Stuff reports:

ACC Minister Judith Collins has promised to quit if she or her office is found to have leaked an email at the centre of a spat over an ACC claimant as the auditor-general launches an investigation into governance at the state insurer.

So will Mallard and Little resign if their allegations it was Collins are found to be untrue?

Mr Little, along with Green MP Kevin Hague, earlier asked Auditor-General Lyn Provost to look into aspects of ACC’s governance that would not be examined by the investigations already under way by the privacy commissioner and being considered by the police.

Ms Provost said yesterday she would hold an inquiry examining aspects of ACC’s governance.

“The inquiry will examine how ACC manages a range of risks at the board level of the organisation. It will also examine how any matters relating to ACC claimant Ms Pullar that came to the attention of the board or individual board members were dealt with,” she said.

As well as this inquiry, Ms Provost intended to develop an audit proposal on ACC’s general operations, with a focus on its case management.

I’m pleased the Auditor-General is investigating.

Tags: ACC, Andrew Little, Auditor-General, Judith Collins, Trevor Mallard

Matthew Dearnaley in the NZ Herald reports:

Prime Minister John Key says he supports a proposed inquiry into a donation by a Manukau trust to Auckland Mayor Len Brown’s election campaign.

Mr Key yesterday said he supported the view of Local Government Minister Rodney Hide “that it may be appropriate for the Auditor-General to look at the nature of whether the entity that actually gave [Mr Brown] a donation is capable of doing so or whether it’s within their rules to do so”.

He was referring to a donation of billboard space worth $3375 from the Counties Manukau Pacific Trust, which runs the TelstraClear Pacific Events Centre.

One issue for the Auditor-General might be whether the value of the space is correctly recorded. I know of no billboard space in Auckland that goes for $1,000/mth. $2,000/mth is pretty much the minimum for an average billboard, and my understanding is the size and prominence of the trust billboard is such that the commercial value would be at least $3,000 + GST a month.

So if the billboard was up for three months, then the value of the donation and associated expense should be $10,125.

If the billboard was up for more than three months, then the associated expense for the Brown campaign would remain at $10,125 (as only last three months count), but the donation value would be even great – would be $20,250 if it was for six months.

So these two facts need to be established – the commercial value of the billboard space, and the length of time the billboard was up.

“We are a community charitable trust,” he said. Trust chairman Sir Noel Robinson said no costs were incurred or revenue lost by providing Mr Brown’s campaign with billboard space, which his board had made a decision to provide free to any mayoral candidate who approached it.

This is spin of the highest order. The trust CEO is on the Len Brown campaign team, along with two trustees and possibly a senior trust employee. And you expect us to believe that they would have stuck up John Banks billboards if asked.

The Auditor-General should ask for a copy of the board minutes where this decision was allegedly made.

Even if they made such a decision, it was obviously to give the illusion of political neutrality. Unless they actually wrote to all the other mayoral candidates advising them of the availability of the billboard space, how could they possibly expect another candidate to know that they could ask to use their space.

Mr Brown said yesterday that he was unconcerned about Mr Hide’s intention to ask Ms Provost to look into the trust’s donation.

Excellent. Let the facts be discovered.

Tags: Auckland Council, Auditor-General, Counties Manukau Pacific Trust, John Key, Len Brown, Noel Robinson, Richard Jeffrey, Rodney Hide

Whale Oil blogs:

Some time ago I sent an OIA request to the Auditor-General for all of their credit card expenses. They ini­tially refused because the Auditor-General is not sub­ject to the OIA.

They have now recon­sid­ered and accord­ingly pro­vided the infor­ma­tion that I requested.

Voluntary compliance with a request, when there is no statutory obligation to do so is great leadership.

Every instance of expense is detailed with who was there and what it was about. Even park­ing dock­ets are fully explained. Com­pare that to Len Brown’s still secret Volare dinner.

Talking of which, has the Ombudsman made a decision yet?

Lyn Provost is the epit­ome of fis­cal rec­ti­tude. She flew Pacific Blue to Port Moresby which is pig of a flight at the best of times and one that no one would be-grudge a busi­ness class fare and/or a Groser/McCully style truck load of piss to soothe the nerves for that flight. But our cheap and fru­gal Auditor-General flew Pacific Blue and bought two sets of sand­wiches, cook­ies and an iced tea for a total of $28.20. That’s a bar­gain no mat­ter how much they charge for an iced tea on Pacific Blue. She even stayed in a dive of a hotel. That’s tak­ing one for the team in any­ones book. …

On the 26^th of March 2010 there is an amount of $3 for short term park­ing, this was when her fam­ily came to pick her up at the air­port instead of billing it to Cor­po­rate Cabs for a hundy. She fre­quently gets peo­ple to pick her up from air­ports instead of bill the tax­payer for cab fares.

She is tighter than a fish’s arse and that’s water­proof. Lyn Provost, civil ser­vant, I dub thee The Queen of Mean.

Most recipients of a nickname from Whale Oil are not that happy about it, but in this case I think the Auditor-General will be happy with it.

More seriously, it is great to see the AG aware of the moral leadership role of her office. It is a million years removed from the days of Jeff Chapman, who was actually convicted for fraud.

Tags: Auditor-General, Lyn Provost, Whale Oil

The Auditor-General has published her 20 page report into spending from Phil Heatley’s Ministerial Office.

We found that a total of $1,402 of Mr Heatley’s expenditure – $608 in Vote Ministerial Services and $794 in Vote Parliamentary Service – was outside the rules. In all cases, Mr Heatley thought that the expenditure was within the rules, but he did not understand the rules correctly. In the case of the expenditure in Vote Parliamentary Service, the Parliamentary Service was also administering a rule incorrectly for members of Parliament, and Mr Heatley is not the only member who will have been affected.

