11 April 2005 Media Statement

Prime Minister's Statement on the Inspector-General's Report on Alleged 'Operation Leaf'

I have received a letter and report dated 31 March from the Inspector-General of Intelligence and Security about last year’s allegations by the Sunday Star-Times and Scoop that the Security Intelligence Service was bugging law-abiding Maori for political intelligence.

The stories, signed by Anthony Hubbard and Nicky Hager for the Sunday Star-Times and Selwyn Manning for Scoop, were said to be based on reports by “dissident spies” involved in an alleged “Operation Leaf”.

I can confirm today that the Security Intelligence Service had no operation called Operation Leaf, or anything like it. The same applies to a so-called Operation Weasel.

The Inspector-General’s conclusion, stated in his covering letter to me, “is that the reaction of the Director of Security when the material was published was correct: the story, apart from some base facts about dealings with one iwi, was a work of fiction on the part of the newspaper’s sources”. The Inspector General found no connection whatsoever between work done on the iwi's computer and the SIS.

The Inspector General's report is in two parts. The first, containing 141 paragraphs and four annexes, is unclassified. The second, 52 paragraphs long, is classified by the Inspector-General because it contains considerable detail about Security Intelligence Service operational matters and some other material regarded by the Inspector-General as confidential. Part 2 will therefore be withheld, but I am making Part 1 available in its entirety to the media.

This is a very thorough report and I am grateful to the Inspector-General for the trouble he has taken to get to the bottom of these baseless allegations.

The Inspector-General:

- succeeded in identifying the three sources of the Sunday Star-Times. They are Messrs Jack Sanders, Gerald Thorns, and Steven Buttell. The Inspector-General found however, (paragraph 124), that “there was only one real source, Mr Buttell. … Mr Buttell is the only one said to have done anything on behalf of the SIS”. His claim was false.

- accepted (paragraph 131) “that Mr Buttell worked on one iwi’s computers for a period as a friend of a friend. … Beyond that, there is nothing to suggest that his allegations are true and a good deal that points to them not being true”.

- concluded (paragraph 139) that “the whole picture points to the three people not being credit worthy on this matter, and that is my view of them”.

- concluded (paragraph 69) that Scoop’s contact was Mr Thorns who “was not therefore someone able to confirm independently what the Sunday Star-Times had published: he was one of the three sources with whom the newspaper had been in touch”.

- formed the view (paragraph 92) that there was “no basis for believing the claims about Mr Thorns’ ‘connections’ or standing in government or intelligence circles which were advanced to give weight to his opinion, and I do not”.

- met representatives of two iwi, one for whom Mr Buttell had indeed done some computer work and one named by Scoop. The Inspector General had no reason to doubt anything that was said to him by those iwi representatives, and in his investigations of the SIS records found nothing to indicate that the representatives of the iwi in question were of any interest to the SIS (paragraphs 101, 102, 112, 114).

- stated (paragraph 129) that “inquiries within the Service’s premises, general records and financial documents have found no trace of the names of the people central to the allegations in any role: target, source, staff or contractor, nor any evidence of payment to any of them, nor of any information said to have been obtained in the way described”.

- came to the overall conclusion expressed in paragraph 140 “that (apart from Mr Buttell’s having worked on one iwi’s computer as a friend) the story told to the Sunday Star-Times reporter about NZSIS activity was not true. Scoop’s endorsement of the truth of it is of no value.”

The Inspector-General does not express any judgement about the Sunday Star-Times’ decision to publish. He does not think his jurisdiction extends that far.

To recap:

Both the Sunday Star-Times and Scoop printed a story about alleged SIS spying on Maori. The Director of Security assured me at the time that the story was a “work of fiction”.

The Inspector-General has made exhaustive enquiries, during which he had unrestricted access to SIS records, premises and staff. He has concluded that the Director of Security's reaction was correct and that the story was not true.

The story was based on allegations made by people described by the Sunday Star-Times as “three spies”. The Inspector-General has managed to identify these people. One of the three was also Scoop’s sole source.

The Inspector-General has found no evidence that these people had any connection with the Security Intelligence Service. He does not believe the claim made by Scoop that its source has standing in government and intelligence circles. He says the three people are not credit worthy on this matter.

The Sunday Star-Times and Scoop may wish to give the Inspector-General’s findings the same prominence as they gave to their original story. They may wish to apologise to their readers and to the SIS for having printed an untrue and damaging story.

ENDS

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