John Key - Wall Street's man in the Beehive

Focus on John Key

John Key is Wall Street's man in the Beehive.

On his return to New Zealand to assume the leadership of the National Party and then the country in 2008 a myth was created around him of being a 'moderate' and a likeable 'man of the people'.

If you look at the TV documentary below made in the 80's when he was a currency trader, still in New Zealand it becomes clear that the necessary qualities of a successful trader correspond to those of the sociopath.

Whether or not he was 'sent' back to New Zealand he certainly has all the qualities needed to destroy his own country while being in high office.

From the article below there is very little doubt in my mind that John Key was involved in a speculative attack on the NZ dollar in 1987, having worked alongside Andrew Krieger who is known for this - the only slight doubt being around the timeline.

Have a look at the material below and then say, with hand on heart,that this is a bona fide leader of this country with its interests foremost in mind.

John Key and the things he does not want you to know: Part 1, the attack on the NZ dollar in 1987

04/08/2008 · by Travellerev

It seems more and more people find their way to this post. If you think this post merits attention please give the link to anyone you know with a computer or alternatively print it out and share it with family, friends and colleagues. if you care to rpint it out please make sure you print out the sources too to make sure people will take it seriously. Sources are the NZ Federal Reserve, the Authorised Unauthorised biography of John Key in the NZ Herald, the Sunday Star Times, and the online New York Times Archives. the links in this article and the update will guide you to the relevant web pages. Thank you.

Oh what a tangled web we weave, When first we practice to deceive.
Sir Walter Scott

(More proof of the 1988 Andrew Krieger timeline and the discrepancies with John Key’s timeline)

I took me a while but I finally had the time to read through the 15 page unauthorised Biography of John Key published in the New Zealand Herald of 19 July. It made for very interesting reading indeed.

As was to be predicted the editorial painted a picture of John Key as a squeaky clean, hard-working and driven man with a big heart. We are told that he is a good family man and was a good son to his mother whom he called everyday while working abroad. He miraculously avoided to be involved in the NZ dollar attack in 1987 by Andrew Krieger although he worked with him. He did not muck up during the Asian crisis whatever that may mean and was appalled at the level of risk Merrill Lynch, his former boss had taken on with Financial products now causing the subprime crisis. Lucky for him he again escaped involvement because those financial product were only developed in 2004-2005. He has worked in London, Australia and Singapore and again he has avoided another not so nice association; the sewer that is Wall street, New York from whence all the bad news about the subprime crisis seems to originate.

We, so we are told, have nothing to fear from this honest hard working man who, after becoming financially independent through his own hard slog, came home to fulfil his childhood dream: To lead this country to the greatness he feels it deserves.

That’s nice, I feel a whole lot better now… but wait I have this strange nagging feeling that just won’t go away. Something isn’t quit right. It sits uncomfortable in the back of my head as I try to get my thoughts straight. I decide to go back to earlier interviews and reread them to see if I can get a handle on that uncomfortable nagging.

This is a 3 part response to the NZ Herald editorial:

Part 1, John Key and the 1987 attack on the NZ dollar.

In the autumn of 1987 Andrew Krieger, the Global head of the Foreign Exchange of the Bankers Trust New York launched a brutal and spectacular attack on the New Zealand dollar. He thought that the dollar was overvalued and bet that the dollar would fall. In order to force the dollar down he started to sell NZ dollars in such huge amounts that de dollar indeed fell in the order of 5% to 10% depending on whose version you believe. He bet such a huge amount of money on the fall of the NZ $ (again depending on who you believe anywhere between $ 600 million to $ 1 billion) and as such he became a legend in the financing world.

The attack was so spectacular that the Federal Reserve had to contact the Bankers Trust to inquire why the bank seemed so hell-bent on creating instability  in the currency. The risks were huge to the NZ economy and could easily have caused a massive economic setback and distress for the NZ population.

