questions are brilliant. It should be framed and put in every media office!

    • Probably unlikely to see them displayed prominently anywhere else.

  • shykiwibloke

    Hager will forever be associated with dirty politics. His opinions and evidence judged from that frame – which for most is suspect. The karma is fabulous. The media are only serving to cement that tarnished crown to his pathetic head.

    • benniedawg

      Yep, there’s a man going nowhere fast. Bit like the Minto of the current decade. Hope he doesn’t have too many career aspirations other than journalist for a community paper. A second non event should see most news organisations pass him off as a liability.

  • JustAnotherLurker

    “Have you ever met John Key, Michael Woodhouse or Todd McClay?”
    Good grief! I met my local (National) MP in the park on Saturday. Should I dairy note this meeting and record the pleasantries we discussed, just in case I am ever asked later?

    Edit: Just remembered – I said a few words to Simon Bridges earlier this month – this is getting worrisome!

    • Left Right Out

      How come he didn’t ask if he had met Shaw or Angry? ok, rhetorical question… but talk about your speculation questions… and they call this journalism?

      • OneTrack

        They might, I don’t. It is well beyond a joke how useless they are becoming.

    • rangitoto

      You have to connect the dots journalist style. Isn’t it true that Mr Thompson and Mr Key have both been in Auckland at the same time on multiple occasions. It’s a bad look don’tcha know.

    • Jonathon Stone

      For a short period of time, I was a graduate employed at a previous firm of Mr Thompson. Guess I should expect the media knocking on my door any day now.

  • HunuaRanger

    Wordsmiths for hire?
    Libellants for hire has a better ring to it.

  • Nebman

    Given that they appear to be complicit in this attack on John Key, I’ve come to the conclusion that Labours’ strategy is too keep throwing the proverbial at the fan in the hope something will stick.

    Someone should tell them that you need to stand behind the fan.

    Looking forward to seeing if this drags Little down even further in the Polls.

  • one for the road

    The RNZ person must have been a completely uninformed journalist, had no idea that most of the questions are just plain stupid – and I think it is completely unprofessional of RNZ not to put the name of the journalist at the end of the story, I wouldve thought that to be the accepted norm.

    • Just me

      Ha! Reading your post implies there might be some “informed” journos there…

      • one for the road

        Yes there are, including the bloggers around the place

    • localnews

      yes, they werent hard or technical questions. Seven of them worked on this all weekend, and it obviously never occurred to any of them to run it past a lawyer or an accountant for some background. TVNZ and RNZ would have both on staff, it seems amazing the journalists havnt taken any advice or done any research on how a trust works

  • Isherman

    I wonder if they forgot some questions, because one thing that I keep hearing repeated by the likes of Andrew Little and some in the media, is that this whole issue is causing New Zealand reputational damage and embarrassment, so surely they would have asked Thompson about this so called damage….oh silly me, that’s right, they cant ask him about that because not a single example of this damage to our image has even been offered. It could have got slightly awkward for them if he had asked them to clarify exactly where and by what evidence this accusation has been demonstrated.

    • Michelle

      haven’t seen NZ mentioned on any of the overseas media stations and have been watching them on and off all day
      Only news in NZ as most of those countries don’t know where NZ is and as usual there is no story
      Keep it up Hagar as we all know your MO now and so just carry on with our lives

      • David Moore

        If the Guardian hasn’t covered it, where is it anywhere?

    • Boondecker

      It was funny to hear Little hesitate when Hosking pressed him this morning on ZB on exactly who it was that was “embarrassed” by this whole leftie / media hit. He waffled around trying so badly to make sense of who he thought the embarrassed parties were, that Hosking had him on a corner on the first question.

      It was genuinely quite a hilarious moment – but I was genuinely surprised Hosking didn’t pull out his usual “inner conflict so obvious you could drive a truck through it” critique.

  • IKIDUNOT

    The quality difference between the questions and the answers is telling…..these so called journos are just a bunch of mean spirited, mediocre JK haters. My compliments to Roger Thompson for providing the above answers…well done sir!

  • kiwiinamerica

    This is just a smaller version of the vaunted ‘Moment of Truth’. RNZ and TVNZ have effectively been trolled by Hagar and have bought his spin hook line and sinker and now come across as the gormless ill informed gits that they are. When Chris Trotter sums it up as “meh”, you know they are firing blanks.

