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### Viewing cable 05WELLINGTON566, THE SLEAZE HITS THE FAN: AN INCREASINGLY WORRIED

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
05WELLINGTON566 | 2005-07-22 06:23 | 2011-04-28 00:00 | CONFIDENTIAL | Embassy Wellington

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

    220623Z Jul 05

` `

    C O N F I D E N T I A L SECTION 01 OF 03 WELLINGTON 000566

    SIPDIS

    STATE FOR D (CASTRO), EAP/FO, EAP/P AND EAP/ANP
    STATE PASS DEPT OF AGRICULTURE
    NSC FOR VICTOR CHA AND MICHAEL GREEN
    SECDEF FOR OSD/ISA LIZ PHU
    PACOM FOR J2/J233/J5/SJFHQ
    USDA FOR SECRETARY JOHANNS AND FAS/MIKE CONLON

    E.O. 12958: DECL: 07/22/2015
    TAGS: PREL PGOV EAGR NZ
    SUBJECT: THE SLEAZE HITS THE FAN: AN INCREASINGLY WORRIED
    LABOUR CLAIMS NATIONAL IS U.S. PAWN

    Classified By: Charge D'Affaires David R. Burnett,
    for reasons 1.4 (b) and (d).

    ¶1.  (C) Summary: Facing rapid losses in the polls, the ruling
    Labour Party has apparently decided to play the anti-American
    card, telling New Zealanders that a vote for the National
    Party means a vote against New Zealand's independent foreign
    policy.  Embassy Wellington is in general keeping a low
    profile on this and other election-related issues.  However,
    we released a press statement in response to veiled Labour
    allegations that U.S. interests are funding and controlling
    the National Party's campaign.  We have also quietly warned
    the Government that we will similarly respond to any further
    baseless allegations.  Labour's actions are not without risk
    to its own interests: more than one media report has
    expressed suspicions that the Government is trying to divert
    attention from its problem-plagued domestic policies.  In
    light of Labour's actions, Ambassador Swindells strongly
    recommends that Washington reconsider whether Agriculture
    Secretary Johanns should visit New Zealand just weeks before

    SIPDIS
    the general elections (see para 13).  End Summary.

    ------------------
    THE MITTS COME OFF
    ------------------

    ¶2.  (SBU)  After months of appearing invulnerable to a series
    of scandals and controversies, the Labour Government's armor
    is apparently beginning to crack.  A series of polls
    conducted in recent weeks has shown support for the
    opposition National Party is increasing at the same time as
    Labour's is falling.  The most recent polls, conducted over
    the weekend, have shown National now leads Labor by between
    three and five percentage points, although neither party has
    majority support.  (A One News/Colmar Brunton poll issued
    July 18 showed National's support at 42 percent vs. Labour at
    39 percent; a July 16 Fairfax New Zealand/AC Nielson poll
    showed 42 vs. 37 percent, respectively.)

    ¶3.  (C)  It is now almost certain that elections will not be
    held until mid-September rather than late August, and
    Labour's worry over its recent slide is at least partly
    responsible for the later date.  But although the Prime
    Minister is not likely to announce the election date formally
    before August 20, campaigning is already well underway and is
    becoming more personal and vicious.  In a recent speech, Dr.
    Brash called PM Clark "a petty, spiteful, deceitful leader
    whose government was 'rotten to the core.'"  Meanwhile, an
    apparently worried Labour has made the decision to play the
    anti-American card: senior Labour officials have begun to
    imply that a vote for National would mean a vote against an
    independent NZ foreign policy, and a vote for a U.S.-run NZ
    government.

    ¶4.  (SBU) On Tuesday, PM Clark and Michael Cullen each
    claimed in separate speeches that the question of National
    leader Don Brash's credibility would be a cornerstone of
    Labour's campaign.   At the same time, Labour began to run
    advertisements in local newspapers and on buses that include
    a statement Brash made about the Iraq War some time ago --
    that given the evidence surrounding Saddam and weapons of
    mass destruction, he too would have "done the same thing as
    President Bush" i.e., sent New Zealand troops to participate
    in Operation Iraqi Freedom.  Young Labour also put up posters
    showing side-by-side photos of Brash and the President,
    together with the accompanying slogan "Can you spot the
    difference?"  Cullen also questioned in his speech where
    National was getting it's money, claimed that the party had
    much more money than Labour, and implied that some funds were
    coming from overseas.

    ¶5.  (SBU) In response, Brash told the media that Labour was
    just trying to divert attention from the Government's
    domestic policies.  Obviously wishing to avoid the question
    of the Iraq war, which remains deeply unpopular here, Brash
    also stressed that the past was the past and it makes no
    sense to talk about what he would have done two years ago.
    Undaunted, Foreign Minister Goff issued an official statement
    claiming that Brash's Iraq policies were a legitimate
    question: Australia has recently decided to send more troops
    to Iraq; would Brash as PM make a similar decision?   After
    repeated questions by the media, Brash later fleshed out his
    stance, "In some circumstances we (i.e., a National-led
    Government) might certainly go with the United States but we
    make that judgment in the light of what's in New Zealand's
    best interests."

    -----------------
    CROSSING THE LINE
    -----------------

    ¶6.  (SBU) On July 23, Education Minister Mallard upped the
    ante.  During a press conference that was ostensibly on the
    Government's education policies, he alleged that "the lead
    bag man" for Brash "is an American..." and that "we will name
    him at the appropriate time."  Mallard then went on to say
    that "..if you say nukes gone by lunchtime and you have very
    close relations on Iraq and may or may not have made promises
    to send troops to Iraq the fact that an American is
    collecting cash for you is I think pretty interesting."  He
    also said that "...Brash has indicated that he will act on
    American lines more than any government in New Zealand ever
    has in the past," and added that National's campaign is being
    written by Americans. While claiming that his remarks were
    not directed at Americans or the Bush Administration, Mallard
    clearly meant to hint at  U.S. Government connection to
    National's financers, remarking, "...I think New Zealanders
    expect our policies...to be written in Wellington not
    Washington."