So it is not hard to understand that John Key who after all has come back to do “good” for New Zealanders is more than eager to distance himself from this episode of Foreign exchange history. It would not come across as very nice if it turned out he was involved in the predatorial attack on the NZ dollar that could have cost a lot of his prospective voters their livelihoods.

In the NZH editorial for the first time we learn the year in which John Key went to work for the Bankers trust. In fact it is mentioned two times. The NZH article states that John Key went to work for the Bankers Trust in 1988 and Andrew Krieger made his attack in the autumn of 1987. In fact the article goes as far as saying that:

As the record book shows, when Krieger made his most famous speculative raid on the kiwi in 1987, Key had yet to start at Bankers Trust. Krieger believed the kiwi was over-valued and bet on a fall, selling hundreds of millions of dollars at a time, and once pushing the price of the kiwi down 5 per cent in a day, and eventually, he claims in his book, The Money Bazaar, helped begin a fall in the value of the New Zealand dollar. The strategy was to rebuy when the kiwi bottomed out at 59c.

The Reserve Bank was alarmed but the crisis passed. Key was not at BT during Krieger’s spectacular raid, but when he began running the dealing room at BT in 1988 he dealt with the New York-based American, a relationship he was comfortable with. He told the Sunday Star-Times earlier this year, that Krieger “was a very intelligent guy.”

Key’s then-boss, Gavin Walker, points out that working with Krieger was part of the job. “Managing that relationship on behalf of the dealing room was part of John’s responsibilities. He knew everything Krieger was executing on our desk.”

So that’s settled then, John Key did not work for the Bankers Trust when Andrew Krieger attacked the currency.

See, this is where the nagging started again and I went back through my notes on John Key’s career. This is what I found:

Andrew Krieger left the Bankers trust of New York in february of 1988.

I remembered Googling Andrew Krieger when I started my research on John Key (I have done research on Labour as well, I like to know who makes the big desicions in the country I’m living in) and up turned an interesting article in the New York Times about Andrew Krieger and hiscurrency manipulations. It turns out that Andrew Krieger left the Bankers trust to work for George Soros after he only got paid a paltry $ 3 mill. as a reward for the fact that he made some $ 300 mill. in profits as a result of his attack on the NZ $.

The NZH goes on to say:

In 1988, Key was on the verge of leaving Elders, unshackling himself from a three-year contract after agreeing to three months’ “gardening leave” before taking up his new job at Bankers Trust, newly established in New Zealand.

This means that in order for him to be able to start working for the Bankers trust John Key had to wait three months before starting in order for Elders to keep their customers and prevent customer poaching. If this is so then there is a problem.

If Andrew Krieger left the Bankers Trust in February 1988 and John Key had to wait three months before starting to work for the Bankers trust then, even if those three months started on the 1 of January 1988, he would not have been able to work with Andrew Krieger as a customer because Andrew Krieger was no longer working for the Bankers Trust. In fact he would have missed Andrew Krieger by four to seven weeks.

In fact Andrew Krieger went to work for George Soros in a senior management position from April until June 1988 and left the currency trading altogether until he made a return in the year 1990.

In an interview with John Key in the Sunday star

He formed what was to be a lucrative relationship with 32-year-old currency trader Andy Krieger, based at Bankers Trust in New York, who began putting hundreds of millions of dollars of business through Key’s dealing room.

The same article states that Andrew Krieger was working for the Bankerst Trust while doing business with John Key

While Key can’t remember whether he actually executed some of the sells for Krieger’s 1987 speculative play on the kiwi, the timing suggests he did not. But Krieger continued his high-rolling punts on the Kiwi dollar after his big win, often placing $50m buy or sell orders with Key and his dealing room. The huge flow of business from Krieger and others at Bankers Trust in New York soon turned the local branch into the number one dealing room in New Zealand, cementing Key’s success and fattening his bonus packets.

