VZCZCXRO8471
RR RUEHNZ
DE RUEHWL #0220/01 0811927
ZNR UUUUU ZZH
R 221927Z MAR 06
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC 2549
RUEHNZ/AMCONSUL AUCKLAND 0692
INFO RUEKJCS/SECDEF WASHINGTON DC
RHHMUNA/CDR USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 02 WELLINGTON 000220 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE FOR EAP/ANP - DAN RICCI 
SECDEF FOR OSD/ISA LIZ PHU 
PACOM FOR JO1E/J2/J233/J5/SJFHQ 
 
E.O. 12958: N/A 
TAGS: PGOV NZ
SUBJECT: POSSIBLE FUTURE LABOUR PARTY LEADER RESIGNS FROM CABINET 
AMID ALLEGATIONS OF ILLEGALITY. 
 
 
¶1. (SBU) New Zealand's political landscape has been shaken by the 
resignation from Cabinet of David Parker, a talented Labour MP 
viewed as a potential future party leader, only five months after he 
was first elevated from the backbenches.  The resignation followed 
magazine allegations that Parker filed false company returns both 
before and during his time in Parliament. This case exposes a 
greater problem for Labour beyond losing a key Cabinet Minister to 
yet another scandal: the Party has few untapped MPs of sufficient 
intellectual heft to fill leadership positions. 
 
Bogus declarations result in dramatic resignations. 
--------------------------------------------- ----- 
¶2. (SBU) The Investigate magazine has alleged that Parker made false 
statements to the Companies Office about the company in which he was 
in partnership with his father and a Dunedin property developer. 
Once these allegations were in the public domain, the 
legally-trained Parker quickly admitted culpability expressing deep 
regret for what he calls "mistakes" and "corner cutting". 
¶3. (SBU) In a two-step resignation, Parker at first only quit his 
post as Attorney-General, the Government's chief legal office. But 
after consultation with senior Cabinet ministers, Parker resigned 
from his remaining Cabinet responsibilities in transport, energy and 
climate change policy.  The media has also reported that Parker 
resigned because Prime Minister Clark had lost confidence in him. 
When asked whether she would have asked for his resignation if he 
had not offered it, Clark said "it probably would have come to that 
but it didn't need to". 
Labour has lost a rare commodity. 
-------------------------------- 
 
¶4. (SBU) Parker was a twofold rarity among Labour: a lawyer and 
someone with leadership potential. He was widely recognized as 
Labour's rising star. Such was Clark's confidence in Parker's 
abilities that he was promoted to Cabinet after only a solitary term 
in Parliament. (He had also lost his electoral seat, returning as a 
list candidate.)  Moreover, Carter was tasked with managing the 
broad sweep of the New Zealand's vital yet problematic 
infrastructure, as well the country's Kyoto Protocol commitments. 
 
Resignation underscores a greater problem for Labour. 
--------------------------------------------- ------- 
 
¶5. (SBU) Clark has now returned Parker's portfolios to ministers who 
have shouldered these responsibilities in the past. Deputy Prime 
Minister Michael Cullen re-acquires the Attorney-General role; 
transport and responsibility for climate change policy once again 
goes to Health Minister Pete Hodgson; and the energy portfolio 
returns to Economic Development Minister Trevor Mallard. 
 
¶6.  (SBU) By resigning, Parker has prevented the scandal from 
widening, and has generally gotten good press in local media for 
having done the right thing.  Even before his resignation, 
opposition MPs seemed reluctant to attack Labour over Parker, who is 
generally liked and respected. 
 
¶7. (SBU) The real problem for Labour is that this scandal has 
exposed the glaring lack of depth at this elevated level of 
policymaking within Labour's ranks. Although Hodgson and Mallard 
will operate on an acting basis in the foreseeable future, it is 
clear that after two full terms in power, Labour has failed to 
effectively rejuvenate its ranks with new MPs capable of doing the 
heavy lifting of Cabinet. The combination of weary incumbents and a 
shallow talent pool within the Labour caucus could put it at a 
distinct comparative disadvantage when measured up to the 
well-stocked and energized opposition National Party at the next 
election. 
 
Scandals fast becoming a growth industry within Labour. 
--------------------------------------------- --------- 
¶8. (SBU) This scandal also comes at a bad time for Clark, whose 
Government is already engaged in a longstanding and bitter scandal 
involving allegations of Labour Cabinet Minister David Benson Pope's 
past impropriety (Wellington 195). Since Labour came to power in 
1999, counting Parker, ten Labour ministers have been fired, 
resigned or stood down. Opposition parties have made political hay 
from this legacy. Clark's claim that she might have fired Parker if 
he hadn't resigned could be an attempt to deflect the opposition's 
claims that Labour's leadership is indifferent to its MPs breaching 
conventional standards, and even in some cases the law. 
 
The legal and political ramifications 
------------------------------------- 
 
¶9. (SBU) If Parker is found guilty and sentenced to the full weight 
of the law, he would be in breach of the Electoral Act and forced 
 
WELLINGTON 00000220  002 OF 002 
 
 
resign from Parliament. A saving grace for Parker is that according 
to a Companies Office official "prosecutions (are) relatively rare, 
with prosecution for filing matters rarer still." 
 
¶10. (SBU) If Parker leaves parliament, the existing finely balanced 
distribution of seats within parliament will not be disturbed. 
Parker is a list MP, and his departure will simply mean that he will 
replaced by the next candidate on the Labour party list, thereby 
restoring the status quo.