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Sludge Report #51 – Whose Treason?

In this edition: Whose Treason? – Shooting The Messenger

NOTE: Authors of this report will be anonymous and wide ranging, and occasionally finely balanced. Indeed you are invited to contribute: The format is as a reporters notebook. It will be published as and when material is available. C.D. Sludge can be contacted at The Sludge Report is available as a free email service..Click HERE - to subscribe...

Sludge Report #50

If anyone in the last week deserved to be accused of fiscal treason, it was the Hon Winston Peters.

Congratulations Winnie. You’ve helped to sink one of the more interesting and entrepreneurial attempts by a New Zealand SOE to break into the big-time. Whoever has been feeding you all that back-channel dirt that helped sink the Airways Corporation/Lockheed bid for Britain’s National Air Transport System (NATS) will be considering their time very well spent indeed.

What with Winston being such an uncorruptable chap, there wouldn’t even have needed to be a cheque or a nice trip to, oh let’s say the south of France, or even a few flash meals to get him to do the dirty work.

Of course, it would be defamatory to suggest that a very large, very French corporation with aspirations as big as Lockheed’s to dominate global air traffic control could possibly have seeded any of the damaging revelations that have helped sink the Airways/Lockheed bid.

As a generic observation, however, it would be fair to say that French corporate ethics are notable for their, shall we say, flexibility. Local observers who’ve gone up against the French in a couple of recent Australasian infrastructure tenders have been staggered at the inducements, favours, and skulduggery that some French firms will indulge in to get their own way.

After all, it would hardly require Machiavelli to dream up a strategy aimed at sinking a global-scaled competitor - Lockheed - by attacking its minnow-sized partner in the deal - Airways Corp of NZ.

And if that wasn’t enough, isn’t it interesting how somehow or other the British airways unions became so well-informed in such a timely way about disgraced former NZ Treasury official-turned-senior UK aero-crat Doug Andrew.

The mustachioed Rogernome left NZ in the early 90’s after the High Court found that he had behaved unacceptably in the NZ Steel privatisation to Equiticorp.

Now, none of this is to suggest that Andrew has been unfairly maligned. Although he is not corruptible either, he was most foolish in the Equiticorp/NZ Steel saga.

Nor was the bizarrely named former Airways Corp staffer Ezequiel Trumper, who helped Peters blow the whistle last year, necessarily wrong to gripe that Airways senior execs were spending more time in Britain than running NZ’s air traffic control system. At the very least, Airways slipped up badly by not keeping their Ministers properly informed.

What is interesting, though, is that the attacks on NZ elements have sunk Lockheed’s chances of bidding for the UK’s NATS.

In Sludge’s opinion, the sinking of this bid has more to it than meets the eye. There is a distinctly orchestrated feel to the discrediting that has gone on, and a pathetically unquestioning line by the New Zealand political media who, as usual, couldn’t write a business story to save themselves.

Much easier to write a Peters vs Airways slugfest than to look into a deal that shows Airways Corp trying to position itself as a player in one of the four or five global air traffic alliances that are starting to emerge.

If Lockheed decides Airways NZ is a liability, the big US player will cut its ties and, shock horror, we will either end up with a diddlysquat air traffic controller that will have to go into foreign hands anyway, or an air traffic control system that is as cash and technology-starved as most other areas of NZ’s public infrastructure.

With its deep involvement already in Pacific and North American air traffic control systems, Airways was an entirely credible bidder for NATS as long as it was doing it in partnership with Lockheed. The $3 million spent on developing the deal is chump change compared to what might have been had the Lockheed/Airways bid been successful.

What a tragedy that we have so little faith in our own companies - state-owned or otherwise - to be smart and entrepreneurial that the Airways effort could not be applauded, but had instead to be pulled down.

Shooting The Messenger

Talking of fiscal treason. Sludge would like to place on the record an assurance that Scoop has not been involved in any, either willingly or inadvertently. All we have done is report this story as it unfolded. Not that doing so has been particularly easy.

On Tuesday last week Scoop received a report from the UK under the byline “Samantha Shot – NZReporter” asserting that that the Airways bid was all but dead.

While the origins of the story did appear a little peculiar – “Samantha Shot” would appear to be a pseudonym - the report did appear to have been written by a journalist, and a considerable amount of work had gone into it.

An inquiry asking Samantha who she was furnished no answers beyond the fact she was a UK based freelancer – and after due consideration (given that Lockheed is the manufacturer of the B52 Bomber) – Scoop decided it was probably not unreasonable for Samantha, whoever she is, to be a bit paranoid. (Even Sludge has been known to get a bit weird when chasing an exciting story.)

And so to cut the story short Scoop then decided to publish the report.

AIRWAYS FAILS IN UK BID - Early exit shocks SOE

Later that afternoon SOE Minister Mark Burton denied the contents of the report, and others similar, in the house during question time. It turned out NZPA had also carried a report quoting Airways management dismissing the reports, though they hadn’t issued a press release. Later in the afternoon Scoop then received a call from an Airways PR person who wanted to 1) find out who Samantha Shot was, and 2) encourage Scoop to delete the story if possible.

Scoop decided to attach the SOE’s strong denials to the story, but to let it run. On the face of it, given the strong reactions Samantha Shot appeared to be receiving, Scoop concluded that what we had here was a genuine scoop.

On Thursday morning Samantha’s second report was filed. And a great report it was too.

Airway’s bid was indeed scuttled and Mark Burton was, according to Samantha’s sources, now being criticised from his own back benches.

Again Scoop ran Samantha’s story.

By late afternoon the Minister had confirmed the kernel of the story, namely that the Airways/Lockheed consortium was now officially on the “B list” as far as the UK authorities were concerned.

It appeared that once again Scoop had lived up to its moniker, “Tomorrow’s news today.” In this case we had delivered Thursday’s news on Tuesday.

But then Scoop received a phone call that somewhat ruined the moment.

The SOE Minister, our caller informed us, was concerned that Samantha Shot’s story was defamatory. While her facts were essentially correct, her unnamed Labour back-benchers were considered to be fabrications. Scoop raised the Lange vs Atkinson defence in mitigation but it seemed that was going to impress no-one this evening.

And so – especially since Scoop had no idea who the back-bencher in question was - Scoop had little choice but to kill Samantha’s story. Which it did.

Anti©opyright Sludge 2001

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