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DE RUEHWL #0923/01 3271732
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O 231732Z NOV 06
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3519
INFO RUEHBY/AMEMBASSY CANBERRA IMMEDIATE 4617
RHEHAAA/NATIONAL SECURITY COUNCIL WASHDC IMMEDIATE
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C O N F I D E N T I A L WELLINGTON 000923 
 
SIPDIS 
 
SIPDIS 
NOFORN 
 
STATE FOR D (FRITZ), EAP/FO, EUR/RPM, AND EAP/ANP 
NSC FOR VICTOR CHA 
SECDEF FOR OSD/ISD JESSICA POWERS 
PACOM FOR J01E/J2/J233/J5/SJFHQ 
 
E.O. 12958: DECL: 11/22/2016 
TAGS: PGOV PREL NZ
SUBJECT: IS NATIONAL'S LATEST CRISIS BRASH'S TIPPING POINT? 
 
 
Classified By: Political-Economic Counselor Katherine Hadda, 
for reasons 1.4 (b) and (d) 
 
¶1.  (C) Summary:  The author of a soon to be published book 
claims it will prove National Party leaders have mislead 
their own caucus and the public about the party's fundraising 
and other contacts with religious and corporate players 
during the 2005 campaign.  Nats leader Don Brash only days 
ago got a temporary injunction from publication of his 
personal e-mails which he claimed were hacked. Now that it 
appears the book relies on e-mails provided by disgruntled 
party insiders, Brash says it should be published.  Party 
officials and MPs are worried about the book but apparently 
even more so by Brash's response.  For the first time even 
caucus loyalists are hinting they have had enough of him, 
although they are not as keen to back National Finance 
spokesman John Key as the media suggests.  End Summary. 
 
--------------------------------------------- --- 
New Book Claims National Lied About its Campaign 
--------------------------------------------- --- 
 
¶2.  (SBU) The author of a new book about to the hit the 
shelves claims it will prove National Party leader Dr. Don 
Brash and his closest advisers repeatedly misled the public 
about their 2005 election campaign. Author Nicky Hager that 
"The Hollow Men" will reveal that Brash worked more closely 
than he has admitted with the Exclusive Brethren, the 
secretive sect which ran an initially covert campaign against 
 
SIPDIS 
Labour at the last election. It will also show that despite 
his denials leadership contender John Key knew about the 
Brethren's campaign. Hager says the book also reveals 
breaches of election financing laws that National allegedly 
kept secret while accusing other parties of the same 
misdeeds. Hagar says his research has uncovered National's 
"hidden links" with influential industry lobby groups, and 
says the party also had more contact with American backers 
than it has admitted.  Hagar is a known author who leans left 
but has also written an expose of Labour's attempts to cover 
up the accidental release of genetically-modified corn.  New 
Zealand readers consider him credible. 
 
--------------------------------------------- -- 
Brash's Response May Damage His Caucus Standing 
--------------------------------------------- -- 
 
¶3.  (C) Brash's handling of the book has once called into 
question his political judgment and his ability to handle a 
political crisis.  Following Foreign Minister Peters' earlier 
release of Brash's personal e-mails Brash last week got an 
interim injunction preventing the publication of e-mails he 
said were stolen from his personal computer. Although Brash 
claims the court order was not aimed at Hager, it did prevent 
publication because the book is partially sourced from 
e-mails  Now that Hager has claimed the e-mails were provided 
by disgruntled National Party insiders and not stolen, Brash 
has reversed himself, saying he now wants the book published 
so its can be "exposed to daylight" whilst protecting the 
privacy of his contacts. 
 
--------------------------------------------- --- 
Latest Brash Stumble Could Be His Last as Leader 
--------------------------------------------- --- 
 
¶4.  (C) Brash's reversal only drew more attention to a book 
that could cause National considerable long-term pain and 
internal disruption.  A stoic Brash supporter within caucus 
who only two days ago told us "it would not be a good look 
for National to again change leaders" has now started to 
change his tune, questioning Brash's political talent. 
Another National MP tells us Brash appears increasing out of 
touch with the average New Zealander and freshman members of 
caucus will not automatically line up behind him, contrary to 
what outside observers are led to believe. Although the MP 
does not think that this particular setback will lead to 
Brash's ouster, he expects a challenge will arise in early 
¶2007. 
 
--------------------------------------------- -------------- 
Leadership Contender Key's Star Rises, But Maybe Not Enough 
--------------------------------------------- -------------- 
 
¶5.  (U) As this controversy unfolds, a new Herald DigiPoll 
survey shows that 17.3% of Aucklanders favor John Key as 
Prime Minister, only 1.5% behind the 18.8% who favor Brash. 
This is the first time Key has been within striking distance 
of usurping Brash in Preferred Prime Minister polling. 
 
¶6.  (C) Yet although the drumbeat for Key to replace Brash is 
growing louder by the day, especially among the country's 
media, there is less evidence that the National Party caucus 
backs him in sufficient numbers to mount a coup.  One member 
has explained to us that some in the caucus are wary of Key's 
lack of political experience and uncertain over where he 
stands on many issues.  Needless to say, damaging information 
in Hagar's book about Key could harm his standing with caucus 
and public alike. 
 
------------------------------- 
America Is Not The Book's Focus 
------------------------------- 
 
¶7.  (C) Murray McCully, National's Foreign and Defence 
Spokesman and a member of Brash's inner circle, told us that 
the party leadership is "working its way through things 
quietly." He said he hopes they'll get past the matter within 
a few days but his tone suggested he suspects this won't be 
possible.  McCully said that he has been told by people who 
have read the book that it concentrates very little on 
American involvement in the 2005 campaign, focusing instead 
on the Exclusive Breathren and other campaign finance issues. 
 McCully speculates the book may mention e-mails between 
Brash and a former Republican official who is a part time 
resident of New Zealand. McCully promised to let us know if 
he learns of any other American-related allegations in the 
book. 
 
¶8.  (C) McCully admitted that National has seen "too much 
untidiness" over the last months, and confided that some of 
the blame rests with the party's leader.  It was Brash alone 
who had decided to seek a gag order on any release of his 
e-mails, said McCully, despite McCully's advice against this. 
 When asked if the book and Brash's u-turn might be a step 
too far for the National caucus, McCully first tried to laugh 
off any problem, noting that the caucus "will find this 
uneasy but this is nothing new."  But he then asked 
rhetorically, "Who knows how tolerant they will stay?" 
 
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Comment 
------- 
 
¶9.  (C) We have been struck by the near despair with which 
our contacts are describing this latest snafu.  McCully has 
been implicated in past leadership coups, and his remarks 
about not knowing the extent of caucus support, if true, are 
striking indications that the inner circle may not be able to 
continue to rally the troops as they have in the past. 
National's freshmen MPs have been lauded for their talent, 
but the downside of that for the party is that many have "day 
jobs" to return to if the party fails to stage a victory next 
election.  This can only increase pressure on Brash and the 
rest of the leadership, although the lack of a clearly-backed 
successor may provide a respite. 
McCormick