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The PM The Tycoon The DirtY Money & The Tax Haven Just what was Helen Clark thinking?

What have the British Virgin Islands, one of the world’s largest money-laundering scandals, alleged fr aud involving a Kiwi shipping tycoon and New Zealand Prime Minister Helen Clark got in common? IAN WISHART has a TROPICAL tale of greed, corruption and big donations to the Labour Party




magine the irony. You’re a self-titled “popular and competent” Prime Minister, “a victim of my own success”. You have a reputation as a control freak, for attention to the kind of details that would sink lesser mortals than yourself. You know what your enemies are thinking before they even do, and you have a well-oiled publicity and protection team whose 24/7 job it is to keep your nose clear of even the slightest whiff of scandal. So imagine your surprise when you read in a national magazine that the Labour Party’s largest campaign donations at the last election came from a man whose company is the exclusive freight handling agent in Australasia for one of the world’s largest tobacco companies. It’s an embarrassing revelation for Prime Minister Helen Clark, who pioneered New Zealand’s smokefree legislation and

who – ironically – personally arranged for the businessman to become a financial friend of Labour. Even so, it’s not the only embarrassment surrounding ex-pat billionaire Owen Glenn’s crucial $500,000 donations to Labour’s touch and go reelection campaign last year. Investigate has also discovered the shipping magnate and his company were forced to pay around NZ$1.5 million to the US Government in a 1999 out-of-court settlement to avoid prosecution for fraud. But wait, as the TV commercial hucksters might say, there’s more! Investigate has also discovered a director of Glenn’s New Zealand company Vanguard Logistics is embroiled in a massive $20 million banking collapse and fraud investigation involving a separate company in the Caribbean – potentially staring down the barrel of a prosecution. Adding extra salt to the story, one of the director’s alleged associates teamed up with a murderer and an armed robber in a separate banking scandal to stage what the US Department of Justice is calling “the largest non-drugrelated money-laundering operation ever brought to justice”. So again, did Labour do any background research on its single largest campaign donor, or did the party just take the money and hope? The story of Owen Glenn’s involvement in bringing Labour back to power is an interesting one. Born in India 66 years ago, his parents returned to England soon after, before emigrating to New Zealand when Glenn was six. According to a brief biography in the NZ Herald last year, he attended Auckland’s Mt Roskill Grammar before leaving at 15, in 1955, to join Tasman Empire Airways Ltd, or TEAL, the forerunner of Air New Zealand, as a cargo handler. He left the country in 1966 to seek his fortune, and hasn’t returned to live since. He is listed, variously, as a resident of Australia and the United States. But from relatively obscure beginnings, Owen Glenn shot to comparative fame in New Zealand early last year, when he donated what is believed to be one of the largest sums of money ever in this country to a philanthropic cause: $7.5 million to the University of Auckland School of Business. In return for this generosity, the University has agreed to name its new building, currently under construction, “The Owen G. Glenn Building”. Glenn has also donated $500,000 towards establishing a marine research chair at the marine centre at Leigh, north of Auckland, and he is a familiar face on his website making various charitable donations, whether to the restoration of Australia’s historic heritage fleet of sailing vessels, or simply funding a cheerleading team in California, where he lives. Glenn was photographed with Helen Clark at a ceremony at the University of Auckland marking the occasion of his big donation, but at that time – February last year – no one else knew that Glenn was also bankrolling the Labour Party to ensure Helen Clark returned to power. As the story goes, Clark had bumped into Glenn at a Tourism New Zealand promotional dinner in Sydney on July 8, 2004. “Seriously wealthy ex-pat Owen Glenn,” wrote the Herald’s Gareth Vaughan, “[who] is worth hundreds of millions of dollars and lives in Sydney – told Prime Minister Helen Clark he was willing to give money to Labour when the two met at a tourism dinner in Sydney. But when Clark got home…bugger, she could not remember his name.” Labour Party president Mike Williams was about to go trawling through a list of the guests invited by Tourism NZ to INVESTIGATEMAGAZINE.COM, February 2006, 27

Prime Minister Helen Clark shakes hands with Owen Glenn (wearing the cloak) at the University of Auckland in February last year. By this time, Glenn had paid $400,000 to Labour’s campaign accounts since first meeting Clark the previous July

Photo: OTS website

see if any of the names rang a bell with Clark, but Glenn saved them the trouble, emailing the Prime Minister directly. What followed were a series of massive payments, deposited into Labour’s bank account on the ninth of each month from November, 2004, through to March, 2005. One hundred thousand dollars a month, half a million dollars in total. The last time Labour is believed to have been given that much money by a single donor was back in the late 80’s, when merchant bankers, philanthropists and tax haven entrepreneurs Michael Fay and David Richwhite were ruling the political roost. When news of the latest donations broke in June last year, Owen Glenn told the Herald he was a big fan of Clark’s governing style, and felt she “stacked up well” on the international stage. “I particularly like her stance on seeking free-trade agreements with China and the United States,” he said. So who exactly is Owen Glenn, and why would an NZ free trade deal with China and the US prompt him to become Labour’s biggest benefactor? Well, Glenn is now a shipping magnate, and free trade deals mean much more freight and more business for his global empire. Especially as he’s managed to obtain a sought after “Class A” trading licence to do business in China. But although he’s described as a “shipping magnate”, it is a little more complex than that. You see, apart from owning a 112ft motor yacht, Ubiquitous, Glenn is a shipping tycoon who doesn’t own any ships. His empire is what is known in the industry as a “non-vessel operating common carrier” – essentially, he buys space on other people’s ships or aircraft to ship freight for his customers. He’s a middleman. Although the National Business Review Rich List estimates Glenn’s wealth at $1.1 billion, we’ve been unable to verify that and it may well be less. According to a report on SealinkUSA’s website last year, Glenn’s global empire is turning over only NZ$500 million a year. But that’s turnover, not profit. As you’ll see from the figures below, it’s hard to see where Glenn is making a profit. Investigate has managed to track at least ten companies ultimately controlled by Glenn and registered in New Zealand, 28, INVESTIGATEMAGAZINE.COM, February 2006

although four of them have been struck off, including two on New Year’s Eve just passed: Direct Container Line (NZ) Ltd, and AFS Freight Management NZ Limited. The last recorded directorship Owen Glenn held in New Zealand was 1993 when he resigned from the local board of Direct Container Line (NZ) Ltd, although a Michael Andrew Glenn was appointed the same day and continued until his own resignation in 2002. But if Owen Glenn is a billionaire, he must be making his money somewhere else. Documents filed with the Companies Office show DCL (NZ) Ltd incurred losses of: • $109,000 in the year to December 1998 • $394,000 in the year to December 1999 • $182,000 in the year to December 2000 The company ceased to trade at the end of 2000, but wasn’t struck off until December 31, 2005.


ut even that doesn’t tell the full story. According to documents filed with the Companies Office, one of Glenn’s subsidiaries, UAC New Zealand Limited, has declared operating revenue of $39.1 million dollars from 1999 through 2004, but only declared a taxable profit for the same period of $175,000, less than the price of a two bedroom hovel. Expressed another way, on an average annual operating revenue of $7.8 million dollars, Glenn’s company could only manage an average annual profit before tax of $35,000. Admittedly, things have been “sluggish” recently in the logistics business, according to global mega-carrier TNT, which says its profit margins on logistics last year were only 1.4%. Even so, 1.4% of UAC’s $39.1 million is closer to $550,000 than $175,000. But taking Owen Glenn’s global revenues as $500 million and applying a 1.4% profit margin, you’re left with a global profit for his companies of only NZ$7 million a year. Hardly lifestyles of the rich and famous. Returning to TNT Group as a comparison, TNT’s annual turnover is around NZ$21 billion, and the group’s net profit is around $1.3 billion (the group includes more profitable divisions

