Peter Thiel’s secret New Zealand citizenship sparks backlash

Peter Thiel
Kim Kulish | Corbis | Getty Images
Peter Thiel

He enraged Silicon Valley's liberal elite by supporting Donald Trump and funding a lawsuit that led to the demise of news site Gawker. Now Peter Thiel, PayPal co-founder, is stoking controversy in New Zealand, where the government is under fire for granting him citizenship despite his case not meeting the usual requirements.

On Wednesday, Wellington published a 145-page file on Mr Thiel's citizenship application in an attempt to address controversy over the decision to grant it secretly in 2011. The file shows the 49-year-old technology entrepreneur's application success was the result of an "exceptional circumstances" clause that enables New Zealand's minister for internal affairs to waive residency rules if it is deemed in the public interest.

"People are deeply uncomfortable with this," Iain Lees-Galloway, a Labor MP and opposition spokesman on immigration, told the Financial Times. "This was all done behind closed doors and most New Zealanders don't think it is appropriate to offer citizenship for money or as some sort of insurance policy in a turbulent world."

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The file shows Mr Thiel's citizenship was granted on the basis of factors including his commitment to apply his entrepreneurial skills in New Zealand, the setting up of a venture capital fund and a philanthropic donation of NZ$1m (US$730,000) to earthquake recovery in Christchurch.

In a letter accompanying his application to Nathan Guy, then minister for internal affairs, Mr Thiel wrote that it would give him "great pride" to let it be known he is a New Zealand citizen and an enthusiastic supporter of the country and its emerging high-tech industry.

"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," he wrote.

Despite Mr Thiel's professed enthusiasm, his citizenship only came to light last month when a journalist at the New Zealand Herald reported on the businessman's NZ $14.5m purchase of a 193-hectare estate on Lake Wanaka — a sensitive area where foreigners typically require government approval to buy land.

Mr Thiel, who was born in Germany but is a US citizen, donated US$1.25m to Donald Trump's campaign and is an adviser to a president who called for "total allegiance" to the US in his inaugural address.

Under the normal process of applying for New Zealand citizenship, applicants must spend about 70 per cent of their time living in the country over a five-year period. They should also reside in the country for a period thereafter.

"New Zealanders of all ages highly value egalitarianism and so there is growing unease across the political spectrum about immigration of very wealthy individuals, especially if they are seen to get special consideration." -Bronwyn Hayward, University of Canterbury politics department head

The files released by the Department of Internal Affairs show just 92 people have been granted citizenship in exceptional circumstances over the past five years.

The controversy comes amid growing fears in New Zealand about the purchase of farmland and houses by foreigners, which is pushing up prices and causing concerns about housing affordability. Analysts say it has also jarred in a country that prides itself as a "classless society".

"New Zealanders of all ages highly value egalitarianism and so there is growing unease across the political spectrum about immigration of very wealthy individuals, especially if they are seen to get special consideration," said Bronwyn Hayward, head of the politics department at the University of Canterbury.

Mr Thiel has not commented on why he wanted to become a New Zealand citizen. He is an investor in several New Zealand companies, including Xero, an accounting software company. But a recent article in the New Yorker magazine noted New Zealand has become a location of choice for wealthy Americans preparing for a doomsday scenario.

"There is a flight to safety going on," says Graham Wall, the Auckland real estate agent, who sold the Lake Wanaka property to Mr Thiel.

However, he says most of his foreign clients want a safe investment location rather than a bolthole in case of the breakdown of civilisation.

"We deal with wealthy American, English and Australian buyers," he says. "They see New Zealand as a place with good regulation, good laws and a stable investment climate."