Part 8: Other matters related to this inquiry

8.1
In this Part, we explain the involvement of Hon Dover Samuels and other associates of Mr Liu in his application. We also explain some of the particular features of citizenship decision-making that makes it vulnerable to the risk of undue influence, and that have given rise to the perception of undue influence in this case.

Mr Samuels' involvement

8.2
Mr Samuels told us that he got to know Mr Liu and his wife through fund-raising events organised for the Labour Party. He became friends with them, and became aware of the difficulties Mr Liu was having with his residency permit.

8.3
Mr Samuels said he became concerned at the way Mr Liu's case was being handled by Immigration, particularly the apparent assumption that the allegations made against him were true even though no formal findings had been made. Mr Samuels was also concerned about the length of time it was taking to conclude the investigation and the stress this was placing on Mr Liu and his family.

8.4
He spoke to Mr Cunliffe about his concerns and, after the decision was made not to revoke Mr Liu's permanent residency permit, he wrote letters of support for Mr Liu about his citizenship application. Mr Samuels said that he might have approached Mr Barker about the matter but could not recall specifically doing so. Mr Barker told us that, if Mr Samuels had approached him, his response would have been that he should put his concerns in writing, which Mr Samuels later did.

8.5
Mr Samuels told us that once he learned Mr Jones, rather than Mr Barker, was going to make the decision on Mr Liu's application, it is likely that he approached Mr Jones about it. He could not recall specifically doing so, and said that if he did, it was probably a brief and informal conversation in the lobby of Parliament. Mr Jones also could not recall specifically discussing Mr Liu's case with Mr Samuels, but also agreed that he might well have done in the context Mr Samuels described because that was often the way such matters were dealt with.

8.6
Mr Samuels told us that although he supported Mr Liu's application for citizenship, his primary concern was to push for a decision to be made, so that Mr Liu and his family were not "in limbo" and that the proper processes could continue to take their course.

8.7
He told us he did not know Mr Liu had made a donation to his election campaign until after he was called on to sign his election return.

8.8
We found nothing to suggest that Mr Samuels behaved inappropriately in his support for Mr Liu or that Mr Samuels tried to improperly influence the decision made in relation to Mr Liu's citizenship application.

8.9
The approaches Mr Samuels made to Mr Barker were open and "on the record". Although Mr Samuels received a donation from Mr Liu, we found nothing to suggest that his support of Mr Liu was prompted by that donation. Politicians in New Zealand are required to fund their own election campaigns and Mr Liu made similar donations to other individuals and political parties.

Shane Te Pou

8.10
Shane Te Pou was an active Labour Party member and fund-raiser at the time of Mr Liu's citizenship application. He knew Mr Samuels and Mr Barker through his involvement in the Labour Party, and he also knew Mr Barker because they had both once been involved in the trade union movement.

8.11
Mr Te Pou told us that he met Mr Liu and his wife at a fund-raising event and was interested in getting to know them better, partly in a professional capacity because of the financial support they might be willing to make to the Labour Party, and partly for personal reasons because he was interested in pursuing business opportunities in China.

8.12
In March 2005, he arranged a business trip for Mr Liu and his wife to the Hawke's Bay to visit wineries there. Mr Te Pou said that, in the course of that visit, he took the opportunity to catch up with Mr Barker, who was an old friend, and introduced him to Mr Liu. Mr Barker was not Minister of Internal Affairs at the time, and the subject of citizenship did not come up.

8.13
However, on the way home from the trip, Mr Te Pou said that he and Mr Liu discussed the possibility of Mr Liu applying for citizenship. Mr Liu said that he did not think he would be eligible because he had not been in New Zealand the required length of time. Mr Te Pou said that he was aware, through previous dealings, that failure to satisfy all the relevant criteria did not mean citizenship would automatically be declined. He offered to help Mr Liu with his application if he decided to apply for citizenship.

