Part 5: Investigation by the Department of Internal Affairs
5.1
In this Part, we explain how Mr Liu's application was managed by the Department, from May 2005 when it was originally filed to July 2008, when his application for citizenship was submitted to the Minister.
5.2
We also address the allegations that have been made that the management of Mr Liu's file was subject to inappropriate political interference.
May 2005: Receipt and deferral of citizenship application
5.3
Mr Liu's citizenship application was filed at the Department's Citizenship Office in Manukau in May 2005. However, shortly after it was filed, during standard processing checks with Immigration, Department staff were made aware that Mr Liu was under investigation by Immigration. As a result, rather than proceeding with standard processing, his citizenship application was referred to the Department's Investigations Unit in Wellington and his file was assigned to one of the Investigators there.
5.4
Between May 2005 and September 2007, the Investigator periodically liaised with Immigration, Interpol, and other agencies to obtain updates on the Mr Liu's file. The Investigator also corresponded with Mr Liu's lawyers in response to their requests for progress reports and information from Mr Liu's file. However, the citizenship application was effectively on hold until September 2007, when the Minister of Immigration, Mr Cunliffe, decided to defer his decision about whether to revoke Mr Liu's residency permit.
October 2007: Re-activation of citizenship application
Letter from Mr Liu's lawyers to Mr Barker
5.5
Shortly after receiving Immigration's letter notifying them of Mr Cunliffe's decision, Mr Liu's lawyers wrote to the Minister of Internal Affairs (Hon Rick Barker) seeking his assistance to progress Mr Liu's citizenship application. Mr Liu knew Mr Barker, who had been introduced to Mr Liu before Mr Barker became Minister of Internal Affairs.
5.6
The lawyers' letter noted that the Minister of Immigration had recently confirmed Mr Liu's permanent residency status, and that the Department had told Mr Liu that checks were being carried out on him. Mr Liu had not been told which agencies were involved. Mr Liu's lawyers said the undue delay in considering Mr Liu's citizenship application was causing Mr Liu and his family unnecessary stress and hardship.
5.7
In response to this letter, as is standard practice in the Minister's office when dealing with correspondence about citizenship applicants, Mr Barker's Private Secretary emailed officials at the Department to ask them to provide background information on Mr Liu's file and to prepare a response to the letter.
5.8
The file note provided to the Minister's office explained that Mr Liu's citizenship application had been delayed because he was subject to an Interpol Red Notice, and that the Department did not have consent to disclose that information to Mr Liu.
November 2007 to January 2008: Management of the file
Privacy Act complaint
5.9
In late November 2007, Mr Liu's lawyers complained to the Privacy Commissioner about information on Mr Liu's file being withheld from him. Department officials met with officials from the Office of the Privacy Commissioner to discuss the matter.
Mr Barker's response to letter from Mr Liu's lawyers
5.10
In early December 2007, while these discussions were taking place, Mr Barker's Private Secretary contacted the Investigator to request more up-to-date information about Mr Liu's file.
5.11
The Department prepared a draft letter for the Minister to send in reply to the letter from Mr Liu's lawyers. The letter explained that Mr Liu's application had been delayed because checks were still being carried out by other agencies. It went on to say that Mr Barker would ask his officials to encourage government agencies to give Mr Liu's application their urgent attention and gave assurance that Mr Barker would take Mr Liu's personal circumstances into account when Mr Liu's application was forwarded to him for consideration.
5.12
Mr Barker told us he was already aware that, because he knew Mr Liu, he could not make the decision about Mr Liu's citizenship application and had no intention of doing so. However, he signed the letter that was then sent on 13 December. We discuss the letter, and Mr Barker's reasons for signing it, in more detail in Part 7.
Correspondence with Mr Liu's lawyers
5.13
In the meantime, the Department had obtained Interpol's consent to tell Mr Liu about the Red Notice. On 17 December, the Investigator wrote to Mr Liu's lawyers advising that, although Mr Liu satisfied most of the criteria for the grant of citizenship in the Citizenship Act, he would be unable to satisfy the "good character" requirement until the matter of the Interpol Red Notice was resolved. In keeping with departmental policy at the time, the Investigator suggested that Mr Liu contact the Chinese Embassy in Wellington.