That is significant. There may be a few more reimbursements to come.

We found that Mr Heatley generally took care to account for his expenditure appropriately. His Senior Private Secretary took her responsibilities seriously in managing the ministerial office expenditure. On occasion, Mr Heatley’s ministerial office received a reminder from Ministerial Services to submit a late reconciliation of his expenses or invoices or receipts; these were standard reminders that are sent by Ministerial Services to many ministerial offices. The problematic expenditure that we discuss in this report was approved by the relevant officials and was never queried with Mr Heatley or his Senior Private Secretary. For some items of expenditure, it was not clear from the supporting documentation provided that it was outside the
rules, but it was for others.

As in the UK, there has been a culture of parliamentary officials not questioning claims.

We accept that the expenditure outside the rules was not deliberate on the part of Mr Heatley or his ministerial office, and that he had repaid a sum of money before we started our inquiry. He has also personally paid for expenses that are allowed under the rules.

And to be fair to MPs, many of them pay for stuff they could claim, but do not bother to.

Heatley has repaid $2,852, and the AG has ruled that only $1,402 was outside the rules. But

Notwithstanding deficiencies in rules or the systems for administering them, everyone spending public money – in this case Mr Heatley – has a personal responsibility to manage their expenditure appropriately with good judgement. In our view, even though Mr Heatley was sometimes operating under an incorrect understanding of the rules – for example, when his wife and family accompanied him on ministerial business – a more conservative approach that took greater account of how others might perceive his use of public money would have served him better.

I think that is a fair point.

They found five instances of spending outside the rules:

1. $287 out of $929 spent travelling to Auckland And Queenstown accompanied by family
2. $251 out of $2,677 spent travelling to Picton and Kaikoura
3. $70 for wine out of $425 spent attending the National Party Conference
4. $692 for a child’s travel between Wgtn and Queenstown
5. $102 for a child’s train and ferry travel between Wellington and Kaikoura

This is a total of $1,402. Note a total of $2,852 has been repaid.

The OAG has clarified that a spouse’s meal and accommodation expenses should only be paid for, if they are attending official functions or meetings with the Minister, but not if they are just accompanying him. This soudns reasonable to me.

For the National Party conference, they ruled that accommodation and meal costs are legitimate expenses as that is part of the parliamentary role of an MP. There was no need to refund the meal. The wine explanation is:

He later wrote “food and beverage” on the eftpos receipt. This was his usual practice when it was not lunch or dinner – it was not necessarily a payment for food and beverage; merely his way of categorising food and beverage-related costs that were not technically lunch or dinner. His Senior Private Secretary assumed that the costs were for dinner and wrote “Minister and spouse – dinner” on the credit card reconciliation form. Mr Heatley certified this form as the card-holder. His Senior Private Secretary told us that there was no intention to misrepresent the situation on the reconciliation form – she had assumed that it was for dinner from what he had written and she did not check it with him. Mr Heatley told us that hedid not read the form carefully before he signed it and that it was a careless rather than dishonest act. …

From our review of Mr Heatley’s expenditure documentation, we can confirm his practice of categorising expenditure on his receipts as “food and beverage” when they were only for beverages such as coffee. However, in our view, Mr Heatley should have taken greater care in ensuring that the description of his expenditure was accurate.

The conclusion seems to be the description was inaccurate but not designed to be misleading.

As for the wine itself:

In our view, the two bottles of wine that Mr Heatley purchased for his table were more in the nature of entertainment costs incurred in the course of parliamentary business. We therefore concluded that the cost of the wine should not have been charged to Vote Ministerial Services. It would have been better to regard it as covered by the expense allowance.

Again I think this is a reasonable approach. This is partly what the expense allowance is for.

Notwithstanding deficiencies in rules or the systems for administering them, everyone spending public money – in this case, Mr Heatley – has a personal responsibility to manage their expenditure appropriately with good judgement. In our view, even though Mr Heatley was operating under an incorrect understanding of the rules when his wife and family accompanied him on ministerial business, a more conservative approach that took greater account of how others might perceive his use of public money would have served him better.

And that sentence is why it is unlikely, in my opinion, Phil will return to Cabinet immediately, or indeed probably this term.

UPDATE: I was wrong. Phil has been reappointed. While I am pleased for him personally, I actually think it is the wrong decision. The thing people hated about Labour was the revolving door nature of Ministerial stand downs.

Tags: Auditor-General, Ministerial Services, MPs expenses, Phil Heatley

Th Auditor-General has just ruled that four members of the Canterbury regional Council illegally voted on a resolution that affected them financially (more than normal members of the public).

The report is very interesting for those who deal with conflicts of interests, and doesn’t reflect well on the Councillors. They are somewhat lucky that the AG decided not to prosecute on this occasion.

Tags: Auditor-General, Canterbury Regional Council, conflicts of interest

Am reading full report. The summary says:

The current parliamentary system is designed to establish whether a member of Parliament (MP) maintains a current residence (other than a holiday home) outside Wellington rather than to decide where an MP “lives” in an everyday sense. Traditionally, that residence was in the MP’s electorate.

Yes, this is the essence of it.

Mr English correctly completed the declarations he was required to as an MP, and provided other information on his accommodation arrangements, in order to claim Wellington accommodation costs.

And:

For at least 15 years, the parliamentary rules for claiming accommodation costs have specifically provided for MPs to claim their costs when they buy or rent a property in Wellington. This has enabled a range of practices to arise, including renting from family trusts. The administrative system now includes protections such as a market evaluation of rent and a cap on the total that can be claimed to manage the associated risks. The fact that Mr English was being reimbursed for the cost of renting a house owned by his family trust was not exceptional.