than just Logistics). Overall, TNT managed to make a 6.2% profit on its turnover. Assuming this as a best-case scenario for the much smaller Owen Glenn companies, that’s a global profit of only NZ$31 million a year. The records held by the Companies Office reveal other interesting facts about the structure of Owen Glenn’s global network, such as a holding company in the British Virgin Islands tax haven that provides a no-interest, no-repayment million dollar loan each year to his other major NZ operation, Vanguard Logistics Services (NZ) Ltd. In effect, this money from a tax haven props up the NZ operation. But as revealed earlier in this article, tax havens and their resident directors can be double-edged swords. In Vanguard NZ’s case, the company has two directors according to official records: Australian Tony Holt, and Bermuda resident Peter Maxwell Dickson. It is Dickson who’s at the centre of a major fraud scandal in the northern hemisphere. “A Caribbean offshore bank closely associated with the Bermuda-based Grosvenor Group has been accused of perpetrating a US$20 million fraud against two of its clients. The allegation against Horizon Bank International Limited (HBI), which is licensed in St. Vincent & the Grenadines, was made in a civil lawsuit filed at Ontario Superior Court of Justice, in Canada,” reported the international taxhaven journal Offshore Alert just over a year ago. As a result of that first court action, nearly $12 million in funds that Horizon Bank had deposited in a proper bank, Bermuda Commercial Bank (BCB), were frozen while investigators tried to get to the bottom of who actually owned and controlled Horizon Bank. The essence of the case is that a group of shady Canadians had either gone into business with Horizon Bank’s directors, including Peter Maxwell Dickson, or at least persuaded the tax haven bank to turn a blind eye to what investigators were calling “a Ponzi fraud”. Bolstering the prosecution’s case was Bermuda Commercial Bank’s senior vice president, who blew the whistle on who controlled the HBI deposit account at her branch, according to the Offshore Alert report: “In an affidavit dated August 17, 2004 Dominique Smith, BCB’s Senior Vice President, stated that the ownership of HBI, which was formed in Antigua on April 25, 1995 and continued to St. Vincent & the Grenadines on September 14, 1999, was in dispute.” Smith then highlighted some of the documents she was holding: “Attached to her affidavit were documents from BCB’s records, including: • A letter from Grosvenor Trust Company Limited, of 33 Church Street, Hamilton, Bermuda showing that HBI was owned by the Networth Investment Trust and by the Genesis Investment Trust, with each holding a 50 per cent stake. The letter was signed by Peter M. Dickson; and • A document that was part of the continuation from Antigua to St. Vincent & the Grenadines stating that the shareholders of HBI were Grosvenor Group Holdings Limited as the “legal shareholder” and Peter Dickson as the “beneficial shareholder”. Smith also attached “various correspondence and documents pertaining to the dispute/confusion as to the beneficial

The village of Roadtown, British Virgin Islands. Somewhere on this hill is the global HQ of a freight empire – for tax purposes, at any r ate

ownership of HBI” which were produced after the controversy flared up. From Bahamas-based HBI employee Kevin Coombes, there was: • The Minutes of an Extraordinary Shareholders Meeting held on December 12th , 2001 in Hamilton, Bermuda declaring that “Mr. Peter Dickson, the ultimate beneficial owner of Grosvenor Group Holdings Limited, the sole shareholder of Horizon Bank International Limited, was appointed Chairman of the meeting”. Dickson signed the minutes as Chairman, stated Smith; • A USA Patriot Act disclosure form completed by Coombes “in his capacity as Vice President of HBI” in which he declared that “he, Kevin Coombes, is the owner of HBI”; • Another declaration from Coombes dated July 27th, 2004 in which he specified the ownership of HBI was “legal shareholder is Grosvenor Group Holdings Limited, beneficial shareholder is Peter Dickson – pending approval from the IFSA [International Financial Services Authority of St. Vincent & the Grenadines] of change of ownership from Peter Dickson to Kevin Coombes and Brian Trowbridge”; • A letter from the IFSA to Peter Dickson to “confirm that their records show Peter Dickson as the beneficial owner of HBI and that the ownership will remain so until the authority INVESTIGATEMAGAZINE.COM, February 2006, 29

Glenn arr anged for Sir Howard Morrison to sing at his mother’s 90th birthday party, and posted a picture on his corpor ate website. In return, Glenn is donating money to Morrison’s charity work

has given its written approval of change in beneficial ownership”.” Initially Peter Dickson denied being the beneficial owner of the tax haven bank at the centre of a $20 million fraud, but midway through last year authorities felt sufficiently convinced that they revoked HBI’s banking licence by way of an official memorandum, cc’d to Peter Dickson. Offshore Alert, meanwhile, has been doing some corroborative digging of its own, discovering: “That HBI used to maintain a now-defunct web-site at http://www. which, as of October 5, 1999, identified its principal officers and directors as Peter Maxwell-Dickson, Director; Gordon Howard, Director; and William Cooper, Managing Resident Director. “Mr. Maxwell-Dickson has served at a number of firms including Deloitte, Haskins & Sells and KPMG Peat Markwick (sic),” stated the site. “From 1986 to 1990, he was the executive vice president of the Wraxall Group of companies, a large, diverse international trading and financial services company.” “Research by Offshore Alert showed that Peter Maxwell Dickson, a 54-year-old British national, is also a director of Vanguard Global Logistics Limited, formerly known as Direct Container Line Limited [Owen Glenn’s company], of Barking, Essex, which was incorporated in England and Wales on January 18, 1982.” But Owen Glenn’s right-hand man on the Vanguard NZ board appears to hang out with a bad crowd, according to the Offshore Alert report. The “William Cooper” referred to as HBI’s managing resident director is the same William Cooper sought by the US for the world’s largest non-drugrelated money laundering prosecution, a US$240 million dollar fraud committed in association with a convicted murderer and armed robber, using an Antigua tax haven bank he’d set up.. Because of Antigua’s tax haven secrecy laws, Cooper was not handed over to US authorities despite a four year legal battle by the feds. He remains in Antigua today, still operating 30, INVESTIGATEMAGAZINE.COM, February 2006

in the tax haven business. And Peter Dickson’s Horizon Bank International had been set up in Antigua, by Cooper in 1995. “Offshore Alert has previously reported that Cooper was criminally indicted for money laundering at the U. S. District Court for the Northern District of Florida on April 28, 1999 – less than five months before HBI moved from Antigua, where Cooper lives, to St. Vincent. An attempt by the U.S. authorities to extradite Cooper from Antigua failed. “Cooper has been implicated in numerous illegal activity involving offshore banks, including American International Bank, of Antigua, which closed its doors in December, 1997 when faced with a criminal investigation and insolvency. “HBI listed AIB as one of its correspondent banks on its website,” reports Offshore Alert.


ust before Christmas, the Bermuda Sun’s official gazette notices revealed that Dickson’s Grosvenor Group Holdings was due to be struck off the companies register in the tax haven a few weeks from now. Documents filed in Canada recently by Horizon Bank International’s statutory liquidator also reveal Peter Dickson could be in the gun for some of the $20 million lost in the Horizon Bank scandal, as well as facing potential legal action for breaching fiduciary duties. And remember, Peter Dickson remains listed on the NZ Companies Office website as the director of Owen Glenn’s NZ company, Vanguard Logistics. Investigate also understands Dickson may be the director of tax-haven based OTS Global Limited, which is believed to be the ultimate holding company for the OTS group worldwide, and is listed as the majority shareholder in OTS Logistics Group Ltd in New Zealand. We’re not suggesting that Glenn is aware of the scandal surrounding his appointee, but with the tax haven structure appearing to feature centrally in the OTS group, and with 177 offices in 105 countries, we believe Glenn does have a duty as chairman and CEO to be aware of matters like this, especially as they’re already in the public domain in the northern hemisphere. So if you’re beginning to think that the New Zealand Labour


Party’s biggest campaign donor associates with types from the financial fringes, take a look at our next revelation: Owen Glenn has himself faced court action by the US Government for alleged civil fraud, and had to pay around $1.5 million on behalf of his company in an out of court settlement. In 1999, investigators from the Federal Maritime Commission’s Bureau of Enforcement hauled Owen Glenn and his US-based shipping company Direct Container Line into court on three counts of violating the Shipping Act by fraud. “Respondent DCL is a tariffed and bonded non-vessel operating common carrier that furnishes transportation services worldwide,” notes a document on the Commission’s website, “including services from US ports and points to ports and points in the Far East and South America. Respondent Owen Glenn is the Chairman and Chief Executive Officer of DCL. “The Commission initiated two formal investigatory proceedings into the activities of these respondents.” The first investigation, commencing January 1999, “was begun to investigate allegedly unlawful activities by respondent DCL in the South American trade, specifically, allegations that DCL had misweighed and mismeasured cargoes in order to pay vessel-operating carriers less freight than what they were allegedly due, and also that DCL had not properly charged its own shippers the rates filed in its tariff. “Such conduct violates sections 10(a)(1) and 10(b)(1) of the Shipping Act of 1984.” This alone was bad enough for Owen Glenn. At stake were financial penalties, and the possible suspension of DCL’s tariff. But it got worse.


