KEY POINTS:
Prime Minister Helen Clark says she knew about Labour Party president Mike Williams' efforts to link John Key with the H-fee scam of 1988 but distanced herself from them, saying it was a private mission paid for by him.
Mr Key, a former merchant banker and the National Party leader, has accused Labour of running a smear campaign ahead of next week's election and firmly pointed the finger of blame at Helen Clark.
"Of course the Prime Minister was involved," Mr Key said, but he was reluctant to say it marked a turning point in the campaign.
"The campaign and the election will be fought and lost and won on the issues that actually matter."
Mr Key said he was "very proud and happy" about the financial experience he could bring to the job of PM.
Mr Williams spent several days in Melbourne last week going through court documents and initially believed he had something that would blow the election campaign apart.
It was a signature on an H-fee cheque that looked like Mr Key's signature - although it turned out to be that of an executive of Elders IXL, parent company of a firm the MP once worked for.
Herald journalist Eugene Bingham travelled to Australia this week to inspect the documents as well.
Helen Clark said she made no judgment on the issue but noted the Herald's interest and coverage on the matter.
She said the taxpayer-funded Labour Party parliamentary research unit had assisted with the investigation, but not travelled to Melbourne.
Asked if Mr Key misled the public, Helen Clark said: "I've made no judgment on it one way or the other."
Helen Clark said she had "absolutely not" looked at the documents involved.
"The whole business which occurred 20 years ago is incredibly complex and I would not pretend for one moment that I had my mind around any of it and nor do I intend to devote time to it. I am very focused on leading New Zealand through tough economic times."
There is no evidence to link Mr Key with the fraudulent H-fee transactions that resulted in Equiticorp head Allan Hawkins and Elders executive Ken Jarrett going to prison, but he worked closely with someone who was involved in the second of two transactions.
The first was done at Australian-based Elders IXL in January 1988.
But the second one was done with the help of Mr Key's old firm Elders Merchant Finance in Wellington on September 7, 1988, one week after Mr Key left to join Bankers Trust in Auckland.
Mr Key's replacement at Elders, Paul Richards, helped with the transactions but was given immunity from prosecution.
Mr Key acknowledges that he was at a lunch with Mr Richards on August 31, the day he left the firm, when Mr Richards said he had to leave for a time to go and meet Mr Jarrett - but he did not say what about.
But Mr Key said yesterday that Mr Richards had never sought his advice on the transactions and that he had had no involvement or knowledge of them whatsoever.
Mr Key subsequently gave Mr Richards a job at Bankers Trust in Auckland and he now lives in the United States.
Mr Key was backed up by Charles Sturt, the former head of the Serious Fraud Office, who interviewed Mr Key about the transactions, and said Mr Key was never involved.
"John Key was simply one of scores of innocent people interviewed by the SFO in this investigation."
There was "not a scintilla of evidence" linking him to anything untoward, Mr Sturt said.
- NZPA
