Sep 14, 2008

All Those Calls last Week Were Not About Getting The Windows Cleaned

Silly Queen Bee. We were a bit perplexed about the frantic activity between a certain office in Wellington and a Christchurch based cleaning company. But now we know that this was not about getting the windows cleaned.

But this doesn't seem the first time there has been contact between NZ First and Mr Calvert

This is an extract from Hansard in 2006. We have highlighted NZ First's attitide to expensive overseas trips. We note also that this speech caused Price Waterhouse to demad a correction on the record. The Speaker agreed to this in December 2006. Those interested may also want to have a look at Calvert v. Pricewaterhouse Coopers HC WN CIV 2002-485-854 [18 August 2004]

RON MARK (NZ First) : This is a sad story of David and Goliath, but, unlike the biblical story, David loses and a smug, corpulent Goliath goes unpunished. George Calvert, a returned serviceman who fought in Malaya, and a self-made man who started by cleaning windows, invested his honestly earned income in an investment scheme called Spacetable, which was sold and promoted up and down the country by PricewaterhouseCoopers.
Inland Revenue investigated the scheme and found it to be a sham. At the time it promoted the Spacetable scheme, PricewaterhouseCoopers gave undertakings to investors that if the Inland Revenue Department challenged the scheme it would defend it all the way to the High Court—a promise it later reneged on. When put to the test, and having pocketed its promoter fees, PricewaterhouseCoopers walked away from its obligations to defend the scheme and simply advised the investors to settle with the Inland Revenue Department and pay their tax penalties. Such settlements were in the best interests of PricewaterhouseCoopers, but not those of the investors.
Mr Calvert was unhappy with this outcome, particularly as PricewaterhouseCoopers had been his tax and financial advisers for many years. He always trusted its professional judgment without question. In fact, the main reason he invested in the Spacetable scheme in the first place was that Peter Croft and Graham Archer—partners in PricewaterhouseCoopers—were already investors personally, along with his own PricewaterhouseCoopers tax adviser, Frank Burgess. Indeed, Peter Croft was, at the time, PricewaterhouseCoopers’ national managing partner for tax.
The second reason for investing was the PricewaterhouseCoopers undertaking to support a tax case to the High Court. When it later reneged on this undertaking it did not refund any of the fees. Mr Calvert felt further betrayed when he subsequently learnt that Peter Croft was the only Spacetable investor not to claim personal tax deductions in respect of the scheme, thus completely escaping any personal tax penalties.
To make matters even worse, Mr Calvert then learned that Messrs Croft and Archer had personally profited from his investment when they purloined some of the Spacetable promoter fees by reducing the PricewaterhouseCoopers invoices issued in respect of Spacetable and applying the difference to personal expenditure. This personal expenditure consisted of a first-class, no expenses spared junket, together with their wives, to attend the Bledisloe Cup game in Sydney.
This scandalous behaviour is not only tax evasion—an imprisonable offence—but constitutes a secret commission subject to the Secret Commissions Act of 1910, which prohibits such behaviour.
Furthermore, it is a fraud on the PricewaterhouseCoopers partnership. Even though this criminal behaviour has been brought to the attention of the PricewaterhouseCoopers chairman, John Shewan, it is curious that the matter has still not been referred to the police and that Graham Archer remains a senior partner with PricewaterhouseCoopers today. What is more, I understand that when an Inland Revenue senior inspector was apprised of the situation, he was instructed to drop the matter because of the influence of John Shewan.

The questions remain. Who within PricewaterhouseCoopers or the Inland Revenue Department instructed a senior inspector to stop investigating this blatant case of tax evasion committed jointly by Messrs Croft and Archer and the PricewaterhouseCoopers partnership itself? It is scandalous that such an elite treatment be extended to individuals who have an earning capacity in the millions and have evaded tax out of sheer greed rather than necessity, and the little guy—the former soldier from 1st Battalion, who started from the bottom, who saw active service on behalf of his country in Malaya—is shafted while the fat cat corporates walk away unscathed.
Members should rest assured that New Zealand First will be back in the House asking questions on this matter. I seek the leave of the House to table a carton of documents. They are documents from the Wellington High Court, documents from Corporate Risks, and documents relating to Capital Fund (Management) Ltd—all relating to the speech I have just given.
Documents, by leave, laid on the Table of the House.