EXCLUSIVE - Panama Papers NZ - New Zealand law firms that lobbied the government in 2014 against shutting down the foreign trust industry in this country had extensive links to Mossack Fonseca.
Four of the five firms that met with and lobbied the then Revenue Minister Todd McClay have done a varying amount of business with the controversial Panamanian law firm, with Auckland-based firm Cone Marshall featuring most prominently.
The Panama Papers also show the man who has long handled Prime Minister John Key's personal legal matters, Ken Whitney, had links to Mossack Fonseca through two companies - registered in the British Virgin Islands, with Mossack Fonseca as their agent. Mr Whitney also acted as a referee for Karen Marshall of Cone Marshall in 2009.
Foreign trusts and New Zealand's rules have been under the spotlight since the release of the Panama Papers, which revealed how the Panamanian law firm orchestrated a worldwide web of companies designed to let people hide money and avoid taxes.
A collaborative team of reporters from RNZ, One News and the investigative reporter Nicky Hager has been working together, examining a database of 11 million leaked documents and identifying stories linked to New Zealand.
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Directors for hire
The Pamana Papers show that along with Roger Thompson of Bentleys, a group of New Zealand law firms has been doing a significant amount of business with Mossack Fonseca, setting up companies and trusts.
Various lawyers also act as directors, secretaries, treasurers and liquidators for dozens of trusts and companies set up and registered overseas, many of them in the British Virgin Islands (BVI). In some cases, the law firms also provide registered addresses for the companies and trusts to use.
The Papers show lawyers who made a strong representation to the government about maintaining the status quo, concerned about rumours the Inland Revenue Department (IRD) intended to shut the industry down, have done a significant amount of work with Mossack Fonseca.
Representatives of five New Zealand law firms met with the then Revenue Minister Todd McClay at the end of 2014, concerned the Inland Revenue Department was moving to "shut down" New Zealand's foreign trust industry which the lawyers argued has a "high profile" in international circles, and provides a valuable contribution to the New Zealand economy.
The Papers show all of the law firms present in that meeting, except Antipodes Trust Group, have done business with Mossack Fonseca. There are documents up until the end of 2015, but there is nothing to suggest the companies' contact with Mossack Fonseca has ceased.
The Auckland based law firm Cone Marshall is the most active.
To put it into some context, that firm is mentioned 357 times in the Papers. Its director, Karen Marshall, is listed as being a past or present director, secretary or treasurer of 214 Panamanian registered companies, and 1023 in New Zealand.
Her partner Geoffrey Cone shows up in the Papers 181 times, and registers in similar numbers to Karen Marshall on Panamanian and New Zealand registered companies - 181 Panama and 1017 in New Zealand.
Other firms featured in the Papers include Anchor Trustees, John W. Hart and Asiaciti Trust. A meeting note from Mossack Fonseca in late 2012 logs a meeting with Mr Hart and Mossack Fonseca representatives during which Mr Hart "clearly understands our industry and was very open to work with us", while noting he was already working with some other firms in Panama.
Mr Hart was in Panama for a conference when he attended the meeting; at the time he was the President of STEP New Zealand, an association that describes itself as a "worldwide professional association for those advising families across generations".
However, the Papers also show Mr Hart had been doing business with Mossack Fonseca as far back as 2007.
Close connections in the industry
The people working in the foreign trust industry work together closely.
Ken Whitney acted as a referee for Karen Marshall and in the same way, Mr Hart vouched for lawyers Michael Reynolds and Nicholas Shepherd in 2009, saying he had known them for 15 years, both professionally and personally.
Mr Reynolds and Mr Shepherd have both done business with Mossack Fonseca as part of Anchor Trustees International Limited over past years.
One of the questions we asked Roger Thompson of Bentleys was whether he acts as a "director for hire", to which he responded:
"Like many accountants and lawyers I will accept professional director appointments for well-regarded clients after undertaking satisfactory due diligence."
We also put a range of questions to Cone Marshall, Anchor Trustees, Asiaciti Trust, and John W. Hart about their business dealings with Mossack Fonseca, the due diligence they carry out on prospective clients, whether they act as 'directors for hire' and whether they actively promote New Zealand to potential clients in South America.
None have responded to requests for either an interview, or a written response.
Bentleys did a lot of work establishing foreign trusts for Mossack Fonseca clients, often aided by one or more of the other foreign trust companies.
