How a journalist uncovered a surprise citizen of New Zealand: US tech tycoon Peter Thiel.
At the end of January 2017, journalist Matt Nippert uncovered a surprise citizen of New Zealand: US tech tycoon Peter Thiel. In a series of email conversations between March and April 2017, Nippert told Exposing the Invisible how the story unfolded.
Thirty minutes before his print deadline at the New Zealand Herald, business investigations reporter Matt Nippert received some information from an important source that would come to dominate his reporting and cover front pages around the world.
That source was the New Zealand Overseas Investment Office, confirming that Peter Thiel, a US venture capitalist, had been granted New Zealand citizenship in 2011. Nippert, a seasoned journalist who had spent the previous decade breaking stories on tax avoidance, hackers and lobbyists’ influence, knew he had a major news story on his hands. How could a tech-multi-billionaire-turned-Trump-advisor come to have citizenship in a country where he had never lived nor could claim citizenship by descent?
Nippert found himself in the middle of a novel, but familiar, situation. What had begun as a problematic but comparably innocuous story about the government’s handling of Thiel’s purchase of a multi-million dollar property in Glendhu Bay became something far bigger.
With his print deadline looming and mounting pressure to file his original story, he quickly submitted the article, cleared his calendar for the rest of the week and began digging.
The Fellowship of the Rich
New Zealand, a country where the sheep outnumber the people six to one, has become a destination for rich North American survivalists. These so-called “preppers” make plans for life in the event of societal breakdown but prepping looks quite different when you have the budget, network and technological know-how of the Silicon Valley elite. These elite worriers are reported to be currently buying up expensive land across the globe and building underground shelters and helicopter pads for use in the event of a Doomsday scenario.
New Zealand is seen by these preppers as a haven of relative self-sufficiency, security and political predictability and there is a documented trend of Silicon Valley leaders buying property and land in the North and South Islands as part of their Doomsday preparations. Commentators liken these tech titans making these types of preparations for catastrophe to the middle-class buying a second home. The obsession of Silicon Valley inhabitants with radical life extension research in order to “end aging forever” has seemingly extended to making preparations to ensure that Doomsday is (for them if no one else) only one of several options.
Image from the Survival Condo website, whose service offers 'state-of-the-art technologies, combined with the comfort and luxury.'
It is not only the relative safety, comfort, and neo-liberalist environment offered by the South Pacific Island that speaks to Silicon Valley conservative libertarians; they are also drawn by the countries penchant for fantasy, mythology and a landscape shown off by Peter Jackson's filming of the franchise Lord of the Rings and The Hobbit films that also echoes with them. The co-founder of Napster, and until 2014 the managing partner at Peter Thiel’s Founders Fund, Sean Parker infamously held a Lord of the Rings inspired wedding in 2013 where each guest received a costume that could have made them mistaken for an extra on a Lord of the Rings film set. A country with its own Official Wizard would seem particularly welcoming.
Palantir's Californian headquarters informally known as 'the Shire'. Photograph by Brad Wenner for Fortune
Whether for apocalypse insurance or neo-liberal ideals, the amount of New Zealand land being bought by non-nationals is rising. According to government figures, non-NZ citizens bought more than four times as much land in the first ten months of 2016 as in the whole of the previous year.
Measures have been put into place to ensure that certain of the country’s assets and land are protected and that ‘overseas persons’ are prevented from buying up all of the lakeside properties. The Overseas Investment Act of 2005 requires that an ‘overseas person’ obtain official permission before buying sensitive land or assets. This includes such assets as property or business worth over \$50m, land over 5 hectares, or worth more than \$10m, land on many of New Zealand’s off-shore islands and certain historic or heritage areas. The Overseas Investment Act was the inspiration for Matt Nippert’s initial investigation when he found out about Thiel’s purchase of a multi-million, 193 hectare property on Lake Wanaka in the picturesque Glendhu Bay.
Lake Wanaka, New Zealand, image taken by Flickr user Rosino in 2010
A week earlier on January 30, 2017, Evan Osnos wrote an extensive piece published in the New Yorker Magazine on how the super-rich were preparing for Doomsday and highlighted New Zealand's attractiveness as an ‘end-of-days’ destination. This encouraged Nippert to search through details of property purchases in the New Zealand land records service while searching for key names within Silicon Valley and beyond.