While this could be a once off mistake made by the journalists who wrote the article, the quotes leaves no doubt that John Key was taking big orders from Andrew Krieger:

Key remembers getting a call from Krieger soon after he started at Bankers Trust. The New York trader’s first question was about New Zealand’s GDP and money supply.

“It was really the management of that relationship on behalf of the dealing room that John had responsibility for,” says Gavin Walker, former chief executive of Bankers Trust in New Zealand. “He knew everything that was going on in terms of the orders that Krieger was executing on our desk.”

this leaves me with several questions:

If Andrew Krieger had already done the dastardly raid on our currency then why does he call a total new comer in the bank about the state of the our currency?

If John Key arrives at the Bankers Trust sometime after Andrew Krieger has left than why does the article describe John Key as taking big orders from Andrew Krieger and others from the Bankers trust?

And if John Key arrived after Andrew Krieger left the Bankers trust than why is Gavin Walker the former chief executive of Bankers Trust NZ quoted as saying: “It was really the management of that relationship on behalf of the dealing room that John had responsibility for.” ?

It can be debated that the journalists Gillian Tett and Ruth Laugesen were confused about a timeline but it becomes harder to believe that both John Key and Gavin Walker would be mistaken about telephone calls or John Key’s function in the dealing room. If John Key remembers receiving a telephone call from Krieger wanting information about the currency it is very likely this has happened and if Walker says that the management of the relation with Krieger was John Keys job than it most likely was.

Now this is where the NZH article can bring some form of verification. Surely the three experienced journalists, Eugene Bingham, Carroll du Chateau and Paula Oliver who were tasked with writing and researching the article would have checked, checked and double checked the timelinethey so proudly presented on the website of the NZH.

But again they reiterate the same confused timeline: John Key arrived sometime in 1988 and began a trading relationship with Andrew Krieger the New York based trader. Again Gavin Walker is quoted as saying that it was John Key’s job to deal with Krieger, who by then was long gone from the Bankers trust.

Key was not at BT during Krieger’s spectacular raid, but when he began running the dealing room at BT in 1988 he dealt with the New York-based American, a relationship he was comfortable with. He told the Sunday Star-Times earlier this year, that Krieger “was a very intelligent guy.”

Key’s then-boss, Gavin Walker, points out that working with Krieger was part of the job. “Managing that relationship on behalf of the dealing room was part of John’s responsibilities. He knew everything Krieger was executing on our desk.”

Andrew Krieger started his own consultancy business for several years and according to the man himself he left Soros very quick because he felt he was in a rut doing the same crazy hours and he felt like spending more time with his family so the old fire wasn’t burning any more and yet we are told in two seperate interviews that managing the huge amounts of money Krieger, at the Bankers Trust was selling and buying was John Key’s main job at the Bankers Trust NZ.

My conclusion has to be as follows: John Key and Krieger have clearly worked together as money traders, this is confirmed in two interviews. The NZH would have the least reason to maintain these ties since it still puts Andrew Krieger and John Key together as currency traders, while the focus of this part of the article was to allow John Key to distance himself from the biggest attack on the NZ dollar in the history of New Zealand. It is confirmed by John Key himself and by his then boss Gavin Walker. Since Andrew Krieger according to the New York Times left in February of 1988 and according to Andrew Krieger he even left earlier then that it is impossible for John Key and Andrew Krieger to have done the alleged dealing in 1988. 

John Key according to himself left Elders in 1988 and he had to wait three months before he could begin at the Bankers Trust making trading with Andrew Krieger as a Bankers trust banker impossible. Andrew Krieger left the currency trading market in June 1988 after a three month stint as a senior portfolio manager for Soros, in all probablity not dealing himself but mamaging his junior portfolio managers.