  • Alan Beresford B’Stard

    The media have already made up their minds on this, you can tell by the “leading” questions. I hope Roger Thompson gets more airtime to put these clowns right, though I’m not holding my breath.

  • Peter

    phhhssst..pop.

    another moment of truth fizzle

  • OneTrack

    Just when you think the “MSM” and the left can’t look any more pathetic, they do.

  • dumbshit

    I think the assumption that all New Zealand foreign trusts are being used for illegitimate purposes is unfounded and based largely on ignorance.
    Pretty much sums the whole pack of them up, in one sentence!

  • Wheninrome

    30 years ago he worked for the IRD Really how unbelievable, what were these little journalists doing then? Get real what on earth has this got to do with anything. If it has then let’s look at Labour’s role approx 30 years ago, what did they do, what did they continue to allow?

    • The IRD – where else would an accountant who wanted to build a sound, sustainable and reputable business work, in order to gain experience? Can’t think of a better employer.

      • island time

        IRD had great XMAS parties back then as well – some were legendary!!

    • R&BAvenger

      Most of them were probably in nappies, if that. It apparent that, intellectually they still are.

  • contractor

    Coran Dann almost beside himself that Key has acknowledged the potential need for law change. Have to give it to them though for the big deal over next to nothing.

  • jedmo

    “How thorough is the media party’s own due diligence. They are smearing and abusing people while breaching their privacy…”
    Hmm, would there be a place for some kind of a ‘Standard & Poors’ type of rating for Media? That allowed and up-graded for journalistic courage, seeking truth in dark and dangerous places etc, but called out and down-graded, any media that are sinking to the level that we are seeing with this kind of stuff.

  • David Moore

    This is something I have always believed;

    “never attribute to malice that which is adequately explained by stupidity”

    In this case I think the level of stupidity can only be explained by how much malice fuels it.

  • J Ryan

    Switching on TV1 this morning, there was Nicky Hager and the rest of the lightweight so called journalists trolling through the data giving their biased opinions. It was so off putting for a major network to associate with such a person as Hager. To select him with the previous election scandal was a bad choice for TVNZ as far as I am concerned. I switched to TV3 and that’s were I will stay for now on for any morning TV. How on earth can one take TV1 morning show seriously with such a biased researchers. Bad choice.

  • Abjv

    11 million pages of Panama papers. NZ mentioned 55000 times or whatever the numbers are. If that is at one mention per page, the roughly one mention every 200 pages saying the our stability, OECD membership and rule of law, not to mention double tax treaties, makes it an ok place to invest through. Half of one percent. And the problem is what, exactly…?

  • Yellow Admiral

    Astonishing, isn’t it that this piece was broadcast/written at 5.57am THIS MORNING! I suppose it is because Mr Thompson’s answers don’t fit the script that there has been almost no reference (that I can find) to what he said throughout the day.

  • Keanne Lawrence

    Interesting to see Mr Thompson putting things right by clearly answering what must have seemed like very tiring questions more suited to a primary school classroom.
    Trouble is like question time in the house the Media party do not hear and much less understand the answers. They are on a crusade lead by Hager with a cardboard sword becoming limper by the day.
    This is even more desperate a hit job than the attempted dirty politics debacle which involves an issue far too complex for their comprehension where they tend to stay even when their moronic questions are answered simply and directly.
    It does seem though that this crusade might well result into the Media party being split into them and the very worst of them. That might be funny to watch as they take to sniping at each other.

  • Wayne Peter McIndoe

    Even Chris Trotter on Paul henry this morning was of the opinion that the whole Panama Papers affair will amount to nothing

  • zotaccore

    Isn’t it time the dirt was splashed all over the place about Hager? What dirty dirty secret naughty things has he done in the past that need further investigation? It’s high time this noxious weed of person was dealt with by really digging into his past. Wish I had the investigative skills to do so but someone out there must know how!

  • R&BAvenger

    My partner has dealt with lawyers in both the US and Singapore regarding various property matters in the past.
    She was advised that NZ had a good reputation internationally as having good lawyers who were well versed in trusts and trust matters. This was some time before we even met, so our good reputation as a country and place to handle trusts matters for foreign clients proceeds this shabby affair.

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