n April 29, 1999, the Bureau of Enforcement opened a second investigation, “to determine if DCL had been receiving rebates in its South American services under an arrangement set up by DCL’s principal, Mr Owen Glenn, which arrangement had allegedly been operating subsequent to October 1994.” This time, the Bureau of Enforcement were going for Glenn’s corporate jugular, saying they wanted “to determine if DCL’s tariff should be canceled or suspended, its license as an ocean transportation intermediary revoked” and whether financial penalties should be imposed. Was there hard evidence? According to the Bureau files, there was: “It would introduce evidence in support of the allegations [showing] that DCL misdeclared cargo weights and measurements on bills of lading so as to pay lower rates to two vessel-operating carriers and that its documentary evidence, such as DCL’s internal container manifest, would corroborate the fact that DCL routinely restated cargo measurements and weights for the same purpose. “Moreover, BoE states that it would introduce evidence showing that DCL’s “house” bills of lading issued to DCL’s shippers show that DCL used higher figures than those on the bills of lading tendered to the vessel-operating carriers, and that DCL concealed equipment substitution practices whereby DCL obtained larger containers than those for which it was charged.” The Bureau also elaborated on what was essentially three 32, INVESTIGATEMAGAZINE.COM, February 2006

years worth of secret kickback payments: “BoE asserts that it would establish that DCL entered into an arrangement with a vessel-operating carrier for the receipt of rebates and that an officer of another shipping company would testify that in 1996 it was agreed that DCL and the other company would share in the rebates from the vesseloperating carrier. “BoE asserts that it has documentary evidence to support the testimony. Moreover, BoE states that it would offer testimony of a second witness, a high-ranking sales and traffic manager of another vessel-operating carrier, such testimony showing that DCL and its officer, respondent Owen Glenn, established a rebate arrangement which covered hundreds of shipments during the period from 1994 through 1997. “This second witness, according to BoE, would testify that respondent Owen Glenn suggested the method by which the vessel-operating carrier would pay rebate amounts that had been agreed upon.” According to the BoE documents, DCL received nearly NZ$1 million in “rebates” between 1995 and 1997. A court judgement in the case records that, “After respondents recognized that BoE could submit a compelling case,” all parties agreed that it would be in their best interests to proceed to settlement negotiations, “which settlement would include possible violations by DCL with regard to a third vesseloperating carrier…and an agreement that BoE would support dismissal of Mr Owen Glenn as a respondent.” The final terms of the settlement approved by the court were simple: DCL had to pay NZ$1.5 million to the Federal Maritime Commission, in return for the case to be dropped and an agreement that the Commission would not re-open the investigation or widen it or pursue Owen Glenn. All of this may rise eyebrows among those on the receiving end of Glenn’s philanthropic largesse (recipients include not only the Labour Party, but the University of Auckland and the marine research centre at Leigh), but it is Vanguard Logistics’ boast that it is now the exclusive customs clearing and handling agent for British American Tobacco, responsible for importing and exporting hundreds of container-loads of cigarettes – especially to vulnerable communities like the Pacific Islands - that sits most uneasily for some. After all, the Prime Minister is no stranger to fraud herself, but the sight of New Zealand’s leading anti-smoking politician accepting money from those involved in shipping cigarettes is anathema to the group Action on Smoking and Health (ASH): “It’s frustrating!” complains ASH director Becky Freeman. “First we find out the government pension funds are invested with British American Tobacco, and now we find out this! It’s blood money, and they should have nothing to do with companies that associate with the tobacco industry. “I would hope now that it’s been pointed out that they will no longer accept donations from this particular source.” More likely, say cynics, is that Labour will keep taking the money, but just won’t identify the donor next time around. Documents and links relevant to the allegations made in this article have been posted on the Investigate website, www.

N W O D G N I N R U B E S U O H THE Last month, Investigate brought you the disturbing story of refrigerators that were, it seemed, spontaneously combusting, damaging property and terrifying owners in the process. Now, a new victim of this fridge-fire phenomenon, first documented by Investigate, has come forward. Damage estimates for this latest incident are thought to be about $12,000, but as JAMES MORROW and IAN WISHART reveal, this disaster’s toll was almost measured not in dollars, but in lives.

ore than a television, more than a washing machine, more even than a stove or oven, a refrigerator is probably the most important appliance a family can own this side of the Arctic Circle. It keeps the milk fresh, the beer chilled, and the veggies crisp. In short, unless one takes all one’s meals at restaurants or lives on a working farm compete with crops, orchards, a dairy, and an abattoir, a refrigerator is essentially an unglorified life-support system. Except, of course, when things go wrong. Then they can become deadly. In a previous edition of Investigate, we brought you the exclusive story of John Rogers, the New Zealand whitegoods technician and former authorized Fisher & Paykel service agent who blew the whistle on an alleged design flaw in some of the most popular refrigerators in Australia and N.Z. that was causing them to catch fire and quickly burn themselves down to little more than smoldering piles of molten plastic, metal, and broken glass. These “meltdowns”, as Rogers described them, were thought to be the result of the too-close placement of the evaporator and defrost elements to the internal plastic casing of the freezers, which were overheating – and in some cases, combusting. All in all, in just his small territory in West Auckland, Rogers says that he found between 15 and 20 fridge/freezers – always electronic models, as it happens – in varying stages of meltdown over just a three-month period of time. His findings were backed up by registered independent electrical inspector Bruce Gosling, who told New Zealand’s EnergySafe that the units constituted “a potential fire hazard [that] breaches NZ Electricity Regulations 1997…this model of fridge/freez-


er needs to be modified.” Armed with this damning second opinion, Rogers blew the whistle, a move that ultimately made him and his wife close their lucrative business. As Rogers told Investigate at the time, “It got pretty ugly…they appointed another service company to take over from us, and we said we’d had enough and closed down. We didn’t want to work like that, we couldn’t work like that.” In the wake of this report, Investigate has found another case of a Fisher & Paykel fridge going up in flames – causing thousands of dollars in property damage, though luckily no deaths or injuries. And, amazingly, consumer regulatory authorities have done precious little to solve the problem. Tragedy Averted Robyn Docker, who lives on a rural property in Victoria, is one of the latest victims of this phenomenon. Docker, who shares a house with her 9 and 10 year old sons (as well as two collies and a pair of Shetland sheep dogs), nearly had Christmas stolen from her when, shortly before the holiday, the 381 litre Fisher & Paykel ActiveSmart fridge she kept in a large shed fitted out as a games room caught fire. “The fridge was always making cracking noises”, Docker recalls, which was the only suggestion that anything might possibly be amiss with the nearly two-year-old unit she bought in January of 2004. “If it had been in the house, I would have heard it all the time, but because it was out in the shed, I didn’t think about it a lot.” All that would change, the evening of 18 December 2005. At around 6:30 PM or so, her ex-husband called and wanted to speak to one of the boys, who was sitting outside the back of the house. When she went out to fetch her son to take the phone call, she noticed something was very wrong: smoke was INVESTIGATEMAGAZINE.COM, February 2006, 37

pouring out of the shed, and even more ominously, flames were licking at the overhanging gum trees. Had the call come much later, the trees could have caught fire and brought disaster to the main house – or to the dry paddocks nearby. “I went to see what was happening, and flames were coming up the fridge all the way to the top of the thing. I called the Fire Brigade, and got the kids and the dogs and my laptop and drove up to the top of the driveway,” says Docker. “The really scary thing is that the following Wednesday one of my sons was going to have a big sleepover in the shed. It was going to be the last day of school, and his birthday is in January, and we were going to have seven or eight kids, eight and nine year olds, out there. It could have been a really horrible tragedy.” Even without the sleepover and the terrible prospect of lost young lives, Docker is counting her blessings. “I just had a builder come out this morning who said it would cost $5,000 just to fix the trusses, the wooden beams, put in a new roof, skylight, exterior walls, that sort of thing”, she says, though as her photographs of her burned-out bar and charred fittings suggest, it will cost more than just five grand to put her games room and tool shed back together. But again, it could have been worse: “There were a lot of trees around the shed, and if I wasn’t home it might have caught on the trees and brought down the house.” “I’m looking at about $12,000 that could have been $300,000 – and maybe some lives.” 38, INVESTIGATEMAGAZINE.COM, February 2006