    ¶7.  (SBU) Despite the fact that the Charge had hosted Mallard
    to dinner the night before, the Embassy first learned about
    the Minister's claims from a journalist who was reporting on
    the story and wished to know the Embassy's response.  (The
    Charge had actually raised concerns about Young Labour's
    poster campaign over dinner; the Minister did not respond but
    looked very uncomfortable.)

    ------------------------------------
    THE EMBASSY (VERY QUIETLY) WEIGHS IN
    ------------------------------------

    ¶8.  (SBU) After learning of the press inquiries concerning
    Mallard's innuendoes, the Charge called Ministry of Foreign
    Affairs (MFAT) and Trade CEO Simon Murdoch, who was unaware
    of Mallard's comments.  (We then faxed the transcript to
    him.)  Murdoch contacted Minister Goff, who was on travel
    within New Zealand and about to board a flight.  Goff agreed
    that a line had been crossed, and said he would call the
    Charge once he returned to Auckland.

    ¶9.  (SBU) Brash, meanwhile, was telling the media that this
    was a low blow.  National's policies are not for sale, he
    said, and are written by New Zealanders for New Zealanders.
    Although the media has speculated the financial backer in
    question is Julian Robertson, a wealthy US property developer
    who has been a part-time resident here for years, Brash
    denied that National has gotten truly significant funding
    from any single donor.  TVNZ, in reporting the flap, implied
    that Mallard's comments were driven by National's
    hard-hitting criticism of Labour's education policies.  TVNZ
    also ran old footage of an obviously pleased Prime Minister
    Clark meeting with President Bush, commenting that Clark
    clearly relished the attention of the U.S. President.  Radio
    NZ said that Mallard will have to soon prove his accusations
    or he will completely lose credibility.

    ¶10.  (C) When, as promised, Goff called in, the Charge told
    him that we recognize that New Zealanders have the right to
    debate issues of substance during their election campaign,
    even when the issues involve the United States.  The Embassy
    had not, for example, commented on Minister Goff's remarks on
    Labour's vs. National's Iraq policies.   But by hinting that
    Washington was interfering in the elections and cutting
    secret deals with National, Mallard's statements had gone

    SIPDIS
    over the line.  Goff agreed, noting that "Mallard's wording
    was not as careful as it should have been."  The Charge
    countered that, on the contrary, Mallard's words seem to have
    been very carefully chosen to imply that there was U.S.
    Government involvement without actually saying so.  Goff was
    silent at this.
    The Charge also reminded Goff that Ambassador Swindells had
    spoken in his July 4 speech of the failure of both
    governments to deal with the legacy of mistrust that exists
    between us. He added that Labour's tactics seemed designed to
    increase that mistrust rather than to reduce it.

    ¶11.  (C) The Charge told Goff that the Embassy would have
    appreciated a head's up that Mallard would be making these
    remarks.  Goff said that as was well known, he (Goff) has
    very favorable feelings towards the United States and close
    family connections there.  (Goff's sister is an Amcit and has
    two sons serving in the U.S. military (one of who is in Iraq)
    with a third on his way to West Point.)  But, he went on, the
    Government believes that these issues do resonate with the
    New Zealand public and it would therefore be foolish not to
    pursue them.  There will be more campaigning on issues
    related to U.S. policy in the weeks ahead, he cautioned.  The
    Charge said that was Labour's call to make, but if further
    false claims were made the Embassy would respond.  Goff
    agreed that it was in the Embassy's right to do so, and
    endorsed the idea of our making a press statement refuting
    Mallard's claims.  The Charge then released to the media the
    following statement, which has also been cleared by
    Washington:

    "Our position is that the outcome of the upcoming election is
    entirely a matter for the people of New Zealand to decide.
    The U.S. Government has neither asked for nor received
    assurances of any kind from any political party in New
    Zealand.  As Ambassador Swindells mentioned in his farewell
    speech, we stand ready to work with whomever New Zealanders
    choose to represent them in order to make this important
    relationship all that both countries want it to be."

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    COMMENT
    -------

    ¶12.  (C) The tepid media reaction to Mallard's comments shows
    Labour's strategy might be a risky one.  Many journalists are
    questioning the accuracy of the claims and have picked up
    with some sympathy National's view that this is a
    diversionary tactic. (Embassy has e-mailed a summary of media
    reports to EAP/ANP and others in Washington.)  In addition,
    we understand that our MFAT contacts have been counseling the
    Government that there will be long-term impact on our
    bilateral relations if Labour continues its baseless
    diatribes and hints that a close relationship with the United
    States is in general not in New Zealand's interests.
    Meanwhile, we continue with our behind the scenes talks with
    MFAT and other key decision makers in government, the private
    sector, and the media about ways we can improve the bilateral
    relationship after the elections (septel).

    ¶13.  (C) But if Labour wins, its campaign may impact our
    ability or desire to build bridges.  Ambassador Swindells,
    who is on travel but has been kept abreast of the latest
    flap, also strongly recommends that Washington reconsider
    whether or not late August is a good time for Agriculture
    Secretary Johanns to visit New Zealand.  Ordinarily such a

    SIPDIS
    visit would be a positive message of support for bilateral
    ties.  However, we question whether a Cabinet-level visit
    just weeks before the elections might not be seen as
    interference in domestic politics or be used to undermine
    broader U.S. interests.

    Burnett

`