So there is now no doubt that Bill retained eligibility for Wellington accommodation assistance over the years 2000 – 2008.

There is an issue over the Ministerial assistance:

Ministerial Services asked Mr English to sign a declaration that he did not have a pecuniary interest in the family trust. He did so, and attached a copy of the advice he had received about what amounted to a beneficial interest in a trust for the purposes of Standing Orders. Having received that declaration, Ministerial Services got a market evaluation of the rent, took over the existing rental agreement, and provided the house as a ministerial residence.

In our view, the advice that Mr English relied on to make his declaration was not applicable to this situation and was based on too narrow a test for the Ministerial Services’ situation. We consider that Mr English does have an indirect financial interest in the trust.

This issue arose because of Ministerial Services’ evolving practice of renting properties for Ministers combined with the parliamentary rules that enable MPs to rent from family trusts or similar. The two systems do not fit well together.

At Mr English’s request, the rental agreement between Ministerial Services and the trust has now ended. Mr English has reimbursed the rent and other costs that had been paid.

What this basically says is the advice that the house could be leased as a Ministerial House was not correct. This means however that he would still be eligible for the normal parliamentary level assistance of $24,000 a year – however he has confirmed he will not be taking up any assistance.

This reinforces my position that it is much better if MPs do not directly on indirectly own the house they get assistance for. If Bill had moved into Vogel House, or Bolton Street, these issues would haver have occurred I suspect.

The Prime Minister has announced that a new policy is being implemented under which Ministerial Services will no longer provide accommodation directly for Ministers. Instead, Ministerial Services will simply provide a fixed level of financial assistance to Ministers, who will make their own accommodation arrangements. This approach will mean that the question of whether a Minister has a personal financial interest in a property will no longer be relevant, and may help to smooth the interface between the parliamentary and ministerial accommodation entitlements systems.

The news system does sort out any conflict of interest issues.

UPDATE: The full report has more details on the trust issue, and where the advice came from:

He sought advice from the Registrar of the Pecuniary Interests of Members of Parliament on what amounted to a pecuniary interest in a family trust. The Registrar responded with advice that discussed generally what is a beneficial interest in a trust for the purposes of the Standing Orders requirements. …

The Registrar’s advice was based on the definition in Standing Orders of when a beneficial interest in a trust should be declared for the Register of the Pecuniary Interests of Members of Parliament. We have concluded that this was not the right test to apply in this situation, as it is a narrow definition of pecuniary interest for a particular purpose. In general, it is usual to regard an interest held by a spouse or close family member (such as a dependent child) as creating an indirect financial interest. In our view, Mr English has an indirect financial interest in his family trust, because of his relationship with the likely beneficiaries.

So he sought advice from the Registrar for Pecuniary Interests, but that advice was not applicable to the accommodation issue.

The result was that the Crown was renting a property for Mr English from a trust in which he had an interest, and the arrangement was explicitly based on a view that he did not have an interest. Clearly, this was unfortunate. We emphasise that the Minister’s declaration was based on advice. However, in our view, the advice was not directly relevant to this situation. We consider that Ministerial Services should have raised this with the Minister.

Again this is my point about both Bill’s situation, and the Greens Super Fund. Even an indirect relationship is undesirable.

This issue illustrates the different starting points of the two accommodation entitlement systems and that they do not fit well together. Having an interest in a property is not a barrier in the parliamentary system, and protections are in place to manage the risks created by the conflict of interest. The issue has only arisen in the ministerial system because Ministerial Services has moved to rent properties rather than own them and has worked to tailor the housing support it provides to the needs of individual Ministers, including sometimes taking over existing rental arrangements.

The upshot is that the owning the home through your trust was okay for parliamentary rules, but not for Ministerial rules. This really shows why the the two systems need to be streamlined.

Tags: Auditor-General, Bill English, MPs expenses

John Armstrong writes in the Weekend Herald:

The time has come for Bill “Double Dipton” English to end the charade.

It has been apparent for a while that it is no longer tenable for him to stipulate his primary place of residence as being in his Clutha-Southland electorate when his real home has long been in Wellington.

I’m a bit surprised by the timing of this, as the Auditor-General is now making inquiries and presumably in time will advise whether or not Bill English has followed the rules correctly.

His highly questionable claim to be an out-of-Wellington MP – a status which made him eligible for an accommodation allowance while in Opposition and which entitles him to taxpayer-funded ministerial accommodation now he is in Government – has become unsustainable in purely political terms.

Of course there is a wider perception issue that goes beyond the rules. But I’m wary of the precedent that gets set if you punish MPs for having a family, and even worse punish them because they chose *at their own expense* to have some of their family live in Wellington with them while they are an MP.

English’s predicament has in part come about because of public expectation that MPs should reside in their electorates. That many don’t will come as a shock to many people. Those who don’t live in their electorates thus feel they have to perpetuate a fiction that they do, especially in large rural seats like English’s which feel isolated from and neglected by Wellington.

I doubt there were many people in Clutha-Southland who were unaware that during most of the year, Bill is in Wellington and his family are also. It was never a secret.

But this is not a new issue, and in fact one that the Electoral Act has been quite explicit about since at least 1956. First we have s 72(6)(b):

The place where, for the purposes of this Act, a person resides shall not change by reason only of the fact that the person is absent from that place for any period because of his or her service or that of his or her spouse, civil union partner, or de facto partner as a member of Parliament

Now this is for the purposes of electoral enrolment, but it shows that long long ago it was recognised that MPs would be forced by their job to reside outside their normal home, and that it was undesirable for this temporary relocation to be deemed a change of primary residence.