8.14
Mr Liu accepted his offer but said he wanted to keep the matter on a business footing. They agreed that Mr Te Pou would be paid $10,000 for his help, of which $5,000 would be paid up front and the balance would be paid if Mr Liu's application was successful.

8.15
Mr Te Pou told us that at some point, after the application was filed, Mr Liu told him about the problems he was facing with his immigration application. Mr Te Pou said that he realised these were matters beyond his expertise and that Mr Liu needed legal advice. When it became obvious that Mr Liu's citizenship application was unlikely to progress because of the outstanding immigration matters, Mr Te Pou said he withdrew and returned the $5,000 he had been given. He had no further involvement after that.

8.16
Our inquiry found nothing to indicate any improper conduct on Mr Te Pou's part, and we did not find any evidence of any attempt to improperly influence the citizenship decision. Our review of the Department files and discussions with officials show that the only involvement Mr Te Pou had with Mr Liu's application was to help him complete the application form when Mr Liu first applied for citizenship in May 2005.

8.17
There is also a letter on file dated August 2006, in which Mr Te Pou wrote a letter on Mr Liu's behalf, asking for the return of Mr Liu's Chinese birth certificate. We found no evidence of any involvement after that time.

Daniel Phillips

8.18
Daniel Phillips is Shane Te Pou's brother. Like Mr Te Pou, Mr Phillips was an active Labour Party member at the time. Through his involvement in the Labour Party, Mr Phillips knew Mr Samuels. Mr Phillips worked for Mr Samuels for a time in Wellington.

8.19
Mr Phillips told us that he recalled meeting Mr Liu, probably in 2005, and probably at a dinner in Auckland, also attended by Mr Samuels. He said he was also aware of correspondence between Mr Samuels and Mr Liu but was not aware of the nature of it. He did not know at the time that his brother was acting as Mr Liu's agent.

8.20
Mr Phillips later became Mr Jones' Senior Private Secretary. He explained that, as Mr Jones' Senior Private Secretary, his role was largely administrative and involved managing the correspondence into and out of Mr Jones' office. He said that some Senior Private Secretaries also provide advice to Ministers on political or other substantive matters, but he did not because Mr Jones already had a Senior Political Adviser.

8.21
Mr Phillips said that he became aware that Mr Jones was going to be called on to consider Mr Liu's citizenship application shortly after the decision was made to transfer it to Mr Jones. He told us he was called into Mr Jones' office, along with Mr Jones' Private Secretary for immigration matters, and they were told that a file was due to arrive that needed to be kept in the safe because it contained sensitive information. Mr Phillips said it was necessary for him to know the location of the file, in case the other Private Secretary needed access to it, because he was the one who knew the code.

8.22
He said that when he was told about the file he recognised Mr Liu's name but did not mention that he had met him and knew about him through Mr Samuels. He said that this was because he had no expectation that he would be called on to be involved in any discussions about the application. He also assumed that, given he had previously worked in Mr Samuels' office, the connection was generally known about.

8.23
Mr Phillips said that, with hindsight, he probably should have formally declared his connection. But it was one of many matters they were dealing with, and not a matter that had dominated their attention.

8.24
We agree that it would have been wise for Mr Phillips to make his connection with Mr Liu known. However, our review of the Department files and discussions with officials show that Mr Phillips had no involvement in Mr Liu's case other than in a minor administrative capacity. He was not present at either of the briefings Mr Jones had with officials. His only involvement was in liaising with the Department officials to help prepare a response to Mr Billington's request for a copy of the submission, and later in notifying Mr Billington of Mr Jones' decision.

8.25
Other than his failure to declare his connection to Mr Liu, we found nothing to suggest that Mr Phillips acted improperly.

Our comments

8.26
Links and relationships of the kind we have described in this Part and elsewhere in this report are not unusual, and are to be expected in political circles.

8.27
However, there are a number of features of citizenship decisions which make them, in our view, particularly vulnerable to concerns about the risk of undue influence – both actual and perceived – where links and relationships of this kind exist.

