National Party leader John Key says he was never involved in the white collar scam known as the H-Fee transactions and Labour's attempt to link him to it is a desperate election tactic.
The New Zealand Herald's website reported today Mr Key faced accusations of misleading the public about his knowledge of one of the country's most notorious white collar crimes.
The allegations centre around the H-Fee -- two payments totalling $A66.5 million to Equiticorp funnelled via sham foreign exchange transactions in 1988 -- and an interview Mr Key gave the Herald last year.
During the interview in August 2007 Mr Key confirmed he worked as a foreign exchange dealer at Elders Merchant Finance, part of Elders IXL, which made the payments to the Allan Hawkins-controlled Equiticorp.
But he said he left Elders in 1987, before the transactions were processed, and was never involved in them.
The Herald said it had read court files which contained a statement by Mr Key in which he said he resigned from Elders on June 24, 1988, six months after the first payment was made.
It said the documents were made public by the Labour Party, which was going to drop the "bombshell" tomorrow.
Mr Key issued a statement tonight saying it was nothing more than "a desperate smear" 10 days from the election.
"I have never been involved in the H-Fee transaction," he said.
"The Serious Fraud Office director at the time has confirmed that."
Mr Key said he had previously clarified the date he left Elders and Labour was trying to link him with the issue again.
"Labour is clearly scraping the bottom of the barrel and will stop at no lie or innuendo," Mr Key said.
Prime Minister Helen Clark said if the Herald had published the story then the newspaper obviously believed there were questions to answer.
She said she was not handling it, but whether it was a "bombshell" depended on the answers to the questions raised by the story.
The former Serious Fraud Office (SFO) director, Charles Sturt, said on August 25, 2007, that Mr Key was not involved in the H-Fee scam.
The SFO interviewed Mr Key about it, and Mr Sturt said he was one of many innocent people in a massive fact-gathering exercise.
"It should not need to be said that John Key was completely innocent of any wrongdoing whatsoever," Mr Sturt said.
"For any politician to hint or suggest otherwise would be absolute rubbish and pure mischief-making."