5.14
The Investigator went on to explain that Mr Liu had two options at that point; he could either withdraw his application until the Interpol notice was resolved or proceed with his application based on the information currently available. However, he explained that if Mr Liu decided to proceed with his application, the Department would be obliged to recommend that his application be declined.
Mr Liu's response to allegations
5.15
On 15 January 2008, Mr Liu's lawyers sent a comprehensive letter of explanation to the Department setting out Mr Liu's response to the alleged "economic crimes" in China and his explanation for his two identities and two passports.
5.16
Through his lawyers, Mr Liu repeated his assertions that no credible evidence had been provided by the Chinese authorities to substantiate the allegations made against him, and that the allegations were politically motivated. Therefore, it was neither possible nor safe for Mr Liu to approach the Chinese authorities to try to resolve the allegations.
5.17
Mr Liu said that, notwithstanding the unresolved matters, he wanted a decision to be made urgently.
Mr Barker's discussion with Cabinet Office about conflicts of interest
5.18
Around this time (January 2008), Mr Barker approached the Cabinet Office to discuss concerns he had about potential conflicts of interest in citizenship decisions. He told us that his concerns did not relate specifically to Mr Liu's application, but to other applicants he was aware of whose applications might shortly be presented to him.
5.19
As a result of his discussion with the Cabinet Office, a standing transfer of citizenship decisions was put in place for cases where Mr Barker had a conflict of interest. The standing transfer of decisions from Mr Barker to Mr Jones was formally approved by the Prime Minister on 28 April 2008.
Letters of support from Pansy Wong, Dover Samuels, and Chris Carter
5.20
In the following weeks, there was further correspondence between the Department and Mr Liu's lawyers and between the Department and other agencies about the good character issue. Letters of support for Mr Liu's application were sent by three MPs – the first on 22 January 2008 from Hon Pansy Wong, the second on 30 January 2008 from Hon Dover Samuels, and the third on 12 February 2008 from Hon Chris Carter. The letter from Mr Samuels was the first of four he sent in support of Mr Liu between January and July 2008.
Interview
5.21
In late February 2008, Mr Liu was interviewed by officials from the Department. During this interview, he repeated the explanations he had previously provided for having passports with two different names and birth dates, and again said that he was being persecuted because of his pro-democracy and Falun Gong associations. He also claimed that the Chinese authorities had him under surveillance.
5.22
Shortly after this interview, it was decided that Mr Liu's file should be returned to the Citizenship Office in Manukau so that normal processing steps could be completed. The General Manager of Citizenship told us that it was he who made this decision.
March 2008: Processing of citizenship application
File note from Investigations Unit
5.23
The file was returned to the Manukau office on 12 March and assigned to one of the Citizenship Officers for processing. The file was accompanied by a note from the Investigator, explaining that the Investigations Unit had determined that Mr Liu could not satisfy the "good character" requirement and the reasons why.
5.24
The file note recorded that part of Mr Liu's file, which contained classified information, was being retained by the Investigations Unit. Once the Manukau team had completed their work, the file was to be sent back to Wellington, where the classified section would be re-inserted before Mr Liu's application was presented to the Minister. The file note also recorded that the General Manager of Citizenship had agreed that the file would be processed expeditiously.
Processing of application
5.25
When he received the file, the Citizenship Officer in Manukau proceeded to carry out a number of standard processing steps. These included checks with various agencies, such as the New Zealand Police, Immigration, and the New Zealand Security Intelligence Service, and asking Mr Liu to provide copies of documents (such as his birth certificate and passport). The Citizenship Officer also asked Mr Liu to complete a new application, because his original application was now out of date.
5.26
After receiving Mr Liu's new application form and supporting documents, the Citizenship Officer asked a number of follow-up questions about the investigation carried out by the Australian authorities, Mr Liu's use of different passports to travel in and out of Australia, and his different identities. He told Mr Liu's lawyer that the Department needed to know which of his two names and birth dates were correct because this information was required for Mr Liu's citizenship certificate, if citizenship were granted.
5.27
The Citizenship Officer told us the particular concern he had was Mr Liu's use of two passports. He said that although he could understand the explanation Mr Liu had given for having two identities, he was not satisfied that it explained why he had two passports with different names and birth dates, and why he had used both passports at different times when travelling. The requirement to verify the identity of the applicant is one of the key obligations of Citizenship Officers when processing citizenship applications.
