NZ Political scandal

Peter Dunne resigns in 
spy-leak fallout

Stuff,

7 June, 2013

Peter Dunne has quit as a Minister after the release of a report into the leaking of a Government Communications Security Bureau report.

In a statement, Prime Minister John Key said the report by David Henry into the leaking of Rebecca Kitteridge's review to Fairfax Media reporter Andrea Vance showed that Dunne had not met all the requests for information.

Dunne had given a categorical assurance to Key that he did not leak the report and the Prime Minister said "I want to believe him" but, because Dunne could not cooperate, he had no choice other than to accept his resignation.

This afternoon, Dunne continued to deny leaking the report, saying he'd canvassed the possibility but didn't actually do it.

THE REPORT

The report, which did not name Vance, who broke the story, showed 12 emails went between her and Dunne on April 8.

The article which prompted the investigation ran on April 9. The former minister and the reporter exchanged a total of 86 emails between March 27 and April 9.

Dunne would not let Mr Henry see all of those emails for the purpose of his inquiry.

"Mr Dunne has declined to allow me to read those 86 emails,'' the report said.

Dunne had allowed him to see an edited version of 44 emails.

Those exchanges showed a discussion around GCSB issues, including the Kitteridge report.

Dunne was to meet the reporter on the morning of Monday April 8, but said that did not happen.

Logs of emails on government systems obtained from March 22 - when the report was finished - and April 8, were used to track the leak.

They included the email logs of 11 cabinet ministers, and their staff and two support ministers and their staff.

Telephone billing records were also obtained, and building access records.

These record identified three people who had a copy of the final version of the report, and who had been in contact with Vance. They were: a GCSB officer; an officer in the prime minister's office, and Mr Dunne.

The contacts between the reporter and the two officers were found to be in line with their duties.

DUNNE CONSIDERS LEAK ... BUT DOESN'T

Dunne told reporters that he had canvassed the possibility of leaking the report but did not actually leak it.

Dunne read a short statement in his office saying he felt he had to resign because of the lapses of judgement he had shown.

"The honourable course for me to follow now is to offer my resignation as a Minister.

"I do so with a very heavy heart and a great deal of reluctance, but acknowledge there is no credible alternative.

"The UnitedFuture Party's confidence and supply agreement with the National-led Government is not affected by my decision, and we will continue to honour that agreement in letter and spirit as we have done for the last four and a half years.

"The last few days have been especially difficult for my wife and family, whose support throughout I acknowledge with huge gratitude; for my staff, whose careers will be affected, for my friends, and colleagues in the UnitedFuture Party."

Dunne insists he did not leak the report, and his copy was kept in a locked brief case in his home.

"I have acted extraordinarily unwisely, even stupidly, and I'm now resigned to paying the price for that.

"There is no credible explanation that I can offer you as to why I acted in that way, but the fact is I did, and as a consequence I face up to my responsibility that I can no longer credibly serve as a Minister.

"That fact, in my judgement, that I canvassed the possibility of making the report available, even though I didn't do so, was a lapse in judgement."

Dunne said he wasn't withholding the emails in order to protect the reporter involved, but as a matter or principle.

"It's a question of belief and of principle, that if people communicate with me ... that they have a right to have their correspondence treated confidentially, in confidence."

There was nothing innapropriate in the emails, which if released, would show he did not leak the report.

PM SHOCKED

Key admitted he was "very shocked" when he received Henry's report into the leak.

He had "100 per cent trust" in Dunne as one of his ministers.

Asked about the nature of the relationship between Dunne and Vance, Key said Dunne had assured him it was a thoroughly professional one.

"The crazy thing about this was we were always planning to release the report," Key said.

The report was expected to be released on April 15, when the Prime Minister returned from a trip to China.

Bill English will take over from Dunne as acting Revenue Minister.

Dunne had indicated he would continue to honour the confidence and supply agreement he has with the Government.

FAIRFAX REACTION

Fairfax Media executive editor Paul Thompson said: "Fairfax has no comment to make on the report and we never comment on our confidential sources."

"This story was an excellent scoop by our reporter and was handled with the utmost professionalism by the Fairfax team."

UNITED FUTURE SUPPORT

United Future Party President Robin Gunston said in a statement that the party board fully supported Dunne at this difficult time.

"We recognise his outstanding leadership and service to the party over the years and will stand by him as leader.

"The party has in the past week had a substantial boost in membership, which clearly demonstrates public support for and belief in the need for a Liberal Democratic party. A lot of this support is coming from within Mr Dunne's Ōhariu electorate."

The party will be making no further comment at this stage.

KEY POINTS FROM THE KITTERIDGE REVIEW

The top-secret report prepared by Cabinet Secretary Rebecca Kitteridge on the GCSB was released by the government after Fairfax earlier revealed it had found 85 people may have been illegally spied on by the foreign intelligence bureau.

The agency is forbidden from spying on anyone with New Zealand citizenship or permanent residence here.

The Kitteridge report raised questions about when the intelligence services first became aware there was a problem.

Kitteridge said Inspector-General of Intelligence and Security, Paul Neazor, questioned in May 2012 whether long-standing interpretations of the GCSB Act by the intelligence services were correct.

This came five months before the Government says the illegal spying on internet entrepreneur Kim Dotcom came to light.

The problem centres on work the bureau did on behalf of other agencies - particularly the domestic spy bureau Security Intelligence Service (SIS) and the police.

THE LEGISLATION

* The GCSB Act 2003, the sole source of authority and law within the agency, is so confused it is not fit for purpose

* The key issue is with Section 14 which states the GCSB may not "take any action for the purpose of intercepting the communications of a person ... who is a New Zealand citizen or a permanent resident"

* Immediate legislative reform is needed to clarify the application of the Act to the GCSB'S work

* The GCSB Act has not kept pace with the internet - the Act is difficult to apply to some of the bureau's work with new technology

* GCSB'S compliance with the Defence Act 1990 and the Privacy Act 1993 is also being analysed - and the agency may not have complied with the Public Records Act 2005

STAFF CULTURE

* It will take a year and a really solid effort to address GCSB's problems

* GCSB's organisation was too complex and fragmented, with too many managers

* There was a tendency to tick boxes and make assumptions but not ask questions or seek evidence

* A culture persisted where poor performance was tolerated and problematic staff redeployed internally instead of being held accountable

* There was an aversion to dealing with poor performance because of a security risk from disgruntled former staff and also because vetting of new recruits took so long

* Specialised knowledge was valued over other skills, staff stayed too long in one job and there was some passive resistance to change

* A need-to-know culture created silos

* The bureau is isolated and disconnected from the rest of the public service

* Staff faithfully followed legal advice and it was devastating and abhorrent to learn they were not acting within the law

• There was no evidence they acted in bad faith or believed the end justified the means

• Staff believe it is an organisation spread very thinly - money was directed at operations at the expense of legal and compliance advice

.UPDATE:

NZ First leader, and Dunne's political foe, Winston Peters stands by his allegations and has referred his complaint to the police.

If the Opposition play things right this could prove a real headache for the government.