We don’t know when excactly John Key started to work for the Bankers Trust but even if the three month period started on the 1th of January 1988 he would still have missed Andrew Krieger at the Bankers Trust and the relationship as both John Key and Gavin Walker describe it would not have been possible. Since both men adamantly describe such a relationship in two different articles, one written by two journalists and the other by three journalist who should have been able between the lot of them spot the error in the timeline, I can only draw one conclusion: John Key worked with Andrew Krieger and indeed managed his account but he did not do so in 1988. Whether by design, ommission or a faulty memory John Key and Gavin Walker gave correct information when talking about John Key and Andrew Krieger’s relationship but since 1988 was impossible they must have given incorrect information about the period in which this took place. John Key and Andrew Krieger can only have worked toegether in 1987 thus putting John Key firmly in the traders chair on the other side of the telephone line to the Bankers Trust New York were Andrew Krieger was giving orders in what was to be the biggest attack on the New Zealand currency putting tens of thousands of New Zealand jobs and incomes at risk.

Here is a TVNZ documentary from the 1980's about currency traders in which a young 25-year-ol John Key features prominently

The one main example of corruption by John Key and his government was in the corporate raid on South Canterbury Finance and the destruction of Alan Hubbard

I am reposting an article that I posted some time ago

Paul Carruthers, who was responsible for bringing this to light has sadly had to succumb to pressure (from friends and employers) and withdrawn from activism.

I first reported on this in November, 2012 HERE

As a sign of the times we live in NONE of the material I posted, not the 60 Minutes programme, not the discussions of Paul Carruthers with Vinny Eastwood, is now available.

It has all been removed - every single bit.

Please read the article - this is perhaps the worst case of corruption in this country - corruption from the very top of the country


Comments from Paul Carruthers:

Just to be clear, my interest in the SCF issue from day one has always been about the justice and human rights angle in relation to Allan Hubbard.

Those who know me personally know that my bottom line was always that his age and health condition was enough evidence on it's own to prove that they simply should have found another way if they wanted their hands on it all that much.


The saddest thing I ever heard Allan Hubbard say was "if John Key wanted it that much he should have come and asked me, I would have been happy to retire but I couldn't find anyone I trusted enough to take over from me, and I am worried what will happen to the investors if I take my eyes off it". All of this was completely unnecessary.


The reason why John Whitehead did not appear in court is precisely the same reason why they couldn't afford for Allan Hubbard to appear in court either.


Because it would have enabled the defence lawyers to table as part of the evidence against the Crown, the fact that an email was sent by the Governor of The Reserve Bank to Bill English the day after National took office in 2008, warning Bill English *not* to renew the Crown Guarantee for SCF. The email clearly stated that it was not too big to fail vis a vis the NZ economy.


Bill English completely ignored it.


Instead, while Allan Hubbard was in hospital battling cancer, resulting in the loss of his kidneys, requiring him to adjust to life with dialysis treatment, a process lasting almost two years, the government installed it's own directors on the SCF board.


Allan Hubbard was completely honest in the 60 minutes interview he did about that period, between 2008 and 2010.


He said that the influx of money into SCF during that time was phenomenal and the company grew much larger rapidly.


He also made it clear he was uncomfortable with that process.


And then they accused him of fraud, out of the blue, after a guy John Key employed in 1990, someone he has known since school, was shoulder tapped by John key to work for the Securities Commission.


Meanwhile, Treasury was putting pressure on Allan Hubbard to tip his best assets into SCF as an act of good faith.


Doing so made Allan the only finance company owner in the world to have done so in response to the GFC.


The day after that transaction was completed, John Keys mate at the Securities Commission received an "anonymous" complaint, which ultimately resulted in the fraud allegations against Allan, as well as statutory management, a couple of weeks later.


Of course, John Key's mate forgot to tell everyone his brother had also been bankrupted by SCF the year before, for almost $8 million worth of debt on a string of failed bars and restaurants.


And the rest, as they say, is history.


One of the companies Allan tipped in to SCF was purchased by John Key's next door neighbour for $44 million.


He sold it six weeks ago for $149 million.


I know who really committed the fraud.


It sure as hell wasn't Allan Hubbard.


Remember this all started with them accusing him of running a Ponzi scheme.