5.28
Mr Liu's lawyers provided various emails and letters responding to the Citizenship Officer's requests, but at the same time, in an email to the Investigator at the Investigations Unit in Wellington, they expressed surprise at being asked to provide this information again. They had already provided it to the Investigations Unit. The next month, Mr Liu's lawyers emailed the Investigator again to ask if there was anything that could be done to expedite the processing of the file.
Second letter from Mr Samuels
5.29
On 9 April 2008, Mr Samuels sent a second letter of support for Mr Liu to Mr Barker. In the letter, Mr Samuels asked the Minister to give "urgent consideration making a decision bringing this matter to closure one way or another."
5.30
The letter went on:
In my view Mr Liu has been denied his rights to natural justice, no New Zealander would put up with the continuous scrutiny re questioning, invasion of privacy, raid on his residence when his wife a children were present.
You should require your officers to place the relevant and substantiated information before you so you can make an informed decision on the fate of Mr Liu and his family based on facts and not unsubstantiated allegations and innuendo.
5.31
Officials were asked to prepare a response to this letter, but it was later withdrawn before the Department had finished preparing a response to it. A letter on very similar terms was sent the following month (see paragraph 5.46). Neither Mr Samuels nor anyone else we interviewed could recall why the letter was withdrawn but then re-sent.
General Manager's telephone call to Citizenship Officer
5.32
Around 11 April 2008, the General Manager of the Citizenship Office called the Citizenship Officer to discuss Mr Liu's file. The Citizenship Officer told us that this was the first time the General Manager had ever called him about an application. He told us that the General Manager told him to "stop digging" because there was political pressure to return the file to Wellington.
5.33
The General Manager had a different recollection of this conversation. He told us that his instructions to the Citizenship Officer were that he should complete normal processing of Mr Liu's file, but that he did not need to re-investigate matters that had already been investigated.
5.34
The General Manager told us that, in his view, further investigations were unlikely to resolve the outstanding issues and that the Department had enough information to inform the Minister's decision, despite the unresolved issues.
5.35
Given that Mr Liu had indicated that he wanted the Minister to consider his application, even though he had been told the Department was going to recommend that his application would be declined, the pragmatic thing to do was to get the file to the Minister as soon as possible so that a decision could be made.
5.36
The General Manager said that he had not come under pressure from Mr Barker, his officials, or any other politician to give Mr Liu's file special treatment. He acknowledged that Mr Liu's case had attracted some high-profile support. However, although support from three MPs for one person was relatively unusual, high-profile support of that nature from MPs and other prominent figures was not unusual.
5.37
The request to process the file urgently had been made, through his lawyers, by Mr Liu. Since October 2007, when Mr Liu's citizenship application had been re-activated, his file had generated a large amount of correspondence. Mr Liu's lawyers (and, on occasions, Mr Liu) were contacting the Department frequently, requesting updates on the application and making requests for information under the Privacy Act 1993.
5.38
Also, each time a letter was received in the Minister's office about Mr Liu's case, it prompted a request from the Minister's staff for staff in the Department to provide background information on the file and prepare a letter of response.
5.39
The level of correspondence Mr Liu's file had generated had created a significant workload. It was putting pressure on the staff involved, who were already under pressure because of a backlog in citizenship applications. The General Manager told us that the most pragmatic way to relieve this pressure was to agree to Mr Liu's request to process his application urgently.
5.40
The Citizenship Officer later told us the General Manager had not explained this context at the time. He also told us that he did not agree that there had been a backlog of applications, or that if there had been, it would have affected his ability to process Mr Liu's application.
5.41
It is not possible for us to determine what was said during the telephone conversation between the General Manager and the Citizenship Officer. But it is clear that, as a result of that conversation, the Citizenship Officer stopped questioning Mr Liu's lawyers and processed the application based on the information available to him.
Mr Liu's first visit to the Citizenship Office
5.42
On 22 April 2008, Mr Liu came to the Manukau Citizenship Office to ask about the status of the police check that was being carried out for his application.
5.43
The Citizenship Officer showed him a status report on his application to confirm that a response had not yet been received from the New Zealand Police.
Third letter from Mr Samuels
5.44
On 13 May 2008, Mr Liu's lawyers wrote to Mr Samuels asking for his help to expedite Mr Liu's application. Their letter said:
Mr Liu remains of the view that he is being politically persecuted by the Chinese authorities due to his involvement in political activities that promote democratic principles in China. He has no proof that the processing of his application is being delayed but he is concerned about the number of technical issues and repetitive questions the Department of Internal Affairs has raised on separate occasions which contribute to the delays.
5.45
The letter went on to note that the letter in which Mr Barker had said he would ask officials to encourage other agencies to give Mr Liu's application their urgent attention had been written seven months before (in December 2007), and to describe the effect the uncertainty was having on Mr Liu and his family. The letter ended by seeking Mr Samuels' assistance to expedite his application, given the "long delays, overall fairness, requirements for natural justice and the harm the delays and uncertainty were causing Mr Liu and his family".
5.46
On the same day, presumably in response to this request, Mr Samuels sent a further letter to Mr Barker, requesting urgency. The letter was on similar terms to the one he had written and later withdrawn in early April (see paragraphs 5.29 to 5.31).
Mr Liu's second visit to the Citizenship Office
5.47
On 23 May 2008, Mr Liu visited the Manukau Citizenship Office again. At this meeting, the Citizenship Officer went through Mr Liu's application form with him and asked him questions about his identity, use of different visas to travel in and out of Australia, and use of different signatures.
5.48
The Citizenship Officer told us that, at this second meeting, he re-iterated that Mr Liu was unlikely to be granted citizenship because of the outstanding issues with the Interpol Red Notice and Immigration's investigation. He said it was at this point that Mr Liu told him he was confident he would be granted citizenship because of the support he had received from MPs.
5.49
Mr Liu told us through his lawyers that he did not say this, and that he did not say anything that would suggest or imply that he was confident he would be granted citizenship because of the support he received from MPs.
May 2008: File returned to Wellington
Drafting of submission to the Minister
5.50
Towards the end of May 2008, Mr Liu's file was returned from the Manukau Citizenship Office to the Investigations Unit in Wellington. It was decided that the Investigator, rather than one of the Citizenship Officers, would draft the submission to the Minister because some of the information was classified and the Investigator was already familiar with the file.
5.51
Before finalising his draft, the Investigator contacted the other agencies that had supplied information about Mr Liu (including the New Zealand Police and Immigration) to check that the information those agencies had given him was still up to date.
Mr Liu's telephone calls to the Department
5.52
Shortly after the file was returned to Wellington, Mr Liu telephoned the Investigator and claimed that he was stateless because the Chinese government had cancelled his passport. Mr Liu's lawyers emailed the Investigator the next day with the same information. The email also said that Mr Liu feared for his personal safety if he was to be returned to China.
5.53
The following month, on 12 June 2008, Mr Liu called the Investigator again. During their conversation, Mr Liu repeated that he could not return to China because doing so would be a death sentence for him.
Fourth letter from Mr Samuels
5.54
On 1 July 2008, Mr Samuels sent a further letter to Mr Barker, noting that he had not received any substantive response to his earlier letter of 13 May. The letter ends:
I would appreciate if you would advise where this case is at and when a decision will be made.
Delivery of submission
5.55
After the submission was drafted, it was reviewed by the Department's legal staff and General Manager, then signed off by the General Manager.
5.56
The Investigator then contacted Mr Barker's Private Secretary to arrange a time to deliver the submission. At this point, on 30 June, he was told that Mr Barker would not be making the decision on Mr Liu's application because Mr Barker had a conflict of interest. The decision was going to be transferred to the Associate Minister of Immigration, Hon Shane Jones. A letter transferring the decision to Mr Jones was signed by Mr Barker on 3 July 2008.
5.57
The submission and the Department's file on Mr Liu were delivered to Mr Jones' office on 14 July 2008.
Our comments
5.58
Concerns have been raised that the Department's management of Mr Liu's file was subject to political pressure because of his connections with various MPs and their associates, and that Mr Liu received preferential treatment as a result of these connections.
5.59
These concerns have arisen because Mr Liu knew Mr Barker, having met him before he became Minister of Internal Affairs, and also because of the support he had received from the three MPs who advocated on his behalf. Mr Liu is also known to have made donations to certain individuals and political parties.
