In my opinion, its "its", not "it's."
Just an observation. My reference is the Bible.
Oh, yeah.. that whole Nixon thing, or was it a New Zealand thing?
Have a look at my post number 3, and read each link from the top - they are in chronological order.
The sequence goes like this: the former Police Commissioner of the New Zealand Police force, Peter Doone, stepped down in 2000 after an incident that damaged his reputation. It emerged that he was defamed by a mysterious "public figure" providing leaks to the public, and these leaks were afbricated. It now emerges the that "public figure" is the Labour (leftist) Prime Minister Helen Clark herself and she is now declaring by definition she cannot do anything illegal.
This could be the event that topples Labour later this year.
And I think "it's" is correct since in this context it is a contraction of "it is" rather than a possessive pronoun. From my school English grammar lessons.