David Fisher has been searching the database of CIA files that has just become available online. It shows that Robert Muldoon sought help from President Ronald Reagan to help him get re-elected in 1981.
Inside the top secret CIA files on New Zealand – who they spied on and what they said
The papers repeatedly mentioned Muldoon’s appreciation of the relationship with the US and a 1981 briefing from the CIA to the White House showed it was reciprocated.
A memo to President Reagan pointed out Muldoon had a “difficult” election that year and the visit to the US was an “opportunity to show the New Zealand people that he is an international leader of some stature who is taken seriously in Washington”.
It was suggested Muldoon would welcome an “expression of hope” from President Reagan “that he will emerge victorious”.
I don’t know whether Reagan publicly supported Muldoon. He had taken over as US president in January 1981.
National won the November 1981 election with a majority of just one after a recount gave them a 150 vote majority in the Gisborne electorate.
1981 was dominated by the Springbok tour, and National campaigned on their ‘Think Big’ policy, but a word from Reagan (if he gave it)may have made a difference.
By the time of the key 1984 election, the CIA prepared a full biography of Muldoon.
“Now in his 14th year as Minister of Finance, he fancies himself as one of the senior statesmen on the international financial scene.”
It described Muldoon’s success with NZ’s economy as “limited” but said it had “not deterred him from preaching international monetary reform to world leaders … at every opportunity”.
Muldoon’s ‘success’ was less than ‘limited’, his mismanagement and interventions had just about wrecked the New Zealand economy.
The country’s economy was in a dire situation when National under Muldoon lost the snap (or schnapps) election in 1984 in a landslide to Labour under David Lange.
The CIA also warned that a Labour victory “would create difficulties in the US relationship”. It was also concerned at the resurgent nuclear-free movement which was being pushed by Labour.
Self interest. The nuclear ships ban that eventuated led to the US creating difficulties for themselves in their relationship wit New Zealand, pretty much out of spite.
“Unable to come up with policies of its own to cure New Zealand’s economic ills, Labour sees political benefit in identifying with a fear of nuclear contamination that is widespread and growing in New Zealand and which spans the political spectrum,” the CIA report stated.
So Labour duped the US just as they duped the New Zealand voters.
Before Lange was sworn in a foreign exchange crisis arose. The NZ dollar was overvalued and following the announcement of the snap election in June traders started selling it off on the assumption that Labour would win the election and devalue the currency.
Muldoon refused to follow Lange’s instruction to devalue the currency, making the dollar’s situation more untenable, but eventually relented.
Lange’s government had to deal with a severe balance of payments crisis as a result of the deficits fueled by Muldoon’s two-year freeze on wages and prices and his maintenance of an unsustainable exchange rate.
This prompted the incoming Minister of Finance Roger Douglas to launch into economic reforms that were largely successful in starting a cure of New Zealand’s economic ills (Muldoonitis).
It would be interesting to know whether it was common for New Zealand politicians to seek public support from US presidents in our elections, and whether any presidents openly chose sides.