5.60
Also, in the course of the High Court case brought against Mr Liu in 2012, specific concerns about political interference were raised by the Citizenship Officer who processed Mr Liu's application.
5.61
In our inquiry, we found no evidence that any of the politicians connected to Mr Liu attempted to interfere in an improper way in the decisions made about the management of his file or to improperly influence the decision that was eventually made.
5.62
The General Manager told us that it was his decision to give Mr Liu's file priority and to discontinue the investigation, and that he made these decisions for pragmatic reasons – largely to relieve the pressure on staff caused by the high workload Mr Liu's file was generating, and because further investigation on the Department's part would be unlikely to resolve the outstanding issues, or relieve that pressure.
5.63
We consider that his decision might also have been influenced, at least in part, by general concerns at the time about a backlog in citizenship applications and about the risk that further undue delay might lead to a judicial review. Applicants have a right to apply for citizenship. They can agree to an application being put on hold pending the receipt of further information, but they do not have to – and the Department cannot unilaterally delay an application.
5.64
At the time, the Department did not have a formal policy or process for prioritising files, and the General Manager was acting within his authority when he exercised his discretion to prioritise Mr Liu's file. Similarly, decisions to depart from normal policies and procedures when processing an application were also usually made at a managerial level and without formality. The General Manager was acting within his authority when he decided to discontinue the investigation into Mr Liu's different identities.
5.65
In our view, the General Manager's decisions were made for legitimate reasons but, with hindsight, were unfortunate. They created the impression that Mr Liu was not being subject to the normal process of scrutiny that would apply to other citizenship applicants, and that he was able to "queue jump". Given Mr Liu's political connections and the later decision to authorise the grant of citizenship against the advice of officials, the General Manager's decisions helped create the impression that Mr Liu had received favourable treatment.
5.66
Although we found no evidence of improper political interference in this case, we consider that the Citizenship Officer's suspicions are to some extent understandable. The decisions made about the management of Mr Liu's file were not made by reference to any clear or understood practice or policy, and the rationale for the decisions was not documented. From the information available to him, it appeared to the Citizenship Officer that those decisions were being made as a reaction to pressure being applied to (or felt by) officials in Wellington to give Mr Liu's file special treatment, and that that pressure resulted from Mr Liu's political connections.
5.67
During our inquiry, we were provided with information about other files involving support from MPs or their associates – some from around the same time as Mr Liu's application, some occurring later – and were told of concerns among some Citizenship Officers about the possibility that favouritism was operating within the system.
5.68
Some of these cases involved common links between different applicants, MPs, and their agents (for example, applicants with the same immigration consultant or legal adviser and supported by the same MP). In others, the applicants, or more often their agents or advocates, had sought meetings with the relevant Minister or lobbied the Minister to intervene in the processing of the application (for example, to consider an application urgently).
5.69
We were also shown communications received by one official from applicants (for example, invitations to coffee or dinner), which, it was said, suggested attempts were being made to engender favourable treatment by officials.
5.70
In response to these concerns, we asked the Department to provide us with further information about applications that had been approved despite the Department's recommendation that they be declined, and also samples of some of the files (dating from 2006 to 2010) that had caused concern.
5.71
Our review of these sample files showed that, although all were cases where a decision was made against the Department's recommendation, they did not all involve good character issues. Not all of the applications were successful in the first instance.
5.72
A common reason for recommending that citizenship be declined was that the applicant did not satisfy the English language requirement or had not been resident in New Zealand the required number of days. In some cases, a practice appears to have developed where these types of applications were deferred to allow the applicant time to satisfy the requirements. The applications were then prioritised when they were later resubmitted.
5.73
Our review of the files also showed that, in some cases where applications were deferred, the result was that the applications were subsequently re-considered and approved by a different Minister to the one who had originally declined the application. It also showed that several different MPs were involved in advocating for citizenship applicants.
5.74
A detailed investigation of these cases was beyond the scope of our inquiry. We did not find anything in our review of the files to suggest that decisions had been made as a result of improper influence. However, it is clear that the apparent links between different applicants and their agents or supporters, coupled with strong support from various MPs and subsequent questions about the applications from the relevant Minister or ministerial officials, caused disquiet among some Citizenship Officers.