We also have s72(10)(a):

In the case of a person who is appointed to be a member of the Executive Council, or who is the spouse, civil union partner, or de facto partner of any person so appointed, the following provisions shall apply notwithstanding anything to the contrary in this section, namely so long as he or she holds that office he or she shall be deemed to continue to reside at the place of residence in respect of which he or she was registered as an elector of an electoral district (in this subsection referred to as the original district), notwithstanding his or her absence therefrom at the seat of Government or otherwise, unless and until he or she duly applies for registration as an elector of another electoral district of which he or she is, apart from the provisions of this paragraph, qualified to be an elector.

This is why both Bill and Mary English (the media have incorrectly reported she is enrolled in Wellington – she is enrolled in Clutha-Southland) are residents of Clutha-Southland for electoral purposes.

Now the electoral district enrolment is not the only test for primary residence. The Auditor-General in 2001 laid out a series of factors. Now these are not black and white in that you must tick 11/11 or 9/11 to be deemed to live in Place A or Place B. Ultimately the Speaker decides on the totality of the factors. They are:

(a) the extent of the MP’s parliamentary duties, and the amount of non-parliamentary time available to the MP to return “home”;

It takes around ten hours return (five hours each way) to get from Parliament to Dipton. And in the last decade English has held senior roles in Government and Opposition with duties around the country. I doubt there is much dispute on this factor that he has little time to return to Dipton, even if his family had stayed there.

(b) the locations where the MP spends most of that nonparliamentary time;

During most of the year it is Wellington, but during the summer break it is Dipton, as I understand it.

(c) the locations where the MP’s current spouse or partner and family live, and where other dependent family members usually live (including where they spend most time, work, or attend school);

And this is clearly Wellington.

(d) the person in whose name (whether the MP, the MP’s spouse or partner, or some other individual or legal entity) each property is owned or rented, and the utilities (e.g., electricity, telephone) are supplied;

I’m not sure but think the Dipton property is in Bill’s name and the Wellington property in the name of the Endeavour Trust.

(e) the level of the MP’s financial commitment to meeting the financial outgoings on each residence, including property maintenance;

Same for both I guess.

(f) the type of accommodation available to the MP at each residence (e.g., boarding, flatting, or full occupation), and who else lives there (other than the MP’s family);

Both are fully available.

(g) the availability of each residence for use by the MP at any time (e.g., whether it is rented out in periods of absence);

As far as I know Dipton is not rented out, during periods of absence. This is a key factor in my eyes. The provision of accommodation in Wellington is designed so that an MP is no better or worse off. If you were renting out your electorate home, then you would be gaining money.

(h) the nature and extent of the MP’s ties to each local community in which he or she has a residence;

I have little doubt Bill will have stronger ties to Dipton than Karori.

(i) the residence where the MP intends or expects to live should he or she cease to be an MP;

Bill has said he will return to Dipton when he is no longer an MP.

(j) the residence where the MP and members of his or her family are registered for electoral purposes; and

Bill and Mary are registered in Clutha-Southland. The children of voting age are enrolled in Wellington Central – as required by law.

(k) for electorate MPs, the location of the electorate.

Which is Clutha-Southland.

Now as I said there is a degree of subjectivity involved, as it is not just a case of ticking all 11 boxes one way or another. You can reasonable argue the merits.

This is why I think it is absolutely correct the Auditor-General is investigating. This is not a bad thing. This is a desirable thing.

Now John Armstrong is right that there is a wider issue of perception, and political judgements have to be made with that in mind. But personally I think it would be desirable to wait for the Auditor-General to report back before rushing to any decisions.

Tags: Auditor-General, Bill English, John Armstrong, MPs expenses

The Dom-Post reports:

Deputy Prime Minister Bill English’s use of his taxpayer-funded accommodation allowance is to come under scrutiny from the auditor-general.

Following a complaint fro Progressive MP Jim Anderton to Auditor-General Lyn Provost about the finance minister claiming out-of-town accommodation expenses, the Office of the Auditor-General confirmed today it would make “preliminary inquiries”.

I’m delighted the Auditor-General has agreed to investigate. It is entirely appropriate she does so as questions of propriety have been raised.

I actually think the Auditor-General should have been asked to investigate much earlier on. In fact it would have been smart politics for Bill English himself to have asked them to investigate a month or so ago.

Tags: Auditor-General, Bill English, MPs expenses

No Minister has a copy of a letter to the Auditor-General asking them to investigate the extra funding Jim Anderton gets (both personally and for expenses) by purporting to be the leader of a political party.

Sadly it will not be successful. Standing Order 34(1) is clear:

Every party in whose interest a member was elected at the preceding general election or at any subsequent by-election is entitled to be recognised as a party for parliamentary purposes.

So under the rules of Parliament, Anderton is entitled to still be seen as a Progressive MP (and Leader) even though he has announced they will not stand a party list in 2011, and has endorsed Labour and encouraged all his members to join Labour.

But as with Bill English and his housing situation, it is not just about the “entitlement”, it is about the perception and Anderton fails on the perception front. He gets an extra $13,500 a year salary and no doubt an extra $2,700 a year superannuation. And his office gets an extra $100,000 a year budget. Total extra cost to the taxpayer over three years is $348,600.

Tags: Auditor-General, Jim Anderton, No Minister

No Right Turn says:

Back in 2006, the (then-Labour) government passed the Appropriation (Parliamentary Expenditure Validation) Bill, which retrospectively validated Parliamentary Services expenditure in the wake of a nonsensical, retrospective reinterpretation by the Auditor-General. The rabids in the sewer (and some supposedly outside it) preached revolution.

Today, the (now-National) government introduced the Appropriation (2007/08 Financial Review) Bill, which among other things retrospectively validates various items of unapproved, unappropriated expenditure.