“I went to see what was happening, and flames were coming up the fridge all the way to the top of the thing. I called the Fire Brigade, and got the kids and the dogs and my laptop and drove up to the top of the driveway”

Cold Reception, Quick Response So what has Fisher & Paykel’s reaction been to all this – to say nothing of the relevant regulatory authorities in Australia and New Zealand? In the case of the fire at Robyn Docker’s property, everyone who saw the damage agreed that the fridge caused the fire. After the local Fire Brigade got through putting out the flames, the crew said that it was definitely Docker’s refrigerator that caused half her shed to go up in smoke. However, because that part of her property wasn’t insured, the authorities did not send out an investigator to take a report. Photos of the damage show just how hot the fridge got, and the burned-

out blackened base of the unit that resulted – to say nothing of the damaged property and installations radiating from ground zero. And, of course, Docker saw the fire in its relatively early stages, when flames were pouring out of the casing of the unit. Fisher & Paykel, meanwhile, adopting the stance in Investigate’s earlier exposé, immediately replaced Docker’s refrigerator – the new model currently sits, still in its box, at Robyn’s property, waiting for the shed to be rebuilt – and took away the charred remains of the old one. (Indeed, it’s questionable how much forensic knowledge, if anything, could be gleaned from the remains of Docker’s previous unit, given that all that remained was “charcoal and a bit of glass – the technical representative from Fisher & Paykel just took my word for it that it was one of their fridges!”, she says). Beyond that, the whitegoods giant is keeping its cards fairly close to the vest; when confronted with Docker’s story, Brian Nowell from Fisher & Paykel’s headquarters in New Zealand simply said, “It’s early days. We treat issues like these very seriously. We’ve got the matter under investigation and if it shows the refrigerator is at fault, we’ll take appropriate action.” What that could mean remains to be seen – though the notion that an appliance that, by definition, needs to stay powered-up 24 hours a day, even when people sleep, could catch fire so dramatically is something that one would think would warrant serious concern. Following the first Investigate report, and in response to a query on the subject from National’s Katherine Rich, Associate Minister for Crown Minerals, Harry Duynhoven told Parliament that the Energy Safety Service has been aware of potential problems with Fisher & Paykel fridges catching fire as far back as four years ago. “The Energy Safety Service received a report on the potential fire hazards with certain models of Fisher & Paykel fridge/ freezers in a letter dated 11 November 2001. This report was received by a technical advisor handling the appliance issues As a result of its investigations the Energy Safety Service advised Fisher & Paykel of its concerns and Fisher & Paykel were asked to advise what action it intended to take”, Duynhoven’s staff tells Investigate. “Fisher & Paykel were contacted by phone on 5 December 2001, followed by a fax on 6 December 2001. the company responded by phone indicating the design improvements it would make to overcome this potential problem.” So far, however, fires like that which occurred in Robyn Docker’s shed suggest that whatever design changes were made may not have worked; furthermore, the electrical inspector and the appliance technician who initially brought their concerns about the refrigerator’s design to Investigate believe that Fisher & Paykel has done nothing to change the design. Australian authorities, meanwhile, are even further behind on this issue which has all the ingredients necessary for a high-profile, headline-making scandalous tragedy. When Investigate called EnergySafety Victoria, we were told that they couldn’t give any information on any problems with Fisher & Paykel fridges causing fires, but invited us to file a Freedom of Information Act request if we wanted to pursue the matter further. Meanwhile, the division of the Australian Competition and Consumer Commission, or ACCC, which is responsible for things like product recalls, the Product Safety Policy Section, says that they have no record on file of com40, INVESTIGATEMAGAZINE.COM, February 2006

plaints about Fisher & Paykel fridges in their office. Indeed, according to Assistant Director Kerry Ashbolt, the recall process is really one that is largely driven by manufacturers on a voluntary basis. “We don’t have any current recalls on Fisher & Paykel products”, Ashbolt said. She went on to explain that in Australia, product recalls are almost always instituted by the manufacturers themselves; after all, she explains, they are the ones with the facilities to test their products, and the ACCC is not in the position of a research lab. However, according to her agency’s Web site (, “The Parliamentary Secretary to the Treasurer (the Australian Government’s consumer affairs spokesman) does have the power to order a compulsory recall of a product if it will or may cause injury to a person AND where it appears that the supplier has not taken satisfactory action to prevent the goods from causing injury.” Of the 160 consumer product recalls that took place in Fiscal Year 2004/2005, however, Ashbolt couldn’t recall any that were government-initiated, though if there were any, that number would be a very small part of the total. “We can negotiate with suppliers”, offered Ashbolt, “but it’s difficult if we haven’t done the tests. It doesn’t happen very often.” Energy Safe New Zealand is awaiting formal confirmation from the Australian authorities before it takes any action, but precisely what kind of action it could take remains unclear. Because fridges are an essential item, a product recall of millions of refrigerators across the world would create havoc for consumers, as well as Fisher & Paykel. Nonetheless, NZ Consumer’s Institute director David Russell says if a recall is necessary, it must take place. “If the circumstances warrant it, if a verifiable risk exists, then the Minister of Consumer Affairs has powers under the Fair Trading Act to impose a recall if there is verifiable problem.” Given that Energy Safe now confirm that Fisher & Paykel made design changes as a result of the original alert in 2001, Russell takes that as an admission that a problem existed and says Energy Safe have a duty to investigate the latest developments. He says the level of “risk” needed to trigger a product recall is not determined by whether the problem happens regularly. “It’s not bodies in the mortuary that they’re required to wait for before they act. It is the potential for a verifiable problem to develop that is the risk, under the Act.” But what about the scale and size of a recall? “These things can be done in an orderly fashion.” Russell adds that all electrical appliances and brands carry with them some fire risk, by definition of being electrical. But he says that where the risk of fire can be shown to be enhanced by a verifiable design issue, that would be sufficient for authorities to act on in his opinion. Today Robyn Docker is left with a burned-out shed and a brand-new fridge still in its box – she’s still waiting to see if she can come to terms with Fisher & Paykel and get paid out for the damage to her property. But she’s also still got her two boys, her four dogs, and the stand of gums that could have ignited – but didn’t – which means she still has her house as well. “Don’t get me wrong,” she says. “I am just so very grateful that it wasn’t much worse.” What worries her most is whether it will happen again, and this time, whether someone will die.


VACCINES, ASTHMA & AUTISM New evidence suggests a link


The medical establishment keeps on dismissing the links, but as UPI’s DAN OLMSTED discovers, the evidence that childhood immunizations could be the cause of asthma and autism continues to mount


omething happened among children born in the early 1930s to bring autism to the attention of Leo Kanner, the eminent and experienced Johns Hopkins University psychiatrist who first described the disorder in a landmark 1943 paper. At the same time, a Viennese pediatrician named Hans Asperger was noticing a remarkably similar, though somewhat less severe, syndrome that came to bear his name. The first two patients – Donald T in the United States and Fritz V in Austria – were born within four months of each other in 1933. Yet supposedly these unique, impossible-to-miss children with Autism Spectrum Disorders had been around in similar numbers since the dawn of time? Experts disagree, but our first and still-tentative conclusion is that’s just plain unlikely. Scattered cases, sure. But 1 in 166, the current U.S. autism rate in children? We don’t see it. Instead, it appears more likely something happened around 1930 to set off the age of autism. Clearly, there are clues in the striking commonalities among the first U.S. families stricken with the disorder. They were college-educated; many had advanced degrees; four of the fathers in the first 11 families identified by Kanner were medical doctors – psychiatrists, to be precise. There were professors, lawyers, scientists, engineers. One mother was also a doctor, and all of them were smart, accomplished women. Some think that suggests a “geek effect,” in which gummedup genes finally find each other and generate offspring who aren’t just brainy and distracted, they’re downright autistic. Based on our own reporting, we don’t buy that -- where were all the autistic offspring of geeks before 1931, the year the oldest child ever diagnosed by Kanner was born? Coincidence or not, 1931 appears to be the first year in which U.S. vaccines contained a mercury preservative called thimerosal, and that yields an alternate hypothesis that could explain the decisive increase in cases that we think is probable. Some parents and a minority of scientists now believe thimerosal – which is about half ethyl mercury by weight – is behind most autism cases, perhaps triggering the disorder in a genetic subset of children who lack the ability to excrete it. Although it wasn’t fully understood at the time, organic mercury is a potent neurotoxin in even minute quantities; beginning in 1999 thimerosal was phased out of routine childhood immunizations, though US federal health authorities say it is safe in that form, and they stand by its continued use in flu shots for pregnant women and toddlers. An alternative to the “geek theory” is that those first 11 families back in the 1930s – especially the ones with links to the medical world – would have had had the information, income and access to take advantage of the latest health innovations and vaccinate themselves and their children. A related hypothesis has been proposed by Mark Blaxill, a director of the anti-mercury-in-medicine group SafeMinds. He suggests an association between several more of those first 11 cases and ethyl-mercury-based fungicides that came on the INVESTIGATEMAGAZINE.COM, February 2006, 43

market at the same time, patented by the same scientist who developed thimerosal. Case 1 in Kanner’s study – Donald T., born in 1933 – came from an area surrounded by a forest being replanted with seedlings by the Civilian Conservation Corps. Case 2’s father was a plant pathologist. Case 3’s was a forestry professor at a Southern university. Case 4’s was a mining engineer. Case 8’s was a chemist-lawyer at the U.S. Patent Office. All of them might have come in contact with mercury or other toxic compounds.


iven this intriguing though by no means conclusive set of associations, it’s possible those parents were not in fact passing on malignant mutations of the genes that made them doctors, forestry professors, plant pathologists, chemists. Rather, through their particular professions they might have exposed their children to something wholly new in commercial medical and agricultural products, something they did not know was devastatingly neurotoxic to developing brains. That might make the age of autism, in effect, the age of organic mercury. Not that it proves anything, but looking back recently through the groundbreaking book “Infantile Autism” by Bernard Rimland, something struck us that we hadn’t noticed before. This 1964 work is widely credited with single-handedly debunking the idea that “refrigerator mothers” or aloof fathers caused autism. Reviewing the rare descriptions of children with autistictype behavior prior to Kanner’s 1943 paper, Rimland noted a case that “sounds very much like autism.” That child’s father, Rimland said, “was a Ph.D.” A professor of chemistry. That’s the kind of detail that means nothing to the experts looking for incredibly complex gene interactions to explain autism, but it makes a layman’s hair stand on end. As we pressed to find more about those early cases, the trail led all the way back to Case 1 himself, and to a small town in Mississippi: Missing in Mississippi On a sweltering late August morning we climbed the stairs to a second-floor law office in a small town in Mississippi. We introduced ourselves to the brother of Donald T., the first person ever diagnosed with autism. Donald was born in 1933; he came to the attention of the medical world in 1938, when his parents took him to see the renowned child psychiatrist Leo Kanner at Johns Hopkins University in Baltimore. Over the next four years Kanner saw 10 more children exhibiting the same unique behavior syndrome, and in 1943 he introduced the disorder in an article titled, “Autistic Disturbances of Affective Contact.” While Kanner did not identify Donald by his full name, we were able to determine his identity and learned he was still alive at age 71. That’s what brought us to his brother’s office – looking for clues to the roots and rise of a devastating disorder that seemed rare when Donald was born, but now affects 1 in every 166 U.S. children.


Donald, his brother told us, was out of town. But speaking in a courtly, deliberate manner and without any prompting on our part, he told a remarkable story: At age 12 Donald had been living with a nearby farm couple. “One February day, I think it was, they came to (town) with Don. He had a bad fever and was obviously sick.” His joints were swollen and stiff, his brother said. “My father and mother took him to all various places for examination – they went to Mayo Clinic, brought him back. He lost his appetite and was terribly emaciated. But anyway, my father was talking to a doctor (in a nearby town) he happened to run into and said, ‘It looks like Don is getting ready to die.’” The doctor said, “What you’re describing sounds like a rare case of juvenile arthritis.” Diagnosis in hand, his parents took Donald to the eminent Campbell Clinic in Memphis, where he was treated with the then-standard remedy, gold salts. “He just had a miraculous response to the medicine,” Donald’s brother said. “The pain in his joints went away.” And here’s the kicker: “When he was finally released the nervous condition he was formerly afflicted with was gone. The proclivity toward excitability and extreme nervousness had all but cleared up.” He also became “more social.” In other words, Donald got a lot better. He went on to college, joined a fraternity, worked at a bank, owns a house, drives a car, belongs to the Kiwanis and the Presbyterian Church and plays a good game of golf despite one fused knuckle left over from the arthritis attack. And now, in retirement, he travels the world. That explained why he wasn’t in town – he was off having a good time. Last stop: Italy. Favorite city: Istanbul. Because Donald did not respond to a request for an interview made through his brother, we are not identifying him at this time. Most of the rest of the first 11 children identified by Leo Kanner depended for the rest of their lives on the kindnesses of strangers: They lived in back wards or, if they were lucky, group homes or other sheltered arrangements. Donald’s brother told us Johns Hopkins researchers have been in touch every decade to check on Donald, but we’re not aware of any published accounts of Donald’s improvement following the gold-salts treatment – something his brother volunteered to us in a half hour of conversation. Regardless, the fate of the first child ever diagnosed with the disorder seems more relevant today than ever before. One reason: Some parents, under the guidance of several hundred doctors who have broken away from the medical mainstream, are trying a variety of medical interventions to treat their autistic children. These range from restrictive diets to cod-liver oil to methyl B-12 shots to the most controversial technique, called chelation (key-LAY-shun). This involves giving a child a drug -- orally, via creams or in some cases, intravenously -- that is designed to pull heavy metals, in particular mercury, from the body. The process carries risks: Last year a 5-year-old autistic child died while undergoing intravenous chelation in Pennsylvania. The theory behind it – rejected by federal health authorities and most scientists – is that in most cases autism is actually a form of mercury poisoning. The mercury in question came from some childhood immunizations, which beginning

Frederick Nijssen (8), was diagnosed with autism at 30 months, shortly after receiving his MMR immunization shot. Doctors told his parents Rob and Anita, there was no cure and years of suffering were ahead. But Rob refused to give up. After many hours spent researching autism he believes a treatment should involve treating the cause, not the symptoms. He believes autism is caused by a weakened immune system which then allows viruses and bacteria to attack the nervous system. Now, after years of trial and error in the face of medical scepticism, he believes he found a cure. He aims at building up his son's immune system by the right mixture of vitamins, minerals, probiotics and other components. He says the treatment improved his son's digestion, his moods became stable and he slept better. British scientists will begin testing Nijssen's treatment in a major medical trial to find out if it indeed could cure autism. Pictured: ROB NIJSSEN with his wife ANITA and their autistic son FREDERICK.


around 1930 contained an ethyl-mercury preservative called thimerosal. The Centers for Disease Control and Prevention, the American Academy of Pediatrics and other experts say that concern is unfounded, but they recommended in 1999 that it be phased out of childhood vaccines in the United States as a precaution. The questions raised by Donald’s improvement are both simple and potentially significant: Did the gold-salts treatment alleviate his autistic symptoms, and if so, why? Did the juvenile arthritis – an autoimmune condition – and the autism improve markedly at the same time because both were responses to a toxic exposure? Did the gold salts help pull mercury from Donald’s body, and/or reduce an inflammatory immune response in his brain? Or is it all coincidence, or a memory blurred by the passage of 59 years? Such questions, or course, are speculative, and some have criticized us for even asking them, given the assurances of the CDC and medical groups and the importance of immunizations in preventing infectious disease. But something good did seem to happen to one autistic child who was about to die: Donald T. All we’re interested in is, why? Gold salts pass a test In a striking follow-up to our research on the first child diagnosed with autism – and his improvement after treatment with gold salts – a chemistry professor says lab tests show the compound can “reverse the binding” of mercury to molecules. “This does lend support to the possible removal of mercury from biological proteins in individuals treated with gold salts,” says Boyd Haley, professor and former chemistry department chair at the University of Kentucky. The potential significance: Donald T. – Case 1 among children diagnosed with autism in the 1930s – showed marked improvement in his autistic symptoms after being treated with gold salts for an attack of juvenile rheumatoid arthritis.


ne theory of autism – strongly dismissed by federal health authorities and mainstream medical groups – is that the disorder is primarily caused by a mercury preservative called thimerosal that was used in vaccines beginning in the 1930s. Some parents and researchers who believe autism is, in essence, mercury poisoning are using treatments designed to remove mercury from the body or offset its neurological effects. Haley is among a minority of scientists who holds this view, and after reading about Donald’s improvement he set out to test whether gold salts have any effect on mercury. “You follow your nose in research, and when I saw that I thought, yes, this is a possibility.” Haley’s experiment was quite simple: He began with a coloured thiol-containing compound. Thiols are the class of molecules that contain a sulfhydryl group (a sulfur and hydrogen atom bound together) and, because of the affinity of mercury for sulfur, these molecules bind tightly to mercury. Thiols are found in most enzymes, and when mercury binds to them, these enzymes lose their biological activity, which is needed to maintain healthy cells, he said. Haley performed two tests involving inorganic mercury –


“Regardless, the fate of the first child ever diagnosed with the disorder seems more relevant today than ever before. One reason: Some parents, under the guidance of several hundred doctors who have broken away from the medical mainstream, are trying a variety of medical interventions to treat their autistic children”

the type of mercury thimerosal breaks down to in the brain. Haley’s compound was designed to turn colourless when mercury binds to it. In the first test, he added the mercury, and the “optical density” measurement went from 0.23 units down to 0.11 units immediately, and down to 0.03 units in half an hour – a clear sign that the mercury had bound to the thiol. In the second test he premixed the mercury with gold salts for two minutes, then added it to the same solution. This time the optical density dropped to 0.11 but then slowly increased back up to 0.23 within about 30 minutes – “totally the opposite of the situation with mercury alone,” Haley said. “The only way this could happen would be for the gold salts to remove mercury from the thiol-containing compound.” The advocacy group SafeMinds – which opposes the use of mercury in medicines and provided Haley with the $142 prescription of gold salts to test – called the results potentially significant but cautioned against premature use of the compound to treat autistic people. “Clinicians have shown that some autistic children show strong recovery from their symptoms after biomedical treatment,” says SafeMinds’ Mark Blaxill. “So any time we discover a treatment that works in a child, we need to take it seriously. “According to his brother’s unprompted report, Donald T. recovered from autism after treatment with gold salts. We should be all over that, especially after Boyd’s work. But we need to proceed with care to make sure that this is a safe treatment.” Haley makes the same point. “Please note that I am not recommending using gold salts to treat autistics, but it would certainly be worth a project if carefully monitored by a physician in a good clinic.” Donald was given injections of the salts over a two- to threemonth period at the Campbell Clinic in Memphis at age 12 in 1947. Before Haley tested the gold salts, he told us why he thought it was worth investigating. “Nothing has a higher affinity for mercury than elemental gold. They form bonds that are very tight,” Haley explained. Devices designed to detect and filter out mercury routinely use gold, he noted – and they obviously would employ a less expensive element if gold weren’t so effective. Mercury was also used to extract gold from ore in mining operations. In the body, Haley said, gold likely is “attracted to the same places as mercury. They would probably make it to the same spot in the body. It (gold) would probably cross the blood-brain

barrier like mercury. There are reasons to think that if you put it in, it would chase mercury down because they’re very similar in their chemistry. “So you might be able to displace it with the gold. The chemistry gets complicated here, but gold does not do as much oxidative stress as does mercury. The gold isn’t nearly as toxic as the mercury. ... It could take it off the enzyme it’s inhibiting and reactivate that enzyme.” Haley said he was intrigued that the treatment may have benefited Donald when he was 12–- old for such a positive response, according to proponents of biomedical therapies. The most controversial such treatment is chelation, which uses drugs in an attempt to pull toxic metals – mercury in particular – from the body. “It doesn’t seem to work with the older kids,” Haley said. “These older kids are just lost.” But, Haley emphasized: “Don’t jump on this. Be careful. You can hurt kids.” A pretty big secret It’s a far cry from the horse-and-buggies of Lancaster County, Pennsylvania to the cars and motorways of Cook County, Illinois. But thousands of children cared for by Homefirst Health Services in metropolitan Chicago have at least two things in common with thousands of Amish children in rural Lancaster: They have never been vaccinated. And they don’t have autism. “We have a fairly large practice. We have about 30,000 or 35,000 children that we’ve taken care of over the years, and I don’t think we have a single case of autism in children delivered by us who never received vaccines,” says Dr. Mayer Eisenstein, Homefirst’s medical director who founded the practice in 1973. Homefirst doctors have delivered more than 15,000 babies at home, and thousands of them have never been vaccinated. The few autistic children Homefirst sees were vaccinated before their families became patients, Eisenstein says: “I can think of two or three autistic children who we’ve delivered their mother’s next baby, and we aren’t really totally taking care of that child – they have special care needs. But they bring the younger children to us. I don’t have a single case that I can think of that wasn’t vaccinated.” The autism rate in Illinois public schools is 38 per 10,000, according to state Education Department data; the US Centers for Disease Control and Prevention puts the national rate of autism spectrum disorders at 1 in 166 – 60 per 10,000. “We do have enough of a sample,” explains Eisenstein. “The numbers are too large to not see it. We would absolutely know. We’re all family doctors. If I have a child with autism come in, there’s no communication. It’s frightening. You can’t touch them. It’s not something that anyone would miss.” No one knows what causes autism, but federal health authorities insist it isn’t childhood immunizations. Some parents and a small minority of doctors and scientists, however, assert vaccines are responsible. The UPI news team has been looking for autism in nevervaccinated U.S. children in an effort to shed light on the issue. We went to Chicago to meet with Eisenstein, and we also visited Homefirst’s office in northwest suburban Rolling Meadows. Homefirst has four other offices in the Chicago area and a total of six doctors.

“The autism rate in Illinois public schools is 38 per 10,000, according to state Education Department data; the US Centers for Disease Control and Prevention puts the national rate of autism spectrum disorders at 1 in 166 – 60 per 10,000”

Eisenstein stresses his observations are not scientific. “The trouble is this is just anecdotal in a sense, because what if every autistic child goes somewhere else and (their family) never calls us or they moved out of state?” In practice, that’s unlikely to account for the pronounced absence of autism, says Eisenstein, who also has a bachelor’s degree in statistics, a master’s degree in public health and a law degree. Homefirst follows state immunization mandates, but Illinois allows religious exemptions if parents object based either on tenets of their faith or specific personal religious views. Homefirst does not exclude or discourage such families. Eisenstein, in fact, is author of the book “Don’t Vaccinate Before You Educate!” and is critical of the CDC’s vaccination policy in the 1990s, when several new immunizations were added to the schedule, including Hepatitis B as early as the day of birth. Several of the vaccines – HepB included – contained a mercury-based preservative that has since been phased out of most childhood vaccines in the United States. Medical practices with Homefirst’s approach to immunizations are rare. “Because of that, we tend to attract families that have questions about that issue,” says Dr. Paul Schattauer, who has been with Homefirst for 20 years and treats “at least” 100 children a week. Schattauer seconded Eisenstein’s observations. “All I know is in my practice I don’t see autism. There is no striking 1-in-166.” As noted earlier, we found the same phenomenon in the mostly unvaccinated Amish. CDC Director Dr. Julie Gerberding claims the Amish “have genetic connectivity that would make them different from populations that are in other sectors of the United States.” Gerberding admits, however, studies “could and should be done” in more representative unvaccinated groups – if they could be found and their autism rate documented. Chicago is America’s prototypical “City of Big Shoulders,” to quote Carl Sandburg, and Homefirst’s mostly middle-class families seem fairly representative. A substantial number are conservative Christians who home-school their children. They are mostly white, but the Homefirst practice also includes black and Hispanic families and non-home-schooling Jews, Catholics and Muslims. They tend to be better educated, follow healthier diets and breast-feed their children much longer than the norm – half of Homefirst’s mothers are still breast-feeding at two years. Also,


because Homefirst relies less on prescription drugs including antibiotics as a first line of treatment, these children have less exposure to other medicines, not just vaccines. Schattauer, interviewed at the Rolling Meadows office, says his caseload is too limited to draw conclusions about a possible link between vaccines and autism. “With these numbers you’d have a hard time proving or disproving anything. You can only get a feeling about it. “In no way would I be an advocate to stand up and say we need to look at vaccines, because I don’t have the science to say that, but I don’t think the science is there to say that it’s not.” Schattauer says Homefirst’s patients also have significantly less childhood asthma and juvenile diabetes compared to national rates. An office manager who has been with Homefirst for 17 years says she is aware of only one case of severe asthma in an unvaccinated child. “Sometimes you feel frustrated because you feel like you’ve got a pretty big secret,” Schattauer sighs. He argues for more research on all those disorders, independent of political or business pressures. The asthma rate among Homefirst patients is so low it was noticed by the Blue Cross group with which Homefirst is affiliated, according to Eisenstein.