Drawing no results with Thiel’s name, Nippert went on to search for companies owned by Thiel, after compiling a list from the New Zealand’s Companies Office database. One of these companies was a match: Second Star Limited, a company owned by Peter Thiel, had purchased an estate by Lake Wanaka with an estimated value of \$7.8 million. The story Nippert thought he was writing, and the one he was on deadline to file, highlighted the government’s failure in their statutory duty to control overseas property investments of sensitive land. He hoped his story would put pressure on the Overseas Investment Office to openly discuss and investigate that particular land purchase along with prompting a larger debate on the effectiveness of foreign ownership controls currently in place in the country. After requesting a comment from the Overseas Investment Office, he received the phone call that would keep him busy for the next two months.
Less than fifteen minutes after he hung up the phone, Nippert applied for what would become the first of many Official Information Act requests to Internal Affairs requesting Thiel’s citizenship file. There followed an extremely busy 48 hours unearthing revelations that continue to build into a longer, multi-pronged investigation into corporate and government ties.
Having filed his story and submitted his first Information Act request, a number of sources began contacting Nippert to tip him off to the fact that the then Minister of Internal Affairs himself would had to have granted Thiel’s citizenship award. Nippert went on to read the Citizenships Act of 1977, paying special attention to the section that grants the Minister of Internal Affairs the power to override the normal criteria for granting citizenship status in certain circumstances.
While awaiting a response, Nippert checked Companies Office and found no records of Thiel having New Zealand citizenship. Later that same day, on 25 January 2017, he published the well-kept secret that Peter Thiel had been a New Zealand citizen since 2011.
More than 24 hours after the story broke, the government responded confirming Nippert’s suspicion that the “exceptional circumstances” clause had been used to grant Thiel citizenship back in June 2011. Internal Affairs went onto say that the Minister at the time "could not recall the case" and they would not answer any further questions about it unless they were officially requested to do so under the Official Information Act.
Hearing that the Minister could ‘not recall’ the exceptional circumstances behind the actions he had taken to award citizenship, Nippert knew something was amiss and impatiently awaited a reply to the information request he had submitted for Thiel's citizenship file.
As with Freedom of Information legislation across the world, the government in New Zealand have a specific amount of time to respond to any request and will usually wait until the last possible day to reply. Under the Official Information Act of New Zealand, the government has a 20-day window to compile a response to any request.
In the days that followed Nippert’s initial request, news outlets around the world begun covering the story and asking how citizenship criteria can be circumvented, and speculating about the circumstances which would have had to be in place for Peter Thiel to be granted citizenship. Thiel himself had become a newsworthy character due to his connections to the Trump administration as well as his financing of Hulk Hogan's lawsuit which had led to the bankrupting of Gawker Media.
Media platforms focused on the ironic nature of Thiel’s support for Trump’s bid for presidency to ‘Make America Great Again’ - he donated \$1.25m to his campaign and was appointed to his transition team - while at the same time investing in his own alternative Plan B in New Zealand. A headline from Tech Crunch from January 26, 2017 captured this sentiment, 'With New Zealand citizenship, Peter Thiel can watch the world burn in peace.'
New Zealand shares top billing with Norway on Transparency International's 2016 Corruption Perception Index, the United States coming in at number 18. According to New Zealand's immigration authorities, in the first week of Trump's presidency, more than seventeen times the usual number of North American applications for New Zealand citizenship were received, shooting up from 750 to 13,401.
A collection of headlines, top: The New York Times, bottom left: the Financial Times and bottom right: The Guardian.
Thiel’s notoriety was creating waves internationally and locally. For a country that rarely makes global headlines, this international pressure, along with local coverage and government opposition pressure, triggered a flurry of formal Information Requests and media queries.
This increased pressure to release the citizenship file certainly expedited the process and after five working days, the file was released, at 17:10pm, 50 minutes before the 6 o’clock news, on the same day that the General Election was announced. Consequently, TV networks had little time to prepare for the nightly news and print journalists struggled to read the document, process it and produce copy in time for the print deadline for the following morning’s newspapers.
The timing of this release sparked allegations that the release of this information on the same day as the Prime Minster announced the General Election was an attempt to bury the news. Iain Lees-Galloway, a Labour Party MP, tweeted:
— Iain Lees-Galloway (@IainLG) February 1, 2017
The citizenship file
Sifting through the 145-page document, Nippert discovered that German-born Peter Thiel fit none of the criteria for New Zealand citizenship, having visited the country four times and having never expressed an intention to live there on a permanent basis in the future, barring Doomsday. "I am happy to say categorically that I have found no other country that aligns more with my view of the future than New Zealand," Thiel wrote in his application. While maintaining his US citizenship, Thiel was granted New Zealand citizenship in a private ceremony in Santa Monica in the US back in August 2011. The fact that the ceremony was both private and outside of the country is highly unusual.