Two weeks ago, his investors were told they are getting 99.37% of their money back, four years after his death.

Hardly a ponzi scheme, then.


And the best part is that, even though our taxpayer money was used by John Key and Bill english to pay out the banks for any shortfalls on the sale of SCF's assets, we are not allowed to know anything about the valuations on those assets because the sales of the assets are "commercially sensitive".


How can they be "commercially sensitive" when taxpayer money has been used.


New Zealanders, you have been had.


The only fraud I can see that has been committed here, has not been committed by Allan Hubbard.


The real fraud has been perpetrated by his accusers.

Allan Hubbard was never even interviewed by the SFO.


All of the "evidence" portrayed in the media about him was provided by insolvency practitioners appointed by the Crown, who were paid large sums of money to produce that "evidence".


The former director of the SFO, Adam Feeley, gave away copies of Allan Hubbard's biography away as booby prizes at an SFO Christmas party, while Allan was still under the "investigation" by the aforementioned insolvency practitioners, who were being paid by the SCF to produce the "evidence" the SFO used to charge Allan Hubbard with.


The media were notified that Allan Hubbard was being charged before Allan Hubbard was.


Because everyone made it about money, my message about injustice and improper process was buried and fell upon deaf ears anyway.


But it was always the process which stood to undermine John Key as soon as it is investigated.

I just did the math a lot earlier than most other people.

---Paul Carruthers

SCF trial: Two cleared, Sullivan guilty

Former South Canterbury Finance director Edward Sullivan has been found guilty on five of nine charges relating to the failed South Canterbury company.

Radio NZ,

14 October, 2014

Justice Health, who presided over the five-month trial of Sullivan, Robert White and Lachie McLeod, handed down his verdict in a packed High Court at Timaru this morning.

Listen to Justice Heath ( 24 min 25 sec )

The charges brought by the Serious Fraud Office ranged from theft by a person in a special relationship, false accounting, obtaining by deception and making false statements.

The judge found Sullivan, a director of 20 years, guilty on five of the charges he faced and not guilty on four.

Former chief executive Mr McLeod was found not guilty on all five charges, while former director Mr White was found not guilty on all four charges he faced.

Justice Heath told the court the Crown's case against the three was based on the proposition they evaded or ignored controls they should have adhered to.

The judge said what the Crown suggested was a culture of concealment did not withstand scrutiny. He did not consider the seven transactions which were central to the Crown and SFO's case were representative of a culture of concealment from the public.

"The Crown based its allegations on seven transactions and three other events. I do not consider that an examination of the seven transactions over a period of a little over five years can provide a safe foundation for an allegation of continuos concealment of information from the Government."

However, the directors did respond in a knee-jerk fashion to a downturn in the property market, and the global financial crisis, Justice Heath said.

Sullivan has been bailed until his sentencing on 12 December.

Lives have been wrecked - lawyer

The Serious Fraud Office came under fire today from the accused, their legal teams and Justice Heath.

Jonathan Eaton, QC, who represents Lachie McLeod, said the Crown's allegations that the three men acted dishonestly have been roundly rejected by the judge.

Mr McLeod said the SFO has wrecked the lives of five men, including two whose charges were dropped before the trial started in March this year.

Speaking outside the court today Mr McLeod said there were not words for the sense of relief he felt.

"I knew it was hopefully coming but you can't describe a feeling like that. I'd just like to thank my family, my wife and daughters and all the local support around Timaru and South Canterbury who have come and dropped emails and called for the last four years. It's been fantastic, really."

Mr Eaton said it showed there was no substance to the allegations of dishonesty against his client.

"It's obviously been a long road, at the heat of the allegations were suggestions that there was a culture of concealment at South Canterbury, allegations of dishonesty, which are very serious allegations to make against anybody.

"And the judge, as you've heard, has roundly rejected those allegations, and that's what we've always argued and it's very rewarding for Lachie, and for all the accused that type of allegation has been put to bed."