Citizenship decisions are decisions about individuals

8.28
The first feature is that citizenship decisions require the Minister to make decisions about individuals. This is a relatively unusual position for Ministers to be in because, as a rule, the decisions Ministers make are more likely to relate to policy or affect sections of the public as a whole.

The Minister is required to exercise judgement and discretion

8.29
The second feature is that citizenship decisions involve the exercise of ministerial discretion. Although there are criteria in the Act that are required to be fulfilled, the Act also requires the Minister to exercise judgement and/or gives the Minister discretion to waive certain requirements. Ministerial discretion was recognised by Ministers and officials as an important feature of the Act.

Advocacy and political donations

8.30
The third feature is that citizenship applications often involve an element of advocacy, whether by lawyers, immigration consultants, community leaders, or others. Where the advocate is known to the Minister, a risk of undue influence – or the perception of it – is automatically created. This is particularly so if the advocate is an MP and the applicant has donated, or later makes a donation, to the MP or the MP's political party.

8.31
This does not mean that MPs and others should be deterred from advocating for citizenship applicants where they consider it appropriate to do so. Advocacy of that kind is an important part of the role of an MP as an elected representative.

8.32
Nor is there anything unlawful or improper in MPs and political parties seeking to raise funds for their election campaigns, provided that it is lawful. Political parties in New Zealand are not state-funded, so they rely on donations to fund their activities.

8.33
However, receiving donations from a person who later seeks help can present difficulties to MPs – particularly if the donation is anonymous (which is permitted within certain limits) and there are obvious difficulties in knowing where the donation has come from. We were told of various methods used by political parties to try to insulate MPs from donations for this reason.

Different cultural expectations

8.34
Finally, citizenship applications, by definition, are often made by people from cultures that are different to New Zealand's. Those people might have different ideas about how they are expected to interact with politicians and government officials.

8.35
All of the MPs we spoke to told us about experiences they had had, or concerns they had felt, about the potential for misunderstandings in this regard. A common example was being photographed at community or fund-raising events and then finding out later that their photograph had been used, without their knowledge or consent, to promote a particular business activity.

8.36
They saw this, to some extent, as an "occupational hazard", but also told us of steps they took to try to avoid the risk that they might be introduced to someone and later, unknowingly, be called on to make a decision about that person, thereby compromising their own reputation or the integrity of the decision-making process.

8.37
Mr Cunliffe, for example, told us about the "double-blind" system that was instigated when he became Minister of Immigration. If a constituent approached Mr Cunliffe's constituency office for help with an immigration matter, the request was automatically referred to another Auckland MP. If the matter progressed as far as requiring a ministerial decision, it would automatically be referred to his Associate Minister.

8.38
Mr Barker told us about his concern that the system for managing ministerial conflicts of interest were not always able to fully protect Ministers from risks of this kind. Often, it was a case of relying on friends, colleagues, and other informal networks to alert Ministers to concerns about particular individuals they might have met in the course of their ministerial or political duties.

8.39
He told us about a ministerial colleague who made a practice of asking people he was introduced to at fund-raising or other public functions to provide him with a copy of their business card. The card was then provided to his staff with instructions to ensure that any correspondence from that individual be dealt with without his involvement, so as to avoid any claims that he had acted for an improper purpose. Mr Barker told us that this practice only came to his attention when the events of this inquiry became public. Had he been aware of this earlier, he said he would have implemented a similar system.

8.40
During our inquiry, we were also shown examples of citizenship applicants offering gifts or hospitality to officials. This was done openly, so the applicant's assumption was presumably that this was either normal or expected behaviour. In all the cases we were made aware of, the intended recipients managed the situation appropriately by declining the offers that had been made to them. But the cases show that people with different cultural backgrounds sometimes have very different ideas about what is expected of them.

8.41
A detailed consideration of these matters is beyond the scope of our inquiry. However, we considered it was important to record them here, because they provide an important part of the context of this case. They also influenced the recommendations we have made.