Will we see the same outpouring of outrage from the sewer, or will they finally admit that such retrospective validations are standard procedure and happen almost every year? Hmmm, I wonder…

This is one of the more desperate rewritings of history.  Yes validations are common place, but Idiot/Savant deliberately overlooks the vast differences with this one.

Also he continues to smear and lie about the Auditor-General. The Auditor-General warned parties before the 2005 election about their spending. They ignored him. The opinion of the Auditor-General was backed up by the Solictor-General. And what was truly despeciable is that the Government and certain scyophantic supporters attacked the Auditor-General time and time again claiming he was wrong – and then they went and passed a law which killed off a law suit that would have resulted in a Court deciding if he was right or not.

It is bad enough to attack an Independent Officer if Parliament for doing their job, but to attack them and to support a law change that would stop a court case over whether they are correct is disgusting.

As for the other issue of validation, here are what made this case different:

1. The MPs voting for validation had personally gained (in a political sense) from the illegal expenditure. They were not disinterested participants. This is totally different to a minor breach by some junior official in a department.
2. Not all parties had agreed to pay the money back, and in the case of NZ First never paid it back.
3. The MPs voted down an amendment that would have allowed the Darnton vs Clark lawsuit to continue, so that a court ruling could have been obtained on whether or not the pledge card was illegal.
4. The MPs who voted to validate kept claiming the expenditure was legal and like Idiot/Savant attacked the Auditor-General, rather than accept the ruling.
5. The Auditor-General had explicitly warned MPs before the election about their expenditure, and they ignored his advice

Tags: Auditor-General, No Right Turn, pledge card

The Auditor General’s report into how the Corrections Department manages parole is a shocker:

My staff looked at how the Department managed offenders released on parole. We chose 100 offender case files in the four areas we visited to assess whether probation officers and other staff were managing offenders in keeping with the Department’s requirements. We deliberately included 52 offenders considered to pose a high risk to the public.

In most of those 100 case files, the Department had not followed one or more of its own sentence management requirements. Five of the requirements that my staff checked are the most important, in my view, for keeping the public safe, and one or more of these five requirements had not been followed in most of the 100 cases. There were several cases, some of which I have included in my report, where the Department had not completed important sentence management requirements at each stage of an offender’s parole, and we concluded that the Department was not managing these cases adequately.

They are damning words, coming from the Auditor-General. Equally damning was the response of Minister Judith Collins:

Corrections Minister Judith Collins today asked the State Services Commissioner to establish who is accountable for serious failings identified by the Auditor-General’s report into the management of offenders on parole. …

“I have today asked the State Services Commissioner to work with Corrections Chief Executive Barry Matthews to establish who is accountable for the deficiencies identified in the report and what should be done to restore public confidence.”

Ms Collins has asked the Commissioner to report back within 10 working days.

This is about as subtle as John Cleese. I mean you do not need to run a competition to guess who the State Services Commissioner will find is responsible for management failings in the Department. This must qualify as the most unsubtle ever request to SSC to remove a CEO. But not wihout considerable merit – the OAG report is damning, and the mistakes in this area do and have cost lives.

The Herald reports that Corrections CEO faces the axe:

Barry Matthews’ future as head of Corrections is in serious question, after his Minister Judith Collins pointedly refused to express confidence in him yesterday. …

Ms Collins would say only: “I have confidence Mr Matthews understands exactly just how seriously I am viewing this issue.”

Again, you don’t exactly need a PhD in Politics to read between the lines here.

John Armstrong comments:

Wielding a calculated, but ruthless combination of raw power and tactical guile, Corrections Minister Judith “Crusher” Collins has torn up the public service rulebook and effectively engineered the sacking of her departmental chief executive.

Technically, she cannot fire Barry Matthews, the long-suffering head of the problem-plagued Corrections Department. But “technically” is not a word in this Collins’ dictionary.

Indeed.

But regardless of this, Matthews’ resignation letter should have been on the desk of State Services Commissioner Iain Rennie yesterday, so damning was the Auditor-General’s report on Corrections’ management of its parole responsibilities. …

The report shows the department failing to follow its own procedures in monitoring potentially dangerous prisoners on parole – procedures tightened after the murder of Lower Hutt father-of-two Karl Kuchenbecker by Graeme Burton in January 2007.

This is the scary thing. The audit was done after the Burton fiasco, and was meant to measure the new improved processes in place.

Tags: Auditor-General, Barry Matthews, Corrections, Judith Collins, parole

NZ First never paid back the $140,000 + GST it owed the taxpayer.  We know this.

But a reader has reminded me that United Future also still owed some money. In the 2006/07 year they paid back only $31,000 o fthe $64,000 they owed (morally) the Parliamentary Service.

As far as I can tell from their annual report, no repayments were made in 2007/08 but there is a $3,000 other revenue line which might be a repayment.

So how much of the debt has been paid, and when will it be paid in full?

Tags: Auditor-General, United Future

Toad from the Greens has an insightful piece as to why the centre-left lost power:

1. The Taito Phillip Field Affair Allegations of misconduct against Field had been simmering since just before the 2005 election. Instead of implementing a proper investigation with the teeth to interview witnesses under oath, Clark implemented an Claytons inquiry that was widely perceived as a whitewash designed to clear Field. Then despite further very serious allegations, Field was retained in the Labour Caucus right through to February 2007, creating a perception of tolerance of impropriety and possible corruption.
   
   Dead right. It was a disgrace, and even after the Ingram report they defended Field with Cullen saying he was just working harder for his constituents than National MPs did. Richard Prebble showed the correct way to respond to allegations of corruption around an MP – Helen Clark did the opposite.
2. The pledge card Labour’s handling of the pledge card and the Auditor-General’s report was appalling. The should have simply admitted “we got it wrong, and we’ll pay the money back” (as the Greens did). Instead, they allowed the pledge card affair to drag on interminably, and were subjected to daily allegations in Parliament of corruption. They hadn’t actually done anthing that most other political parties had done, but their reluctance to own up to their mistake and put it right undermined public confidence in them as a Government.
   They only conceded to pay the money back after they had taken all the flak for resisting. And the attacks on the Auditor-General were disgraceful.

