The dust has now settled on the Owen Glenn political finance scandal, which means it’s probably an appropriate time to make some observations and conclusions about Glenn and his involvement with political parties in New Zealand. Future posts will show how this political finance scandal illustrates that the Labour Party is every bit as much of a corporate-sponsored party as National is, and that Labour is hypocritical and self-serving when it comes to the issue of political finance and regulation. This post is the first of five about ‘Glenngate’. This first post attempts to provide a summary of what actually occurred. [Read more below]
Helen Clark and Owen Glenn meet
Helen Clark and Owen Glenn first met in 2003 when attending a yachting function on Kawau Island, during the Millennium Cup Super Yacht regatta. The two met again at a tourism dinner in Sydney where Glenn offered to help the Labour Party financially. Clark passed on his details to Labour Party president Mike Williams. No transactions were immediately made however, because both Williams and Clark apparently forgot Glenn’s identity and lost his business card – which probably says something about the large number of business donors that Williams and Clark deal with when fundraising for the party.
Fortunately for Labour, Glenn eventually re-initiated contact and donated five monthly installments of $100,000 each – which amounted to $199,960 in November 2004 and $300,000 in 2005. In the 2003-05 electoral cycle, Glenn’s substantial donations made up 36% of Labour's total $1.35m donation declared to the Electoral Commission.
Why did Owen Glenn donate to Labour?
Four years after making the donations, Owen Glenn told the Dominion Post he had made the decision to donate $500,000 while on his yacht in the Caribbean. He said that he was spurred on after hearing about the ‘sneaky’ way in which the Exclusive Brethrens had reportedly tried to hide the fact it was behind their publicity campaign against Labour and the Greens in 2005. Glenn says, ‘There was a little bit of controversy to do with some church that had done something and I thought, “Poor old Labour”.’ Likewise: ‘I just thought it would be a good thing to do ... spice up the race a little bit.’ This rationale is, however, inconsistent with the dates that the donations were made – which was many months before the Exclusive Brethren’s campaign was made public (in September 2005).
Glenn has also offered further ideological justification for supporting Labour – reasons that relate to Helen Clark and the Labour Government’s rightwing foreign policy and trade initiatives. Glenn was reported as saying that ‘he liked the way Clark governed the country and felt she stacked up well on the international scene’. He was quoted as saying, ‘I particularly like her stance on seeking free-trade agreements with China and the United States.’
The quid pro quo
Following these substantial donations, Clark and Glenn then shared a table at an Auckland University dinner in 2006. It was at this dinner, according to Glenn, that the prime minister tried to lure him into politics, suggesting that he could be given a Cabinet post. Presumably she was willing to assist him to a high spot on Labour’s party list. She had suggested, according to Glenn, ‘that with his background, he would be a sitter for the transport portfolio’. According to Glenn, he then outlined to Clark why he wouldn’t want the job: privatization of state assets meant there was little to be manage, and the airline situation was precarious with Qantas now closing in on Air New Zealand. To this, Clark allegedly replied that this situation might not have happened if Glenn had been in Cabinet. Glenn retold this story to a Dominion Post journalist in 2008, Clark then denied it, at which point Glenn also issued a press release that tried to backtrack on some of his claims but created even less clarity about the relationship.
Donation to the Business School
In the same year that Clark allegedly offered Glenn a place at the top of the Labour Government, he also donated $7.5 million to Auckland University towards the cost of a new business school. The University agreed to repay Glenn by naming the new six-storey building ‘The Owen G Glenn Building’. This was not Glenn’s first donation to the university. In 2003 he donated $500,000 towards the establishment of a Chair in Marine Science. He is also donating a further $600,000 per year for scholarships.
The Glenngate scandal began to develop in the public sphere at the end of 2007 when the Labour Government announced that Glenn was to be awarded the honour of Officer of the New Zealand Order of Merit. Helen Clark clarified to critical media that although the award was being given to the expatriate billionaire in appreciation of his generous donation, the donation in question was not the political donation to Labour but the donation to the business school. She also suggested that Labour wished to celebrate Glenn’s success as a businessperson. Clark said: ‘The reason for him receiving an honour relates to his extraordinary generosity to the University of Auckland and also that he would be one of the most successful businesspeople to have come out of New Zealand and done well on the world stage.’