n the alternative-medicine network which Homefirst is part of, there are virtually no cases of childhood asthma, in contrast to the overall Blue Cross rate of childhood asthma which is approximately 10 percent,” he said. “At first I thought it was because they (Homefirst’s children) were breast-fed, but even among the breastfed we’ve had asthma. We have virtually no asthma if you’re breast-fed and not vaccinated.” Because the diagnosis of asthma is based on emergency-room visits and hospital admissions, Eisenstein explains, Homefirst’s low rate is hard to dispute. “It’s quantifiable – the definition is not reliant on the doctor’s perception of asthma.” Several studies have found a risk of asthma from vaccination; others have not. Studies that include never-vaccinated children generally find little or no asthma in that group. Last year Florida pediatrician Dr. Jeff Bradstreet noted there is virtually no autism in home-schooling families who decline to vaccinate for religious reasons – lending credence to Eisenstein’s observations. “It’s largely non-existent,” says Bradstreet, who treats children with autism from around the country. “It’s an extremely rare event.” Bradstreet has a son whose autism he attributes to a vaccine reaction at 15 months. His daughter has been home-schooled, he describes himself as a “Christian family physician,” and he knows many of the leaders in the home-school movement. “There was this whole subculture of folks who went into home-schooling so they would never have to vaccinate their kids. There’s this whole cadre who were never vaccinated for religious reasons.” In that subset, he says, “unless they were massively exposed to mercury through lots of amalgams (mercury dental fillings in the mother) and/or big-time fish eating, I’ve not had a single case.” 48, INVESTIGATEMAGAZINE.COM, February 2006

“Several studies have found a risk of asthma from vaccination; others have not. Studies that include never-vaccinated children generally find little or no asthma in that group. Last year Florida pediatrician Dr. Jeff Bradstreet noted there is virtually no autism in home-schooling families who decline to vaccinate for religious reasons – lending credence to Eisenstein’s observations”

Federal health authorities and mainstream medical groups emphatically dismiss any link between autism and vaccines, including the mercury-based preservative thimerosal. In 2004 a panel of the Institute of Medicine, part of the National Academies, claimed there was no evidence of such a link, and funding should henceforth go to “promising” research. Thimerosal, which is 49.6 percent ethyl mercury by weight, was phased out of most U.S. childhood immunizations beginning in 1999, but the CDC recommends flu shots for pregnant women and last year began recommending them for children 6 to 23 months old. Most of those shots contain thimerosal. Thimerosal-preserved vaccines are currently being injected into millions of children in developing countries around the world. “My mandate ... is to make sure at the end of the day that 100,000,000 are immunized ... this year, next year and for many years to come ... and that will have to be with thimerosalcontaining vaccines,” said John Clements of the World Health Organization at a June 2000 meeting called by the CDC. That meeting was held to review data that thimerosal might be linked with autism and other neurological problems. But in 2004 the Institute of Medicine panel said evidence against a link is so strong that health authorities, “whether in the United States or other countries, should not include autism as a potential risk” when formulating immunization policies. But where is the simple, straightforward study of autism in never-vaccinated children? Based on our admittedly anecdotal and limited reporting among the Amish, the home-schooled and now Chicago’s Homefirst, that may prove to be a significant omission. IN NEW ZEALAND: From what we could ascertain from vaccine data sheets on a Ministry of Health affiliated website ( and the Immunisation Awareness Society (, thimerosal remains an ingredient in the infant HIB vaccine, the Fluarix flu vaccine and the Hepatitis B vaccine. Although the Ministry of Health site downplays the danger of thimerosal based on the Institute of Medicine report referred to in the main article, it would appear the IOM report may be flawed. This ongoing investigation into the roots and rise of autism welcomes comment. E-mail:

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BIG BANG THEORY How Waikato Hospital almost went ‘boom’ A hobby abseiler, whose resourcefulness saved the dairy industry millions of dollars, was the unsung hero who beat the clock to thwart New Zealand’s own potential “9/11”. MAURICE SMYTH reports that a deadly gas leak emergency, withheld from the media, could have blown out one entire wall of Waikato Hospital, averted by a glance from Lady Luck and the cool head of a former Dargaville dairy farmer 50, INVESTIGATEMAGAZINE.COM, February 2006


Photography: Oliver Lee


wo years ago, John Halliday took two calls within an hour in his Cambridge office from hospital executives going spare. Pressurised natural gas was bubbling up through toilets in a high rise block and, although it wasn't known at the time, in houses on an adjacent street. He kept the line open until he parked on the site – and realised he was staring horror in the face. Natural Gas brass were already there and gave him a hurried briefing, turning their backs on a strong gas smell from a manhole. Halliday was used to emergencies. His low-profile Extreme Group dealt with them in an atlas of countries. "I knew we were in deep trouble. If anyone had gone into a hospital toilet for a smoke, they would have blown out one side of the building – exposing wards, theatres, whatever – and many lives would have been lost". Theatre work was in progress and the hospital relied heavily on its gas supply. Evacuation was not an option but time was a deadly enemy. Protectively-suited men slithered through sewers to take readings and note gas bubble movements and, by a process of elimination, they homed in on a telltale high pressure hiss. A gas supply line had accidentally drilled through a concrete sewer with an inside glaze – no match for the powerful nose drill, causing a break. It was immediately below a hospital access road which bore heavy traffic. "Such roads move under the weight of big trucks and the movement had transferred down to where mud had sealed 50mm holes through each side of the sewer, which eventually shifted. Fast gas was seeking height to release itself". While a large excavator was laying bare the source, Halliday was harried by problems he could have done without. Rubberneckers had to be moved. Administrators impeded his work with questions, one asking "How much will all this cost?" "I asked him if he wanted a budget meeting or a solution. He went away. A doctor whose car was parked over a manhole insisted on driving home. We escorted him to a safer place, jacked up his car and slid it out of the way". Hospital visitors wanting to go home were asked for their keys while their cars were pushed to where they could safely be started. The gas pipe was pancake-clamped and the job handed over to the gas company. The work took two tense days, affecting only a few labs and sterilisation units for 12 hours. It all began with the thrill a man got from the controlled bounce of an abseil down rock faces. It came in handy 26 years ago when an engineer from a local diary company asked him if he could abseil into a large milkpowder spray dryer and seal cracks within a 10-day time frame. He didn't believe it been done before and called the then Labour Department in Whangarei who asked him to write an operational and safety procedure, which they approved. He did the job within a week. The story got about. 52, INVESTIGATEMAGAZINE.COM, February 2006

He addressed a conference of dairy company engineers in the Waikato, a life-changing decision. The Dargaville farm was replaced by another in Tirau which in turn was sold when the Edgecumbe earthquake soaked up his time – he had a payroll of 15 on engineer repair work, and he set up a business, working on the extremes of life. Overseas work flowed in – putting microwave dishes on tall towers in Macau, followed by contracts in Vietnam and Timor. "It was a volatile environment and we needed to ensure the security of our people". He figured others did too and so began a new business to which the faint-hearted need not apply, first appearing in the news last May when former Hawkes Bay French Foreign Legionnaire Brian Hamish Sands pleaded to be released from the clutches of the New Forces of the Ivory Coast. "We were up to do it. We had the manpower, the resources and the contacts", he said, dropping names such as Alain Lobognon, Communications Secretary and Major

