Clark heard Tamihere rumours months ago

By AUDREY YOUNG

Prime Minister Helen Clark spoke to John Tamihere several months ago about rumours of a tax problem at Waipareira Trust, she revealed yesterday.

But her minister did not tell her at the time he had received a $195,000 severance payment from the trust - on which tax has not been paid - an issue now forming part of an inquiry by a Wellington lawyer.

She said she found that out just before TV3 ran the story about the payment, while she was in India two weeks ago.

"I advised him that there were rumours around but I had the same response I've always had, which is that he believes there's nothing in his past which would cause embarrassment to him, his family or the Labour Party.

"As far as he was concerned, there weren't any tax issues which would cause him embarrassment."

Helen Clark could not recall the detail of the rumours but they had been "broadly oozing out of the Waipareira Trust, as they've oozed for many years now".

Nor could she recall exactly when she met Mr Tamihere, but she indicated that hearing rumours about colleagues was common.

"I can assure you as Prime Minister there probably isn't a week or two go by when someone doesn't ring with some bit of scuttlebutt about someone somewhere."

Mr Tamihere was chief executive at the trust until 1999 when he campaigned, along with Helen Clark, against golden handshakes.

He has now stood down from the Cabinet until the inquiry is completed and will not be at Parliament this week.

The Waipareira Trust has also sent a privately commissioned forensic report to the Serious Fraud Office which raises serious concerns about payments to apparently bogus companies totalling $100,000 approved by the trust's chief financial officer at the time, Mike Tolich, and Mr Tamihere, who has disclaimed any knowledge of them.

Helen Clark made it clear yesterday she will not wait for any action or conclusion by the SFO, which was not known for moving fast.

Her judgments about Mr Tamihere would be made after the report by Douglas White, QC.

ACT Party leader Rodney Hide claimed the Prime Minister had known for a long time things were amiss at the trust and was setting up Mr Tamihere "for a dismissal that makes her look totally clean".

In a statement, Mr Hide said Helen Clark had to take some responsibility for failing to act when she first knew of problems at the trust.

"She chose simply to accept her minister's assurances that there were no problems."

Caucus sources suggested that if Mr Tamihere stood down until the next election, there would be time for him to be cleared by the Serious Fraud Office and to go back into Cabinet if Labour led the next Government.

It would also give him more time to campaign hard in his Tamaki Makaurau seat, which is expected to be under threat by the Maori Party candidate, co-leader Pita Sharples.