The way other New Zealand firms worked with Mossack Fonseca is demonstrated in emails sent during October 2014, when the Auckland firm Cone Marshall was seeking status as an "Eligible Introducer" with the Panamanian law firm.
Mossack Fonseca advised Karen Marshall that under the BVI Anti-Money Laundering Code of Practice, the criteria for Eligible Introducers included "conducting, verifying and obtaining Customer Due Diligence" of their clients, having all information readily available if authorities request it, and being a "regulated person in their respective jurisdiction".
Karen Marshall assured Mossack Fonseca the company was regulated by the New Zealand Law Society and while not currently covered by New Zealand Anti-Money Laundering laws, it "complies with all standards of the legislation."
Cone Marshall was duly confirmed as an "Eligible Introducer" for Mossack Fonseca in November, just a month before company representatives would meet with and lobby minister Todd McClay.
Ken Whitney's connections
Ken Whitney has for many years handled John Key's personal legal matters; Mr Key no longer refers to Mr Whitney as "his lawyer" because he has let his practising certificate lapse. When Mr Whitney's name first surfaced in relation to the meeting between the group of trust lawyers and Todd McClay, Mr Key defended his integrity.
According to the Prime Minister, Ken Whitney gave him assurances he had no link at all to Mossack Fonseca, either past or present, after the first release of the Panama Papers in early April.
However, the Panama Papers show Mr Whitney was a director of the Rothschild Trust (NZ) Limited, which owned and was the sole director of a company registered in the British Virgin Islands (BVI) that had Mossack Fonseca as its agent - Capewood Investments.
The Papers demonstrate the complex ownership structure: the sole shareholder of Capewood was Arrow Master Holdings - which is fully owned by Rothschild NZ.
Or in simpler terms, Rothschild NZ was the actual owner of Capewood, and the Director.
Mossack Fonseca was the registered agent of Capewood when Rothschild NZ took over in 2012.
Alongside Mr Whitney on the Rothschild NZ board were a number of New Zealand lawyers, who appear time and time again in the Panama Papers, most notably Karen Marshall of Cone Marshall (and Claire Cooke of Cone Marshall).
Mr Whitney resigned as a director of Rothschild NZ sometime after April 2014.
Rothschild NZ was also the owner and a director of Exchange Securities Limited - it too had Mossack Fonseca as an agent and was registered in BVI.
Exchange Securities was liquidated by Mossack Fonseca in 2014.
A Rothschild staff member wrote to Mossack Fonseca directing it to proceed with the liquidation because "the company is held by a Trust and all the trust funds have been appointed to the beneficiary". That beneficiary is not identified in the email exchange.
That company had a similar structure to Capewood - Rothschild NZ was one of the directors and Arrow Master Holdings was the shareholder (itself owned by Rothschild NZ). Ken Whitney was still a director of Rothschild NZ at the time, according to the documents.
Mr Whitney also acted as a reference in January 2009 for one of the lawyers who would go on to do a significant amount of work with Mossack Fonseca, Karen Marshall.
We posed a number of questions to Mr Whitney, including about his links to Mossack Fonseca and the assurances he gave to the Prime Minister, but Mr Whitney repeatedly told us he had no comment to make.
Key's blind trust 'Aldgate Trust'
Making one, brief appearance in the Panama Papers were lawyers from the firm that runs the Prime Minister's blind trust the Aldgate Trust, Taylor Grant Tesiram.
A meeting between Richard Taylor and Israel Vaealiki and Mossack Fonseca's Rogelio Fernandez and Egbert Wetherborne was logged in 2012. During the meeting they discussed the company structure in New Zealand and the Anti-Money Laundering (AML) legislation.
The Mossack Fonseca representatives made the following observations: "The meeting was a very good opportunity to ask several questions in regard to onshore products from NZ like NZ Trust, LTCs and LPs.
"They shared with us some of their thoughts in regard to AML legislation, and some of the substance requirements that NZ companies must have. They said that Due Diligence varies depending on the client and the type of business."
They said they shared information with the Taylor Grant Tesiram lawyers "in regard to Mossfon products" but said the two lawyers did not show "much interest" in that. They conclude while the meeting was positive they didn't feel the Auckland firm was a ""potential provider/client for Mossack Fonseca".
*The investigation into New Zealand links in the Panama Papers is a journalistic collaboration by reporters from RNZ News, One News and investigative journalist Nicky Hager, and with the assistance of the International Consortium of Investigative Journalists and the German newspaper Süddeutsche Zeitung.