Ouattara Morou, North-East Commander. It didn't happen because Foreign Affairs didn't sign off and beyond that, he wouldn't comment. He moved on, seeking ”unsolvable problems" where they lay, using home-contracted personnel with Foreign Legion, SAS and prison warden experience .... tough, disciplined men who use accumulated leave to hold down two jobs, one for twice the money their day job pays, providing for their families' future. It takes them to far-flung corners – Afghanistan, Sudan, Chad, French Guiana, Cambodia, and Colombia. The mantra is – mistakes have no place here. Since 9/ll in New York, and fuelled by Bali and London, new contracts have seen a new office block in the front garden replacing a corner room. At present, Halliday has four top operators training others overseas but he won't say in what. Others work in famine relief security, the protection of corporate high fliers, surveillance, use of sidearms, high speed

protection. They are fluent in French, Mandarin, Russian and Spanish – Kiwis all. The rich and famous need bodyguards while they're here, but do they carry sidearms? "I can't answer that". All inquiries are micro-checked and, at the slightest hint of hesitation or side-stepping, flagged away. In-house information is shared purely on a need-to-know basis.....but Halliday is hard to stop when he hits his straps. "Multi-nationals accept that governments are slow to move – too many regulations, too many bureaucrats protecting their asses, so they come to people like us. Education has been dumbed down. Students are taught by people who've never had life experience away from the whiteboard or computer." The lazy, he predicts, will stay in the wake of the best bluecollar workers who can now sell their time for six-figure fees on the world market, steadily closing the money gap on surgeons and lawyers. INVESTIGATEMAGAZINE.COM, February 2006, 53


D MINUTES TO MIDNIGHT A hair trigger and a Messiah complex

As if Israel didn’t have enough to worry about with a peace process hanging in the balance, now, MARTIN SIEFF writes, there’s a mad mullah convinced that Allah wants him to nuke the Jews WASHINGTON


he most dangerous strategic nuclear arms race in the world today is the one between Israel and Iran – far more complex than almost anyone realizes and vastly more dangerous. Ironically, the number of weapons involved on both sides are miniscule, not only by the standards of the U.S-Soviet/Russian Cold War nuclear balance, but also even compared with the much more limited strategic nuclear stand-offs centering around North Korea or India and Pakistan today. But that does not really matter: Far more important is the fact that the margin for error or miscalculation on either side is vastly smaller than in any other potential nuclear conflict in the world. And the danger that either party may react catastrophically to the fear that the other will attempt a devastating preemptive first strike is consequently far greater. Israel today has a far greater proportion of its population protected by state-of-the-art ballistic missile defense systems than any other country in the world. But since Israel is so small and since such a disproportionately large part of its population is vulnerably concentrated in a single thermonuclear kill zone in and around Tel Aviv, that speaks less to the Jewish State’s undoubted military and technological strengths than to its geographic and demographic vulnerabilities. As Dore Gold, former Israeli ambassador to the United Nations and an influential adviser to former Prime Minister Ariel Sharon told UPI recently, 70 percent of Israel’s total population and 80 percent of its infrastructure is concentrated in the Tel Aviv region. No other modern industrial nation has its population and key infrastructure so densely packed into such a small area, he noted. Ironically less than 60 years after the founding of the state in 1948 the Zionist dream, far from creating a state where large numbers of Jews were safer and more secure than anywhere else in the world, has created one where millions of them are now at more immediate risk of nuclear incineration than anywhere else in the world. The reason for this is not merely Iran’s relentless drive to acquire its own nuclear weapons and the delivery systems to carry them. It is the extreme rhetoric and truly unpredictable behavior of the new government in Tehran.



President Mahmoud Ahmadinejad has publicly threatened to wipe Israel off the face of the earth. He has questioned the historic veracity of the Holocaust, the genocidal mass killing of six million European Jews by the Nazis through World War II. And at the same time, he has embarked on the systematic purging of the Iranian government and armed forces of more moderate officials. He is also obsessed with the return of ‘the Mahdi’, an Imam who disappeared in the 10th century and who, according to Shia Islamic belief, is due to return soon as a messianic apocalyptic leader whose seven year reign ushers in Armageddon. “Our revolution’s main mission is to pave the way for the reappearance of the 12th Imam, the Mahdi,” Ahmadinejad told imams in a rousing sppech in November. “Therefore, Iran should become a powerful, developed and model Islamic society.” The Iranian leader’s recent address to the United Nations also contained numerous coded and not so coded references to the return of the Mahdi. The combination of Israel’s physical vulnerability with Iran’s political extremism has, therefore, produced a balance of terror that is now on a hair-trigger alert. No one knows for sure if Iran yet has any nuclear weapons of its own. The best available assessments suggest it is not yet in a position to make them and won’t have them for a few years yet, but no one knows for sure. And there is also the very real possibility that the CIA cannot confirm but cannot rule out either that Iran may have acquired at least four nuclear warheads some years ago illegally from stocks decommissioned and inadequately guarded following the disintegration of the Soviet Union at the end of 1991. There is no doubt that Iran already has nuclear-capable delivery systems capable of inflicting a first strike that could kill millions of Israelis, perhaps over the half the population in a single attack. Its Shehab-3 intermediate range missile has been successfully tested and is being continually upgraded. It is certainly reliable. Also, Ukrainian President Viktor Yushchenko has confirmed that under the previous regime of President Leonid Kuchma, Ukraine quietly sold 12 nuclear-capable cruise missiles to Iran. They are far slower than the Shehab ballistic missiles but their computer-guided, ground-hugging unpredictable flight paths could make them far more dififcult to intercept and shoot down. To guard against these threats, Israel has already developed or bought a formidable BMD (ballistic missile defence) arsenal. Its Arrow system anti-ballistic missile interceptor, co-built with Boeing, is the most advanced system of its kind in the world and was recently successfully tested against a simulated Shehab-3 attack. Israel also has acquired many batteries of the Patriot PAC-3 system from the United States. Ironically, early Patriots got a raw deal in the press after they performed very impressively in defending Tel Aviv from Iraqilaunched SCUD missile attacks in the 1991 Gulf War. Some U.S. analysts believe that this was encouraged by Israel to try and get more funding for the Arrow. But there is no doubt that for close-in ABM defense the Patriot remains the best interception system by far in the world. The Israelis are also aided by the limited amount of air space they have to defend. Still, like the Americans and the Soviets before them in the 58, INVESTIGATEMAGAZINE.COM, February 2006

There is no doubt that Iran already has nuclear-capable delivery systems capable of inflicting a first strike that could kill millions of Israelis, perhaps over the half the population in a single attack. Its Shehab-3 intermediate range missile has been successfully tested and is being continually upgraded. It is certainly reliable

1950s and ‘60s, the Israelis have come to the conclusion that no defense succeeds better than deterrence. As long as their own nuclear facilities -- the Dimona nuclear reactor in the Negev desert and Zacharias air force base south of Tel Aviv -- are limited in number and clearly known to their enemies, and since their main population is so concentrated and vulnerable, recent Israeli governments have recognized their need for a secure, survivable second-strike capability to guarantee a devastating response to any first strike, and they have deployed one. It exists in the form of three German-built and supplied diesel-engineered submarines, or U-boats, that carry nuclearcapable cruise missiles. Israel seeks to ensure that at least one of these vessels is on patrol at all times. Indeed, Prime Minister Ariel Sharon’s government had been seeking to broaden and deepen this second-strike force by acquiring two more submarines to add to it. The concept has impressed giant India so much that it has adopted it too as a second-strike deterrent against neighboring Pakistan. In India’s case, the submarines are French-built Scorpenes. Will it be enough? Against any rational national government, the answer would be certainly “yes.” But with Ahmadinejad, the jury for obvious reasons is still out. Ironically the Israelis and their strong friends in the Bush administration could yet prove to be their own worst enemies. For if there is one scenario where even previously rational national leaders, let alone extreme ones, might be tempted to press their nuclear launch buttons, it is when they are convinced that they are going to be attacked anyway and have therefore nothing to lose. Judged from this perspective, Israel’s previous exercises carrying out mock air attacks against a scale model of Iran’s Bushehr nuclear reactor in the Negev desert, and the tough moves of the Bush administration to confront Iran on the nuclear issue, clearly run the risk of provoking the very thermonuclear nightmare they are meant to prevent: They could convince the government in Tehran that it is under imminent threat of U.S. or Israeli attack and thereby panic it into launching any nuclear weapons it already has. In that case, Israel’s ultimate line of defense would be its Arrows and its Patriots. There is no doubt that operationally they will work well: The as-yet-untested question is whether they will work flawlessly with only seconds to spare and no margin for error whatsoever. The lives of millions will be on the line.



Investigate Feb 2006  

main features

Investigate Feb 2006  

main features