The Interest-free loan to Labour
In the same year that he was given the government honour, Glenn also agreed to loan the Labour Party $100,000 so that the party could start a professional fund-raising operation. The money was lent to the party in November 2006 and repaid by the end of 2007.
Glenn’s loan, negotiated by Mike Williams, was made to Labour at a 0% interest rate, which effectively meant that Glenn was forgoing an interest payment of at least $7,500. Both the Electoral Act 1993 and the Electoral Finance Act clearly stated that such foregone interest qualifies as a donation. (Of course, only donations over $10,000 are required to be declared to the Electoral Commission). Yet in December 2007 when the government award to Glenn was announced, Williams sought to calm critics fears by stating that the Labour Party had not received any further donations from Glenn since 2005. He choose to keep quiet on the interest free donation, when many people were interested to know if Glenn’s government honour was connected to any largesse provided to the party of government.
Many critics felt that ‘it was highly unethical for Labour to give him a honour without revealing the interest free loan he had made to them’. After all, at the very time when they were voting to give him an honour, the Labour Party was the secret recipients of an interest free loan.
Williams denial of the Glenn loan donation eventually caused him to privately offer his resignation to the Prime Minister. This was refused, but the fact that it occurred illustrated how seriously Labour took the scandal. Also, the fact that this private resignation was leaked to the media raised the issue of the internal disagreement within the leadership of Labour.
Cash for appointment
Owen Glenn’s political donations also came under further scrutiny, due to his request to be appointed as the Government’s Honourary Consul to Monaco. Such diplomatic positions are paid only a nominal fee but are seen as highly desirable to businesspeople because they afford invaluable access to elected representatives, government officials, and other businesspeople.
Owen Glenn made his request for the appointment to Mike Williams, who had dealt with Glenn over his Labour Party financial contributions. The request for the diplomatic post was duly given to the Prime Minister who, according to Glenn, approved the request and passed informed the Minister of Foreign Affairs, Winston Peters. Glenn says that Clark told Peters to ‘get on with it’. This was denied by Clark, who although refusing to answer many questions about the scandal, was willing to say that ‘I became aware that Mr Glenn had expressed an interest. Since becoming aware I discussed the matter with Mr Peters. Mr Williams has also talked to me about it’. The next step in the process was for Glenn to meet Peters, which he did at the Rugby World Cup in Paris. The two met over breakfast to discuss the possibility.
One problem for the Government with appointing Glenn was the fact that it had already ‘repeatedly turned down requests from Monaco's honorary consul in New Zealand for a reciprocal appointment in the principality’. It suddenly seemed odd that the Government would be appointing an Honorary Consul that had donated large amounts of money to the Labour Party.
It was then rumoured in 2008 that Glenn subsequently donated money to the New Zealand First party as well. This allegation was made after Glenn admitted to making donations to another political party in addition to Labour. The scandal became more interesting when Glenn refused to deny that he made the donation to New Zealand First, and then Party president Dail Jones told the media that in December 2007 an anonymous donation of nearly $100,000 had been made to the party. Party leader Winston Peters subsequently denied the donation but refused to give clear answers to many related questions.
2008: The scandal breaks
In early 2008, Glenn was back in the New Zealand for the opening of the School of Business that he sponsored at Auckland University. This visit produced more drama and information for the scandal. First he gave an interview to the Dominion Post where he brought to light Helen Clark’s offer of a place in politics for the businessman. Second, Helen Clark turned the opening of the Business School into a media farce by refused to be seen in public with her main financial donor. Despite praising Glenn highly in the media, it now seemed that he was to be publicly disassociated from the Prime Minister.
On the night of the opening, Clark ensured that Glenn wasn’t allowed to get close to her. She did this by using Trevor Mallard as her informal bodyguard to keep Glenn at bay. When it came to the ceremonial hongi, Clark and Glenn conspicuously avoided touching noses. Other prominent members of Labour’s delegation – such as Peter Davis and Trevor Mallard – hongied with Glenn, but Labour tried to use Maori culture as an excuse not to. Minister Judith Tizard said that Clark followed Ngati Whatua custom ‘that women don't hongi’. This excuse was exposed when Ngati Whatua Orakei Maori Trust Board chairman Grant Hawke, rejected that such custom existed: ‘We all hongi’, he said.
This summary is a work-in-progress. Please feel free to let me know of any inaccuracies or significant omissions from the story.