3. David Benson-Pope Much like Taito Phillip Field actually, although the allegations were not so serious. The perception was created, through Clark’s continued tolerance of Benson-Pope through the “tennis balls affair” in which he had quite clearly been economical with the truth. He was finally dispatched in July 2007 after allegations of him lying to Parliament over matters relating to the appointment of a Communications Manager in the Ministry for the Environment. Clark said at the time, “The way in which certain issues have been handled this week has led to a loss of credibility and on that basis I have accepted Mr Benson-Pope’s offer to stand aside”. Pity for her that she didn’t realise he had lost credibility much earlier.

   Benson-Pope clearly lied about the tennis ball incident, with 11 or so pupils recalling it. And the issue was not whether or not he was a perfect teacher – it was that he called his former pupils liars and denied an incidents. He created all the problems for himself by the way he went on the attack.
   
   

4. The Electoral Finance Act This was handled by Labour in the most appalling way. The original Bill was so poorly drafted that Justice Minister Mark Burton deserved the sack for allowing a Bill that was such a shambles to come before Parliament. He was later quietly stood down, but by that time the damage had been done. Labour railroaded the Bill through Parliament, refusing to consider very pertinent submissions from organisations such as the Human Rights Commission or suggestions from the Green Party who were left with a “take it or leave it” option. This allowed the right to create the perception of the Electoral Finance Bill, and consequently of Labour, being undemocratic – a task which the NZ Herald took up with great gusto.

   Here I will have a go at Toad. The bloody Greens voted for the EFA, and they voted against many good amendments that would have made it a lot better. They sacrificed any moral high ground on electoral issues with their shameful kowtowing to Labour. If the Greens had the backbone at the beginning to say we won’t vote for this at first reading unless you consult with all parties, then the EFA would never have happened. I’m actually getting sick of how many people on the left are now decrying the EFA, when they never spoke up at the time.

   And while the final EFA was bad enough, I agree Mark Burton should have been shot for letting the original EFB through – that was the most draconian law I have ever seen with statutory declaraions needed to send an e-mail to a mate on a topical issue.
   

5. Winston Peters Need I say more. Clark stood by Peters as allegation after allegation of impropriety and, in the last few weeks, even corruption emerged against Peters. In her first and second terms he would have been promptly dispatched, at least temporarily, for allegations of far less substance, but her continued tolerance of him as a Minister allowed her and her government to be tarred with the same brush as Peters.

   Here at least the Greens can take a bow, and did put some heat on Clark. Clark’s legacy will always be tained by her disgraceful defence of Peters, and her total lack of concern with the evidence from the Serious Fraud Office and the Muerant papers about possible policies for cash.

Tags: Auditor-General, David Benson-Pope, Electoral Finance Act, Electoral Finance Bill, Greens, pledge card, Taito Philip Field, Toad, Winston First

Support the Autism Intervention Trust. They deserve support in their own right anyway, but also should not be financially penalised for turning down $10,000 from NZ First:

The Autism Intervention Trust confirmed yesterday that it rejected an offer of $10,000 from the party – because “it wasn’t NZ First’s money to give”, spokeswoman Prue Payne said.

Ms Payne said the trust was tempted to give some of the money to a poor and “incredibly deserving” Somali solo mother who was struggling to raise her autistic daughter.

But when the trust realised the implications of where the money came from it sent NZ First’s cheque back because “it was the right thing to do”.

You can donate by cheque to the Autism Intervention Trust, PO Box 83052, Johnsonville, Wellington.

The following charities did take donations from NZ First, it seems:

• Royal Lifesaving New Zealand
• Stillbirth
• Newborn Death Support
• Kidney Kids of New Zealand
• Spinal Cord Society

Tags: Auditor-General, Winston First

Kiwiblog readers have been doing detective work and have discovered the Susan Couch – Crime Victims Charitable Trust was registered only a few weeks ago on the 10^th of September 2008.

It’s trust deed is online at the Companies Office.

The trust deed was signed on 15 August 2008 and the application was signed on 20 August 2008. But Winston announced the donation around 16 June 2008. So how did he make a donation to a trust that seemingly was not then formed?

The contact person is Brian Coburn of Hesketh Henry in Auckland. He is one of the three Trustees. The other two are Brian Henry and Dennis Gates.

Yes two of the three Trustees are Winston’s personal lawyers – his solicitor and his barrister!! Half the $158,000 has gone to a trust run by both his personal lawyers.

The settlor is Kevin Gillespie, an Auckland Accountant. Gillespie, Henry and Gates are all Directors of Goldman Henry Capital Management and in business together. They had some problems with the Securities Commission in 2004 incidentally, after the Commission found their prospectus did not comply with securities law and omitted a material particular. The investment statement was also found “likely to deceive, mislead, or confuse with regard to particulars that are material to the offer of securities”.

The Trust objects include “such other objects which the Board from time to time declares provided that such objects and purposes are charitable and involve the support and rehabilitation of crime victims”.

Board members can get remuneration for services rendered to the Trust. In fact it specifically allows such remuneration even if the work only comes about by virtue of being a Trustee. Note I am not suggesting any Trustee has received any money – just that as with most Trusts, they can.

There is no reference to Susan Couch in the trust deed, except being the name of the trust. Couch is not listed as the Patron, and the three Trustees have total power over the Trust.  She is not listed specifically as a beneficiary either. Again the Trustees have total discretion over who the money goes to (so long as within the objects), and Couch has no rights or say at all. So the Herald is wrong when they say it is “A trust for Susan Couch”.

