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Act's hard line law and order spokesman MP David Garrett has told Parliament he created a false identity by applying for a passport in the name of a dead child 26 years ago.
Mr Garrett's revelation follows his confirmation earlier this week that he was convicted of assault in 2002 in Tonga.
In a statement to the House this afternoon, the MP said he had used the method outlined in Frederick Forsyth's novel The Day of the Jackal to apply for the dead child's passport.
Mr Garrett said he had applied for the passport as a prank - to see if it could be done - and had never used the passport, which had since expired.
Mr Garrett was arrested years later as part of an investigation into bogus passports, conducted by the police in the wake of the discovery Israeli Mossad agents had used the same method to obtain New Zealand passports.
He was discharged without conviction in 2005 and given permanent name suppression.
He said the suppression was the reason he had not commented to media on the issue when it was raised earlier today.
The MP said he had expressed remorse to the parents of the child and written to apologise to them. Today he said he would carry the remorse with him for the rest of his life.
Hide: Garrett shouldn't stand down
Act leader Rodney Hide confirmed Mr Garrett had disclosed the matter to him at the time he was asked to stand for the party at the 2008 election.
"He was so concerned that he thought it ruled him out and I persuaded him to stand notwithstanding that."
Asked why the matter had not been disclosed earlier Mr Hide said it was "always difficult because you don't know how much whether every person who stands for office should stand up and tell of everything bad that they've done in their life or acts that they regret".
"I regarded it as in the past and that he had been processed by the authorities, it wasn't something that was outstanding.
"What I said to David was you'll be judged by how you perform as a candidate and as a Member of Parliament and in that respect he's been outstanding."
Mr Hide did not believe Mr Garrett should stand down as an MP because of the incident.
McVicar: Should have told public earlier
Garth McVicar of the Sensible Sentencing Trust introduced Mr Garrett to Mr Hide as a potential Act candidate.
The two men met in 2002 when Mr Garrett began working with the trust.
Mr McVicar said Mr Garrett had told him of the passport incident in 2004 or 2005.
The matter was brought up again when Mr Hide met with Mr McVicar and Mr Garrett after Mr Hide had approached Mr McVicar about standing for Act.
That was before any discussions about which spot on the party list Mr Garrett would take.
When it became clear Mr Hide was interested in Mr Garrett as a candidate, Mr Garrett informed him of the assault conviction in Tonga and the passport charges, Mr McVicar said.
However, Mr McVicar said Mr Garrett should have disclosed both incidents to the public much sooner.
"At some stage it's going to come out you may as well be open and honest."
Mr McVicar said the ideal opportunity for Mr Garrett to have disclosed the incidents was his opening address to Parliament following the 2008 election.
"That would have killed it right there and then rather than all this carry on now trying to justify it. He can't justify it."
Mr Garrett had "a big battle ahead of him" to regain credibility as Act's law and order spokesman, he said.
Nevertheless, he believed Mr Garrett deserved a second chance.