The former Revenue Minister can't recall when exactly he knew the Prime Minister's lawyer lobbied him against foreign trust changes, but says he treated the situation the same irrespective of who he was.
Todd McClay was questioned today about when and how he knew Ken Whitney was John Key's long-time lawyer and says the link was "absolutely clear" following media reports in the past few weeks.
Questions have been asked of the Prime Minister and Mr McClay for the first time since the email by Mr Whitney, a trust specialist and partner in The Antipodes Trust Group, was released under the Official Information Act.
The company deals in foreign trusts. In late 2014, Mr Whitney wrote to then Revenue Minister Todd McClay citing a conversation he'd had with Mr Key about potential changes to the system.
Mr Key also mentioned to Mr McClay in passing that he'd been approached by Mr Whitney about foreign trusts.
The email from Mr Whitney, in part, read: "I have spoken to the Prime Minister about this and he advised that the Government has no plans to change the status of the foreign trust regime".
A meeting was set up between Mr Whitney and a group of other lobbyists, Mr McLay and his officials.
Inland Revenue later said there would be no review of foreign trust rules, citing "wider Government priorities".
Today, Mr McClay said he "didn't fully remember" whether Mr Key had mentioned his relationship to Mr Whitney.
But the Prime Minister is sure he used the words "my lawyer" during the conversation which happened almost two years ago.
"All I can tell you is I told him. It was two years ago, it was an oral conversation, but I definitely told him," Mr Key said.
Mr McClay said the link between the two was "absolutely clear" following media reports in the past few weeks. He didn't believe he knew at the time of the first email.
"[The Prime Minister] raised with me a lawyer had been involved. I then received an email, it wasn't clear to me that this was anybody other than a lawyer who represents the industry," Mr McClay says.
"Had I known or otherwise I would have treated it the same. I didn't feel any pressure to meet with him, nor any pressure to make any decision based on who the industry represents."
Mr Key says a "sloppily written" email from Mr Whitney overstated his own involvement in the matter.
People raise issues with him all the time, he says.
"If I go to the Koru Lounge for instance, I don't sit off in the corner, I stand out in the middle. People come up to me from all walks of life every single day.
"In reality, people do raise issues with me and I deal with them in the most professional way I can, which is pass them off to the minister."
He has since spoken to Mr Whitney following the release of the documents.
"He is absolutely confident [that] my version of events is correct, and that's what he attempted to write in the email. It may be the email was sloppily written if that was the case, but that was absolutely right.
"People write things in a way which is sometimes shorthand."
Mr Key says he was not aware at the time of potential changes.
The Government dropped its review of foreign trust tax rules because, while there might have been some merit in it, it had to work with other countries and there were other priorities for IRD.
"There was no revenue for IRD on the back of this."
Opposition parties have attacked the Prime Minister on the issue, saying it is proof the rich and powerful can "get the ear of government".
Labour leader Andrew Little says the issue still needs closer scrutiny, saying the circumstances appear "disturbing and looks like undue influence".
He rubbished the claim the email could have been written poorly.
"This guy is a trained lawyer -- he knows about language."
Foreign Trust OIA by NewshubNZ
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