Hushed House Hears Charge Of Trafficking

Press, Volume CIII, Issue 30610, 28 November 1964, Page 1

Hushed House Hears Charge Of Trafficking

(From Out Parliamentary Reporter)

WELLINGTON, November 27.

The Prime Minister (Mr Holyoake) adjourned proceedings in Parliament at five minutes past seven tonight after Dr. A. M. Finlay (Opp., Waitakere) had alleged that Mr J. S. Meadowcroft, president of the National Party, had been involved in a business deal which could have involved trafficking in import licences.

Silence fell on the House as Dr. Finlay made his charge. Then the Minister of Customs (Mr Shelton) disclosed that no import licences had been granted. White with anger, both Mr Holyoake and Mr Shelton lashed back at Dr. Finlay.

“The member for Waitakere has here tonight deliberately set out to besmirch the name of a prominent citizen and the name of the National Party in the process,” declared Mr Holyoake.

“Every member of this House will feel that a bit of the mud and dirt has been rubbed off on him.

“The member has besmirched a prominent citizen and the president of the National Party. He has degraded his own profession and this House.”

Opposition voices: Oh, nonsense.

Dr. Finlay: Are you suggesting that I would not be willing to say all this outside the House? Do you approve of this business?

The Prime Minister: I do not know. I haven’t the faintest idea about it.

Opening his attack, Dr. Finlay said he wanted to discuss trafficking in import licences.

A case recorded in the New Zealand Law Reports disclosed that a Mr Meadowcroft, a Wellington farmer and businessman, had entered into a venture with another citizen as the British International Trading Company and Associates, Ltd., a firm which was to market pine logs in Japan.

“If he is the same Mr Meadowcroft, who is president of the National Party, he is not the man to enter into any venture, political or otherwise, without some expectation of reward,” said Dr. Finlay.

“He was to have received £lOOO from the first shipment of logs and 4 per cent of subsequent sales. “In the result, the venture turned out to be ill-fated. Mr Meadowcroft lost £BOOO.

“He claimed a tax deduction to cover this loss. The Commissioner of Inland Revenue would not allow it and he appealed. “The appeal failed and he has been left lamenting, but that is another story.” Cash payments were not the only inducements which led him into the transaction, said Dr. Finlay. ‘•Made a Deal'’ Apart from the consideration, he was naturally attracted by the prospect of ultimate advantage to himself. At that time import licences were granted to the value of 50 per cent of new items exported to Japan. Mr Meadowcroft had made a deal with the other man that he would collect such licences and this proportion of the transaction had not been reduced to writing. “That seems to me,” said Dr. Finlay, “to be a blatant case of trafficking in import licences. If there was not a direct breach of the law, then there was an association with a breach of the law." Tax Appeal After the company had begun to get into difficulties, and losses began to mount, Mr Meadowcroft had tried to make a deal with another person, but that person was not entitled to the allotment of import licences, said Dr. Finlay. “It will appear to those members of the Government who are still alert that this transaction took place in 1959 at the time a Labour Govern-1 ment was in power. 1

“But this is no answer. The whole transaction was concealed until 1963 when Mr Meadowcroft himself chose to let the cat out of the bag by seeking tax relief. It was all locked up in his own head—and in his head alone.

“We are asking what are you going to do about it?” Dr. Finlay demanded of the stunned Government benches. “We ask the Minister to apply the stern measures of which he has spoken to Mr Meadowcroft, whoever he may be, and whatever position he may occupy in this country and in any political party.” Mr R. L. Bailey (Opp., Heretaunga): Let justice be done. ( Mr Shelton replied that there was “not one tittle” of evidence to show that there had been trafficking in lienees.

“Certain companies did open trade with Japan in radiata logs, and licences were granted to them for that trade with Japan, I think to the extent of 50 per cent,” said Mr Shelton. “But if no licences were granted to this company, then how in Heaven’s name can there have been any trafficking?” Dr. Finlay: There was a desire to traffick. . . . “I think this is one of the most tawdry challenges ever issued in this House,” re-

joined Mr Shelton. “A man’s name has been brought into this House in a very disrespectful manner with the suggestion that he has done a dishonourable thing. . . .” Dr. Finlay: I say he has. Mr Shelton: If this is professional conduct, I am amazed and dismayed. Mr Shelton said he had already asked the Tariff and

Development Board to examine two cases of suspected trafficking in import licences recently, and to report on what should be the criteria for judging trafficking. “As the Minister of Customs, 1 am concerned if there is genuine trafficking in licences.” Helped Young Man “1 regret very much that this has been raised,” said Mr Holyoake. “I know Mr Meadowcroft, but I do not know all his business. I do know that on a number of he has put money into businesses to help young men—and has lost money.” Dr. Finlay: He didn’t go into this one expecting to lose money.

Mr Holyoake: I shall inquire further into this. The Leader of the Opposition (Mr Nordmeyer) said no-one should be pilloried merely because he happened to be an officer—and a prominent officer—in a political party. “Equally,” added Mr Nordmeyer, “no-one should be white-washed.” Government members clameured that the debate, a second reading of the Appropriation Bill, should be confined to discussion of matters of Government administration.

Mr Nordmeyer said the House was discussing “the administration of the National Party’s president.” Mr Holyoake: This question has no relevance whatsoever to matters before the House. I know of no matter under the administration of the Government in this question. Speaker’s Ruling The Speaker (Sir Ronald Algie) ruled, however, that the topic was valid. Mr Nordmeyer said under the scheme for awarding import licences for exports to Japan, the licences were supposed to be given to the person responsible for the export. “Admittedly no licence was actually issued. But is it possible for a person who finances someone else or who backs someone else to get a licence?” Mr Shelton: I would not think so. Mr Holyoake again sprang to his feet. “The Leader of the Opposition says we should make inquiries. I suggest that we do that outside the House.” Adjournment Mr Holyoake then moved that the House adjourn, in spite of the fact that it was sitting late, under urgency, for the express purpose of giving a second reading to the Appropriation Bill. The House then rose until 2.30 p.m. on Tuesday. After the House adjourned, senior Cabinet members gathered round the Prime Minister and held a discussion in hushed tones. Dr. Finlay spoke to Mr Nordmeyer and then left the Chamber.