Mr Eaton said because of the significant expenses of the case, Mr McLeod was likely to apply to recover his costs.

SFO defends prosecution

SFO director Julie Read said while it was unsuccessful in part of its prosecution, it was in the public interest to put all matters before the court.

Listen to the SFO's Julie Read ( 5 min 1 sec )

Ms Read said she was satisfied there was sufficient evidence to warrant bringing the prosecution as the court, not the SFO, was the ultimate arbiter of whether or not that evidence was sufficient to prove the charges beyond reasonable doubt.

The SFO had, in this case, failed to satisfy the court to the required standard in relation to Mr McLeod and Mr White.

However, Ms Read said the case was thoroughly investigated and counsel presented the best possible case to the court.

She said the SFO's role was to investigate and put matters before the court when appropriate, and it did a good job on this case.

She also said disruption caused by the Canterbury earthquakes destroyed some of the documents.

The SFO would make a submission on Sullivan's sentence in December.

South Canterbury Finance timeline

• 22 January 2009 - Treasury is first briefed by Allan Hubbard and Lachie McLeod about plans SCF was making for restructuring and recapitalisation.
• 16 February 2010 - SCF presents to Treasury a recapitalisation proposal.
• 31 August 2010 - SCF placed into receivership owing approximately $1.58 billion, triggering a payout under the Crown deposit guarantee scheme. SCF, had about 35,000 investors and $1.6 billion in deposits, and had been in trouble for at least nine months because of bad loans and mismanagement.
• 1 September 2010 - Prime Minister John Key says the Government intended to sell SCF assets. It's expected taxpayers may have to wait up to four years to find out how much they will get back from their $1.8 billion bailout of South Canterbury Finance's depositors.
• 18 October 2010 - Investigation by the Serious Fraud Office Act begins.
• 2 September 2011 - Alan Hubbard is killed, and his wife injured, in a head-on collision. Mr Hubbard was in statutory management and facing 50 fraud charges relating to private investment vehicles Aorangi and Hubbard Management Funds.
• December 2011 - After a 14 month investigation the SFO lays 21 charges against five individuals following its investigation into South Canterbury Finance Limited. The charges allege a variety of offences, including theft by a person in a special relationship; obtaining by deception; false statements by the promoter of a company; and false accounting. The total estimated value of allegedly fraudulent transactions is approximately $1.7 billion.
• March 2012 - The five individuals are named as: Messrs Graeme Brown, Terrance Hutton, Lachie McLeod, Edward Sullivan and Robert White.
• August 2013 - The SFO withdraws a charge of false accounting against the former Chief Financial Officer of SCF, Graeme Brown.
• October 2013 - The SFO withdraws charges against Terrence Hutton, the former Group Accountant for the company. Mr Hutton faced two charges alleging false accounting in relation to the recording of a $25 million loan advance and a $10 million loan advance.
• 12 March 2014 - The SCF trial involving 18 fraud charges, begins in front of a Judge-only jury at the High Court in Timaru, it is expected to take four months to complete.
• 18 August 2014 - The SCF trial comes to a close after 62 days of evidence, 3000 pages of submissions and after 12 days of closing arguments.
• 14 October 2014 - Justice Heath will deliver the verdict and reasons at 9.30am.

The South Canterbury Finance Three

Robert Alexander White: A retired Timaru accountant was a SCF board member and director 1993-2009. Former partner at Hubbard and Churcher accounting firm since 1971. Mr White was the director for (Allan Hubbard investment company) Aorangi Securities from September 2003 to July 2008.

Edward Oral Sullivan: He retired in 2011 after 43 years at Timaru legal firm RSM Law. Mr Sullivan was on SCF's board from 1990 to 2010.

Lachie John McLeod: He was a former SCF chief executive between 2003 and November 2009.

Related

Crown costs for SCF trial near $1m

Long-running SCF trial wraps up

CEO possibly too loyal, SCF trial told

SCF accused will never recover - lawyer