Tags: Auditor-General, Brian Coburn, Brian Henry, Dennis Gates, Kevin Gillespie, Susan Couch, Winston First

Few acts are more cynical than NZ First’s giving $78,000 to The Susan Couch and Crime Victims Charitable Trust (trustee: Brian Henry) instead of repaying the taxpayer the $158,000 of taxpayer money illegally spent by NZ First in the 2005 campaign.

What is even worse, is that the $78,000 isn’t really from the members and grossroots of NZ First. The Vela Family donated $80,000 to NZ First in late 2007, to allow this donation to be made.

So what you actually have is a very wealthy, foreign domiciled, racing industry family has donated $80,000 to NZ First (whose Leader has forced the Government to pur massive funding into the racing industry) so they could give the money to the Susan Couch trust – and claim this is somehow paying the taxpayer back.

I joked at the time that they had probably donated the money to the Spencer Trust. Instead it has gone to a trust partly controlled by Winston’s lawyer. Ms Couch will be Patron of the Tust which suggests she won’t even be a Trustee herself – are there other Trustees?

To be fair to Brian Henry, he has been acting for free for Ms Couch in her fight to sue Corrections, and he is definitely on the side of the angels on this occasion for his actions to help Couch. While critical of Henry’s statements and actions over Owen Glenn, I make no such criticism in regards to this issue.

But that doesn’t change the fact that NZ First should be paying the taxpayer back, not making charitable donations on our behalf, and that having decided to make such donations they are ill-advised to make the major donation to a trust controlled by their lawyer.

Tags: Auditor-General, Brian Henry, Susan Couch, Vela Family, Winston First

There has finally been some attention paid by the media to Labour’s “information kit for the over 60s” which their MPs are posting and handing out in the tens of thousands.

Matthew Hooton has blogged on this several times in recent days.

This is a continuation of Labour’s 2005 pledge card strategy where Labour tries to get the taxpayer to pay for material it can use during the election campaign – and also tries to not have it count towards as part of their $2.4 million spending limit.

There are two questions involved:

1. Is it appropriate and legal for the info kit to be paid for by The Parliamentary Service (taxpayers) for distribution during the election campaign?
2. Does the info kit constitute an election advertisement under the Electoral Finance Act?

The answer to (1) is that it is legal – but, and this is important, only because Labour, NZ First and Greens rammed through a law change to over-turn the Auditor General’s interpretation of the previous law.

The Auditor-General could well have found, if the law had not changed, that this info kit was electioneering – especially as it was produced and distributed so close to an election. If it was a genuine info kit it would have been produced and distributed last year or even earlier this year.

But Labour First and the Greens changed the law (without even giving the public a chance to submit on the law change) so that only material which explicitly sought support for a party (as oppossed to implicitly) is covered. Under this law change Labour’s 2005 pledge card could be legally taxpayer funded again.

My solution to this rorting of the system is simple – ban taxpayer funding of such advertising in the last 90 days. If it was a genuine info kit then they can produce and distribute it when there is not an election a few days away.

This is all part of Labour’s strategy to hold its most marginal seats. Part One was the Electoral Finance Act to silence new candidates by extending the $20,000 limit in the regulated period from 90 days to all of election year. This is a limit of around 5c/voter/month. Part Two was changing the law so incumbent MPs could use taxpayer funded advertising during the election campaign. It is all designed to keep incumbent MPs in their jobs.

Considering the huge amount of interest in the pledge card last time, it is surprising it has taken so long for the media to cover this issue. Has TVNZ or Radio NZ told their viewers and listeners that Labour and “friends” changed the law to make these info kits legal?

The second issue is whether or not the info kits are advertisements under the Electoral Finance Act. I tend to think they are not. The issue for me is whether MPs should be allowed to use their taxpayer funded budgets so close to an election to be writing and sending stuff to tens of thousands of voters.

Tags: Auditor-General, Electoral Finance Act, Labour, Matthew Hooton, Parliamentary Service, pledge card, taxpayer funding

The Dom Post has been trying to track down the nine charities NZ First claimed it donated $158,000 (identified by the Auditor-General as illegally benefiting NZ First) to. All 45 big national charities talked to have said they never got a cent.

I imagine someone has checked this out, but there is no chance the Spencer Trust is a charity is there?

Tags: Auditor-General, Spencer Trust, Winston First

The Rudd Government has changed the rules around Government advertising campaigns:

But the Government will have to tread carefully to ensure it does not breach its own advertising guidelines, unveiled earlier this week by Cabinet Secretary John Faulkner.

Under the rules, the Auditor-General has to sign off on any advertising campaign with a value of $250,000 or more.

This could be a good policy for NZ. At the moment it is up to Ministers and Departments to decide if their advertising complies with the AG’s guidelines, unless there is a specific complaint or referral.

Requiring the AG to approve any significant campaign in advance seems to me to be a win-win. The Government then has the confidence that any campaign will not be criticised by the AG at a later date, and the public have the confidence that the AG has approved it.

Tags: Auditor-General, Government Advertising

Some people think waste in the public sector is just the odd conference at a resort hotel. But the big ticket items are the massive cost blowouts on projects, with Corrections and Defence being the worst offenders.

Bernard Hickey blogs on this:

Late last week the Auditor General Kevin Brady reported back to the public that he had abandoned an investigation into why the cost of the Ministry of Defence’s NZ$2.2 billion programme for buying new ships and helicopters and upgrading planes had blown out by NZ$392.6 million.

He abandoned the investigation because the Ministry’s financial reporting systems were so poor that he couldn’t tell exactly why the costs had blown out.

This should indeed be a major story.

