NEW ZEALAND SPY "SCANDAL" - SECURITY INTELLIGENCE

S E C R E T SECTION 01 OF 02 WELLINGTON 000997

SIPDIS

DEPT FOR EAP/ANP, INR/EAP
NSC FOR GREEN, JONES

E.O. 12958: DECL: 11/30/2014
TAGS: PGOV PREL PHUM NZ
SUBJECT: NEW ZEALAND SPY "SCANDAL" - SECURITY INTELLIGENCE
SERVICE UNDER INVESTIGATION

Classified By: DEPUTY CHIEF OF MISSION DAVID R. BURNETT,
FOR REASONS 1.4(B,D)


1. (S) Summary: Prime Minister Helen Clark has assented to a
request by the Inspector-General of Security to conduct an
investigation into allegations reported by the New Zealand
media that New Zealand's Security Intelligence Service (SIS)
has been spying on members of the newly formed Maori Party.
The reports were attributed to anonymous whistleblowers in
the New Zealand Security Intelligence Service, at least one
of whom has since been identified as unaffiliated with the
SIS. The alleged spying ("Operation Leaf") supposedly
gathered political intelligence on Maori through wiretaps and
computer hacking. Embassy Wellington RMAS dismisses the
allegations; SIS contacts insist such domestic monitoring was
discontinued a decade ago. Some monitoring of Maori criminal
groups may continue, but is conducted exclusively by the
police service. PM Clark has vehemently denied the
allegations and thus far avoided political fallout, but has
allowed an investigation by an independent supervisory body
to proceed. End summary.

Legitimacy Of Media Sources Questioned
--------------


2. (U) Since November 21, New Zealand media have been
reporting allegations that New Zealand's Security
Intelligence Service (SIS) has been spying on members of the
newly formed Maori Party. Three dissident "SIS operatives"
have claimed to local media that they had been assigned to
monitor domestic Maori groups in New Zealand in order to get
intelligence on tribal divisions, finances, and treaty claims
and in general to get "dirt" on those targeted. The PM
called these claims a "work of fiction" and challenged the
three spies to make their complaints through proper channels
if they were to be considered credible. One of the "spies"
has been identified - New Zealand citizen Jack Sanders (aka
James Thomas Stubbs). Sanders has been described by a NZ
Police spokesman as a subject of interest by the Police for
"dubious activities" in Asia.


3. (U) While PM Clark, who is also Minister for the SIS, has
vehemently denied the allegations, she has assented to a
request by the Inspector-General of Security, Justice Paul
Neazor, to conduct an investigation. This assent may be
linked to a letter of complaint from political rival and
Maori Party co-founder Tariana Turia to Neazor. Turia told
the press that her phone was bugged while she was leaving the
Labour Party, although she also admitted that a private
security firm she hired at that time told her it was unlikely
SIS was involved. Turia also spoke with SIS head Richard
Woods and stated that she has accepted his assurances her
Maori Party was not a target.


4. (S) Post's RMAS spoke with SIS contacts, who stated that
the press claims are not credible. They further stated that
the SIS had monitored Maori groups in the past when they were
considered a possible national security risk, but stopped
doing so at least 10 years ago. In fact, when the RMAS asked
SIS last year if they were looking at Maori groups in the
wake of press reports that some Maori were embracing radical
Islam, SIS said no, as they thought the police were doing an
adequate monitoring job.

SIS Background
--------------


5. (S) The SIS is one of four key elements in the GoNZ's
security structure, which also includes the Government
Communications Security Bureau (GCSB),the NZ Police and the
NZ Defence Force's special forces. These organs are
coordinated by the Domestic and External Security Committee,
based in the Department of PM and Cabinet. The SIS is akin
to both our FBI and CIA and spends about 90 percent of its
resources on domestic security issues. (It was authorized to
conduct overseas operations in 1996.) Its focus is on
internal issues involving counter-terrorism (CT),
counter-proliferation, counterespionage and organized crime,
and it is just completing a restructuring plan in preparation
for requesting more CT funding. Neazor's investigation will
be the first into NZ's counter-intelligence services since
the 1996 reforms.

Comment
--------------


6. (C) The initial newspaper article, written by strong
anti-Western columnist Nicky Hager, exploited public
stereotypes with its allegations of a security apparatus
running roughshod over civil liberties and with its overtones
of racial profiling ) targeting law-abiding Maori. However,
Clark's decision to allow an inquiry should effectively stem
any political fallout for her Labour Government, especially
as further press reporting continues to undercut the media's
initial claims.
Swindells