Within the application Thiel stated that “it would give him great pride to let it be known that he is a New Zealand citizen”. It seems, however, that he didn’t tell many people, if anybody publicly. Summarising a section of his application, Internal Affairs officials said: "He states that being a New Zealand citizen would enable him to represent the country on the international stage and give him greater confidence in mobilising New Zealand's talented entrepreneurs." However no one on the international stage nor in government itself was aware of his third passport, making it difficult for mobilisation of any kind to be undertaken. Finance Minister Steven Joyce told Nippert that senior members of cabinet weren’t even aware of his citizenship until recently.
Thiel’s citizenship was granted under “exceptional circumstances” and they were twofold: his philanthropic donations to the country and his investment in local technology companies.
Thiel, with the backing of Internal Affairs officials, argued that the usual citizenship requirements could be circumvented due to his donation of NZ\$1m to the Christchurch earthquake relief fund coupled with the fact that “his skills as an entrepreneur” would benefit New Zealand. The donation was made during the same period as his citizenship was being considered and Thiel has reportedly made no further monetary donations.
Picking apart these two claims became Nippert’s focus point for the next stage of his investigation.
Zero-to-One Sum Game
The tycoon’s citizenship file was released on February 1, 2017 and over the course of the following week, Nippert filed over a dozen requests under the Official Information Act.
The quick response by the government to Nippert’s first Official Information Act request was not typical and was not replicated for the dozen applications that followed. Nippert’s subsequent requests were responded to by the government at the last possible moment, giving them the maximum 20 days to craft their response.
Under the Official Information Act, much like many other Freedom of Information Laws globally, requests may be declined or heavily redacted based on privacy, confidentiality or national security concerns. While the citizenship file was released with few redactions, a number of Nippert’s following requests were either heavily redacted or not released at all.
Nippert was searching for three things in particular. Was Peter Thiel a unicorn in his successful application to New Zealand or was he the visible tip of the iceberg? What was the exact nature of his role as an investor in local technology companies? And lastly, whether, and to what extent, is Thiel’s big data analytics company Palantir entrenched within local government contracts?
Nathan Guy, the Internal Affairs minister at the time, claimed he could not recall this particular case, implying that Thiel was one of many citizenships granted under the “exceptional circumstances” clause. The New Zealand Herald requested information on exactly how many others had been granted citizenship through this clause. Twenty days later, the documents were released and they received their reply.
Since 2012, 76 similar applications had been filed and every single application was rejected bar one by the Minister. While this information confirmed that New Zealand citizenship was not being sold at market rate, the delay in the receipt of this confirmation was further criticised, and Nippert dug deeper to expose what exactly had made Thiel’s bid for citizenship so attractive.
Heads you lose, tails I win
After being able to concretely state that Thiel was a one-off, exceptional applicant, Nippert begun to hone in on Thiel’s investments in New Zealand tech companies, a central pillar of Thiel’s application. The amount of the investments was redacted, leading Nippert to look more closely at Thiel’s principle local investment with the state-owned New Zealand Venture Investment Fund (NZVIF).
The NZVIF was created to support New Zealand technology companies with start-up and growth capital. Due to its status as a state-owned concern, Nippert was able to request information about its funding and investment arrangements through the Official Information Act. The information which was returned was heavily redacted – due to contract confidentiality. However his next lead was contained within the documents. Thiel’s principle investment was not creating a “better place” for New Zealand; in fact, the arrangement took advantage of a an unusual clause included in their contract that actually cost the New Zealand taxpayers and resulted in Thiel gaining over twenty million New Zealand dollars.
In early 2011, Thiel’s Valar Ventures approached the NZVIF to partner up in the launching of a new \$40 million venture capital fund. Valar Ventures invested \$15 million, the NZVIF invested \$20 million and private New Zealand investors made up the remaining \$5 million and`the fund came into effect in 2012. This fund included an option that enabled investors to buy shares cheaply if the investment performed well but share losses equally if it failed. This buyback option had been a standard feature of the NZVIF since 2002 but had never been used until 2015, when Valar Ventures triggered the clause.