5.75
Concern was expressed about the pressure placed on them by particularly assertive applicants or agents (some of whom had had personal meetings with the relevant Minister), particularly where the Minister's office had later asked for information about the file. Citizenship Officers asked for guidance from more senior managers about whether it was appropriate for the Minister to intervene in this way, and sought advice on the division of functions between the Minister and officials.
5.76
The advice they were given was that it was acceptable for Ministers to ask for information about an application where the Minister had received communication independently from an applicant or agent, and that this was not the same as a Minister instructing officials to process an application in a particular way. Guidelines were later prepared to help Citizenship Officers manage files where there was ministerial involvement.
5.77
We agree that applicants and their advocates are entitled to approach the Minister directly, and that, in such circumstances, the Minister and ministerial officials need to be able to obtain information about a file in order to respond to the applicant's concerns.
5.78
We also recognise that advocacy – by professional advisers, business and community leaders, and others seen to be able to influence the Minister – is an inevitable part of the decision-making process. There is nothing unlawful or improper in citizenship applicants seeking support, including support from MPs. Advocacy and support for constituents and others is an important part of the role of elected representatives in New Zealand.
5.79
Conversely, there is nothing unlawful or improper in Ministers considering representations and advocacy by or on behalf of applicants in the course of considering an application for citizenship. The ability to gain direct access to decision-makers is often cited as one of the benefits and privileges of living in a small and closely connected country.
5.80
However, advocacy of this kind, in particular where the advocate is a fellow MP or known to the Minister, clearly presents risks to the integrity of the decision-making system and to the reputations of those involved, including the Minister.
5.81
In our view, some of the wider concerns expressed to us during our inquiry about citizenship applications and the role played by advocates are valid. For reasons we explain in more detail in Part 8, we consider that citizenship decisions are particularly vulnerable to the risk of improper influence, or the appearance of it. Particular care needs to be taken to ensure that this risk is properly managed.
5.82
Given the value attached to New Zealand citizenship and the obligation the Citizenship Act places on the Minister to exercise a degree of judgement and discretion, it is inevitable that applicants for citizenship will seek ways to ensure that their applications are viewed in the most favourable light.
5.83
The suspicions that were aroused in Mr Liu's case, and wider concerns some people had about the system generally, raise a question about where the line is drawn between proper and improper influence.
5.84
We consider it would be impractical and undesirable to seek to draw this line by artificially restricting interactions between the Minister and those advocating for citizenship applicants. The key to managing the risks and maintaining confidence in the integrity of the decision-making system is for all those involved in the decision-making process – officials, the Minister, and ministerial advisers – to actively consider not only whether their actions are lawful and proper, but how those actions might look to outside observers.
5.85
Interactions of this kind need to be open and transparent and steps need to be taken by all those involved to ensure that their actions are not open to misinterpretation. That means representations should always be "on the record" and preferably in writing. If meetings take place between the Minister and advocates, a witness should be present who can independently verify what took place.
5.86
Meetings should be minuted, and any decisions made as a result of those meetings should be documented and the rationale for the decisions clearly explained. This is particularly important if the decision involves a departure from normal policy or procedure. Although MPs are entitled to advocate on behalf of applicants, they need to exercise caution about appearing to request special treatment or depart from normal processes for applicants (such as urgency). Ministers, for their part, need to be clear that their decisions have a statutory basis, and that if they are waiving particular requirements of the Act (which, in some circumstances, they are entitled to do) or authorising a grant of citizenship to someone who, on the face of it, does not satisfy the normal policy requirements, they have a justifiable reason for doing so.
5.87
There may well be circumstances in which it may be appropriate to give a person's application priority or to refer it to the Minister without completing all the usual investigative steps. We also recognise that it is important that officials are able to exercise discretion in such matters.
5.88
However, in our view, the Department should consider establishing more formal procedures that determine when exceptions to normal processes should apply and on what basis certain applicants should be given priority. This is particularly so when the applicant receives support from MPs or other prominent people who might be seen to be able to influence the Minister called on to make the decision.
5.89
Although we found nothing to suggest there was improper political interference in the decisions made about the management of Mr Liu's application, the decisions helped to create a perception of improper influence that was reinforced by later events.
5.90
It is also possible that the informality of the decisions to expedite Mr Liu's application and discontinue investigations may have affected the quality of the advice provided to Mr Jones. We discuss this in more detail in the next Part of this report.