The Telecom leak: Swapping secrets in the suburbs

The handover of a document which was to cause a furore throughout the business sector happened in a quiet Wellington suburb.

There was little cloak or dagger about the way parliamentary messenger Michael Ryan passed a confidential Cabinet paper to his long-time friend Peter Garty.

The two had been at a mutual friend's home for a meeting of the Onslow Tar Babies mountain biking club when Mr Ryan handed Mr Garty a manila folder and told him to read the paper inside and return it to him the next day.

It wouldn't have been hard for Mr Garty to drop the folder back to Mr Ryan - the two men live just around the corner from each other in affluent Khandallah.

They have known each other for many years, and formed a friendship through mutual interests in cycling and rugby.

Both men had worked in the public service. After leaving accounting firm Ernst & Young in 1995 Mr Garty had reached the upper echelons of Housing New Zealand.

He was the organisation's acting chief executive when he left to join Telecom in 1997. He is now the firm's group financial controller.

Mr Ryan grew up in Papatoetoe, attending the Holy Cross School, De La Salle College and Papatoetoe High School. Listed as aged 53 on the "old friends" website, he held a variety of public service positions from 1970 until the late 1990s. He was then self-employed for several years before heading back to the service last October and a job as a messenger in the Department of the Prime Minister and Cabinet.

The men's children had been to the same school, and Mr Garty and Mr Ryan were closely involved with the Tar Babies - on the night of the leak the club, which has raised thousands of dollars for charity, had been discussing another fundraising effort.

The wine had flowed that night - the Tar Babies are a social club and routinely meet at Khandallah's local, the Postie's Whistle, for a post-ride drink on Saturday afternoons.

When Mr Garty got home he couldn't focus on the document and - against Mr Ryan's instructions - photocopied it so he could look at it fresh in the morning.

Realising what he had in his possession, Mr Garty handed the document to his bosses and set in motion a chain of events which has sent a long-time relationship skidding off track.