The partnership ended quietly after Thiel initiated a buyback option that allowed him, along with his private partners, to claim all the profits from the revenue earned by cheaply buying out NZVIF. This netted Valar Ventures at least \$23 million dollars on top of his initial investment while the NZVIF struggled to break even.
Nippert contacted a Wall Street analyst and showed him the NZVIF deal, highlighting this costly clause. The analyst told him, "If a professional investor signed this deal, they would be the butt of their colleagues' jokes all the way out the door. This is a clear 'heads I double win, tails I lose', 'heads the taxpayer loses, and tails the taxpayer loses' proposition, and a very savvy deal for Thiel.”
A reply to a further Official Information Act request - this time concerning the New Zealand Venture Investment Fund - showed that this deal had been a matter of concern for some time, with the key players keeping it quiet. The NZVIF has since been advised to remove this clause and has not used it in their contracts since 2015.
A further claim contained within his application was the statement that Thiel intended to be "dedicated exclusively to funding and aiding New Zealand technology companies". However Valar Ventures appears to have invested in only one new local company, retail management software company Vend, and their company website states: "The firm seeks to invest outside of United States, focusing on Brazil.”
Like his Christchurch earthquake donation, Thiel’s initial interactions with the NZVIF in early 2011 was timed to coincide with his citizenship being considered. The NZVIF were unaware of his application for citizenship. This ‘sweetheart deal’ became a front-page story for the New Zealand Herald on February 4, 2017. It prompted further claims to the effect that not only was this a terrible deal for New Zealand taxpayers but it further reduced the rationale for Thiel’s citizenship award.
One software to rule them all
Thiel’s data analysis company is called Palantir Technologies - a nod to J. R. R. Tolkien's magical artifact, translated to mean 'Farsighted' or sometimes 'Seeing Stone' as brought to life in Tolkien’s Lord of the Rings, (filmed in New Zealand).
This model of Palantir’s head office, created for The Glass Room exhibition, based on photographs taken by Peter DaSilva for The New York Times in 2014, shows the world map on the wall of the meeting room is based on the strategy board game “Risk: The Game of Global Domination”.
Palantir is a company renowned for its relationships with the CIA, the FBI, and the NSA, and was the next port of call for Nippert. He wanted to understand whether there was any connection between Palantir and Thiel’s citizenship, and how much, if any, this connection played in enabling Thiel’s citizenship.
Nippert knew that three departments within the New Zealand government were using Thiel's software: the New Zealand Defence Forces; the Government Communications Security Bureau and the New Zealand Security Intelligence Service. Tactically, he requested information from ten departments about what software they used feeling certain he would get a firm ‘no’ in response. Wanting this on record, he did indeed receive ten ‘no's’ with national security being cited as a reason for the rejection of his application. Nippert welcomed the push-back on this request as it allowed him to flag the deals as "secret".
Matt Nippert also used googleDorking to further his investigation on links between Palantir and the government. By typing in a few queries into a few search operators, he gathered evidence of the three agencies' use of Palantir and used this as evidence to ask those three departments to reconsider their refusal and release the information. One of the three departments, the New Zealand Defence Forces, caved immediately, and released information confirming that they had indeed been contracting Palantir since 2012 and had trained 100 staff in its use.
The New Zealand government strongly rejected claims that commercial ties between New Zealand security services and Palantir Technologies played any role in the granting of Thiel’s citizenship. All three agencies declined to reveal how much they spent with Palantir.
Nippert will have his complaint heard by the Ombudsman in the coming months as he intends to convince the judge that these departments have already disclosed these secrets, through the evidence Nippert found through googleDorking, and hopes that they will reconsider their decision.
At the time of publication, Peter Thiel is yet to comment on why he wanted to supplement his German and US citizenships with a New Zealand citizenship. Whether for monetary reasons, a deep affinity for the country, or as a Plan B for the end of the world, Matt Nippert and his colleagues plan to continue investigating these dealings and to continue questioning his motives. As Nippert said during our email exchange, "This stuff isn't rocket science: I rely almost totally on public information, albeit much of it is fragments that have to be pieced together to understand the bigger picture."
At Exposing the Invisible, we are producing guides and how-tos on the tools and tactics of finding, analysing, and using publicly available information. Many of the approaches taken by Nippert can be replicated by those wanting answers who are willing to dig around to find them, from googleDorking (see our guide here), searching through company databases, to understanding how Freedom of Information requests work (see our interview on this with Lydia Medland here).