Tags: Auditor-General, government spending

The Dom Post reports:

Cystic Fibrosis has returned a $10,000 donation made by NZ First, saying it is unclear if the party “has any right” to make a charitable donation on money wrongly spent at the last election.

The charity, one of nine understood to have received a share of the $158,000 owed by the Winston Peters-led party, announced its rejection of the money last night.

Now the Cystic Fibrosis Association is a small charity that does great work. Turning down $10,000 is a lot of money for them. They’re a charity I’ve supported in the past through sponsorship of a triathlete who competes to raise money for them.

So they are not punished for doing the right thing, I’d encourage people to donate to them. You can do an online pledge here, and of course it is also tax deductible.

Tags: Auditor-General, Cystic Fibrosis, Winston First

The Dom Post editorial does not approve of the secret donations:

Lest anyone has forgotten, it should be remembered that the donation is not a donation in the commonly understood sense of the word. It is NZ First’s response to having been caught misspending $158,000 of public money during the 2005 election campaign. …

But giving $158,000, taken from the public purse, to outside organisations does not constitute repayment of a debt. Nor does refusing to name the recipients, something he had previously undertaken to do, lend credibility to the exercise. Mr Peters says he has decided not to name the charities because he does not want them bothered by the “prying media”.

That is a one-fingered salute to those who hold to the quaint notion that politicians should be accountable for how they spend public money.

It is also unsatisfactory. Who is to say that NZ First does not regard the Re-elect Winston Campaign in Tauranga or, for that matter, NZ First itself, as charities?

By retrospectively changing the law, the Government obviated the legal requirement for politicians to repay the money they unlawfully spent. But the moral obligation to comply with the law of the day remains. NZ First has not met it.

If no other benefit arises, Mr Peters’ reluctance to do the right thing serves as a useful reminder of how a politician positioning himself to once again act as a post-election kingmaker, operates.

Mr Peters has made a reasonable fist of being foreign minister, though as a minister outside Cabinet who opposes New Zealand’s landmark free trade deal with China he is an international oddity. But voters know he remains a law unto himself and one whose principal priority appears to be to ensure he is reinstalled as foreign minister whichever party heads the next government.

Says it all really.

Tags: Auditor-General, Dominion Post, Winston First

Newsroom reports that Winston has stated that NZ First has made $158,000 in secret donations to charities, in lieu of paying The Parliamentary Service as all other parliamentary parties have done in relation to spending identified by the Auditor-General as illegal.

The party set about donating the money to other charities and it is understood that up to 10 have received a slice of the money after approaching the party.

NZ First is not intending to publicly name the charities so they are not put under pressure for accepting the money, but it has provided the list to Ms Wilson.

However nothing stops the media from asking various charities if they have accepted money from NZ First.

So NZ First is the party of transparency which receives secret donations, that then turn out not be a donation at all, and also makes secret donations.

Tags: anonymous donations, Auditor-General, Winston First

The Electoral Finance Act is the gift that goes on giving.

The NZ Herald today reveals that Labour has had to centralise every single proposed communication by a candidate or MP, with a committee of two head officer staffers and three parliamentary staffers (yes parliamentary staffers approving election material).

So no candidate can put anything out until the weekly committee meeting approves it.

The act had broadened the definition to mean any form of words or graphic that could reasonably be regarded as designed to encourage or persuade someone to support a party or candidate.

The act is not working in the way that Labour had anticipated because it expected that most material its MPs produced under parliamentary funding would not be counted as election expense, whereas the Electoral Commission has no regard as to how material is funded.

It is actually established case law that it does not matter who pays for election adverts, as to whether they are adverts and expenses. Labour and allies tried to subtly change the law, but failed.

New Zealand First’s weekend post-Budget advertising campaign was paid for by taxpayers and carried a parliamentary crest, but was authorised as an election ad.

That means the party can’t be prosecuted if it is found to be an election ad _ but the cost of it will have to be counted against the party’s total election expenses.

This is correct that NZ First has no issues under the EFA. They are authorised and there is no way they will come close to their spending limit.

However I do wonder about The Parliamentary Service approving them, and whether the Auditor-General should be taking a look at them. The NZ First advertisements are blatant advertisements implicitly calling on people to support them if they want lower GST and more money for pensioners (Winston isn’t too hot on the idea of spending less than you bring in). Now Labour, Greens and NZ First passed a special law to make it easier for their election advertisements to be funded by the taxpayer. However even under this new law, the NZ First ads are pushing the boundaries. I really think the Auditor-General should take a look.

Tags: Auditor-General, Electoral Finance Act, Labour, Parliamentary Service, Winston First

The Government is moving in the right direction with its decision to have the Auditor-General investigate the Immigration Service. This is on top of the SSC, Labour Department and Police investigations.

Few would dispute that the Auditor-General has more independence than an internal inquiry by SSC or Labour. In that regard, asking the AG to investigate is a good thing.

Lockwood Smith makes the point that the AG may not be able to investigate what Ministers were told, and when. Certainly it appears in some areas Ministers were never briefed – namely the non doctorate by LSE. But they were briefed it seems on the Oughton report and the investigation into setting up the Pacific Branch.

Yesterday National’s immigration spokesman, Lockwood Smith, said the Auditor-General’s inquiry had to include ministerial involvement. “David Cunliffe and Clayton Cosgrove were briefed but did nothing.”

But Helen Clark said she was satisfied her ministers had acted appropriately on the information they were given.

With all respect, I’d feel much more reassured if there was some verification of that. The issue is whether the public agree that Ministers acted appropriately – and for that to happen, more information is needed.

However it appears the Auditor-General will get to set his own terms of reference – that is a good thing.

Tags: Auditor-General, Helen Clark, Immigration Service, Lockwood Smith