NBR in stand off with SFO over file seizure

UPDATED 11.15am: The National Business Review is in a standoff with the Serious Fraud Office after the SFO this morning refused an invitation by NBR publisher Barry Colman to attend a meeting with the paper.

The SFO instead warned that NBR had been in breach of its statutory obligations under the Serious Fraud Office Act since 9 am today.

The SFO has demanded editorial files relating to NBR’s investigation into the collapse of the South Canterbury Finance group of companies and yesterday threatened its journalists with jail and fines for non-coperation.

The NBR called for the meeting to seek reassurances that its co-operation with the SFO would not lead to further fishing trips for information that could compromise the paper’s confidential sources.

The SFO’s request related to already published material that the paper has no objection to supplying as no confidential sources were violated.

But NBR is seeking an assurance from the Serious Fraud Office that it will not invoke its draconian powers of document seizure in return for NBR's co-operation into the SFO's investigations in the South Canterbury Finance collapse.

Mr Colman said today the initial information sought by the SFO had already been published and its release would not violate the confidentiality of any NBR sources.

But the paper was concerned that there could be further demands for information.

The Serious Fraud Office Act 1990 gives the SFO powers to execute search warrants on media offices and to charge journalists who attempt to “obstruct investigations” with imprisonment for 12 months or a fine of up to $15,000; with publishers facing a $40,000 fine.

Mr Colman said today the SFO’s blatant intimidation was appalling and counterproductive.

“We are not the enemies of the SFO. We want the bad guys investigated as well,” he said.

“However, no news service is going to be able to get crucial information from its sources or whistleblowers if they face public exposure. We have taken legal advice and been told the act is so draconian that it is impossible for us to refuse to co-operate without risking serious penalty.

“We have decided to hand over the material they are asking for today because it doesn’t compromise any of the sources of Matt Nippert, the reporter who carried out the investigation.

“If there is a further demand, then we face a real problem. We’ll deal with that situation if and when it arises. We are hopeful the SFO will give us the assurance we are seeking on this matter.”

Mr Colman said the SFO had apparently realised the extent of its public relations blunder in its threatening approach and was now attempting to play down the situation.

“This has become a problem of their own making. They were the ones threatening to lock up any journalist failing to co-operate,” he said.

Mr Colman was aiming to set up a meeting with the Serious Fraud Office .

The Serious Fraud Office served the notice on NBR yesterday, demanding documents and audio tapes relating to the paper’s investigation of South Canterbury Finance's dealings over Auckland's Hyatt Regency Hotel. The deadline for delivery was 9am today.

The Serious Fraud Act Section 5 notice requires NBR editor-in-chief Nevil Gibson to hand over all written and audio notes relating to Mr Nippert’s investigation of the Hyatt Regency, specifically the NBR exclusive story of how one-time meatworker Peter Symes came to own the hotel.

NBR did not hand over any files when an SFO representative visited its office at 4.30pm yesterday, pending legal advice.

"We are pleased that the authorities are taking action following up our investigative report but we are seeking independent legal advice before deciding what action we will take," Mr Colman said yesterday.

"Our primary concern is to ensure we can protect any confidential sources involved in our investigations. We need to know the ramifications of complying with any forced hand over of our files, notes and recordings."

The story was published on the front page of NBR two weeks ago. The full report is also available on the paper’s website.

Mr Colman said it was the first time in NBR's 40 year history that journalists' files had been demanded by police or other state investigators.

NBR has a history of defending the public interest, including its famous winebox investigation through to its recent decision to defy a Commerce Commission order and publish details of a secret side-deal between Vodafone and 2degrees.

The notice served on NBR (click each page for a larger view. And, yes, the SFO did spell Nevil Gibson's name incorrectly):

Click page for larger view: