I ran into this today and the problem turned out to be /tmp:

# ls -ld /tmp
drwxrwxr-x 11 ubuntu ubuntu 4096 Aug 24 00:23 /tmp

This fixed it:

# chown root:root /tmp
# chmod 1777 /tmp

I don't know how /tmp got in that state on my server (it's a fairly
fresh install of 16.04) but perhaps that's the underlying problem for
other people too.

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https://bugs.launchpad.net/bugs/1583102

Title:
  Could not execute 'apt-key' to verify signature (is gnupg installed?)

Status in apt package in Ubuntu:
  Confirmed

Bug description:
  After upgrading to 16.04 I'm getting this error for all my apt
  sources.

  This seems different to both
  https://bugs.launchpad.net/ubuntu/+source/apt/+bug/1524196 (since I
  don't get the "Couldn't create tempfiles for splitting up
  /var/lib/apt/lists/archive.ubuntu.com_ubuntu_dists_xenial-
  updates_InRelease" errors) and
  https://bugs.launchpad.net/ubuntu/+source/apt/+bug/1577926 (since apt-
  key run by itself fails too).

  Downgrading to apt=1.0.10.2ubuntu2 fixed the problem so it seems to be
  related to recent changes in apt.

  Thanks!

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