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

Auckland Councillor Jami-Lee Ross has stated:

The Mayor of Auckland has been called on by one of his councillors to return a $3,375 campaign donation back to Auckland ratepayers.

The call comes after recent media reports of a donation to Mayor Len Brown from the Counties Manukau Pacific Trust. The charitable trust has been largely funded in the past by Manukau City ratepayers and continues to receive a $385,000 operating grant each year.

Auckland Councillor Jami-Lee Ross has written to Mr Brown saying he has a “moral obligation” to return $3,375 back to ratepayers. “This donation is highly questionable and, in my view, should never have been made. …

Mr Ross says the Trust’s connection to the city’s ratepayers is too close for it to have engaged in actively supporting election campaigns.

“There are very strong arguments that the donation is in effect public money, if not by definition, then by perception. The Trust’s own financial statements note that the Trust is considered a Council Controlled Entity.

“I have no doubt that the ratepayers of Manukau City would not have expected an organisation that has benefited so generously from Manukau City Council to be contributing to the election campaigns of political candidates. …

“Len Brown has a moral obligation to return the $3,375 back to the people that fund the Counties Manukau Pacific Trust. Doing so would be seen as testament to his honesty and integrity,” says Mr Ross.

The multiple links between the trust and the campaign, with an exchange of personnel, a probably illegal donation, and subsequent board appointments need investigating.

Also there is need of a culture change at the new Auckland Council for refusing to make available the donation and expenses return, unless you physically visit them. They won’t even allow journalists to take a photocopy.

This reinforces my view that the Electoral Commission should be placed in charge of all local body elections also. They have a good commitment to transparency.

Tags: Auckland Council, Counties Manukau Pacific Trust, Jami-Lee Ross, Len Brown, political donations

The Sunday Star-Times reports:

Local Government Minister Rodney Hide has said he will complain to the auditor-general over a donation to the campaign, because he believes it came from an entity with ties to the Manukau City Council, which Brown headed before becoming mayor of the super city.

Brown’s 2010 returns, filed on Friday, show a $3375 donation from the Counties Manukau Pacific Trust, which administers Manukau’s Pacific Events Centre.

I think it is essential the Auditor-General investigates, because the links between this trust and Len Brown’s campaign are numerous.

The CMPT is a charitable trust. Donating (money or services) to a political campaign goes against that charitable status, and the Charities Commission and IRD could well ask questions about this. The donation may put at risk the millions of dollars of tax free grants and donations they get. If I was a Trustee, I’d want to know who authorised this.

But not only is the CMPT a charitable trust, it is one which has been hugely funded by the ratepayers of Manukau. The CMPT was set up by Manukau Mayor Barry Curtis in July 2000. The Manukau City Council appoint two of the seven members of the electoral college that appoints trustees, and can designate sucessor appointing organisations for the other members.

Three, possibly four, CMPT people were on the eight strong Len Brown campaign team. Trustees Karen Avery and Mike Hutcheson were on the inner cabinet team of eight, plus CMPT CEO Richard Jeffrey. In addition to those three, it is rumoured that one key campaign staffer was also on the CMPT payroll, as well as the CEO. I won’t name him as it has not been confirmed, but I understand media have asked him if it was true, and he has not returned their calls.

Regardless, you have a hue cross-over between Len’s campaign team and the Trust. And who funds the Trust?

Well the Manukau City Council gave them a $9 million grant. Plus $385,000 a year in a service contract. And on top of that they have effectively donated all their land by way of a 99 year lease for $1/year. On top of that the ratepayers through the old MCC, guarantee a $7.5m overdraft facility for the CMPT.

This means that under the law, for financial reporting purposes, the CMPT is “considered a Council controlled entity”.

The CMPT incidentially has negative working capital of $500,000 and made a $652,000 loss last year, so you would think they would be focused on that – not on helping Len Brown get elected.

Having the CEO of a charitable trust that receives ratepayer funding, working for a partisan political campaign is a huge conflict of interest – made even worse by the fact he had the trust donate billboard space to the Brown campaign.

How much work time did the CEO spend on the Brown campaign? Is it true that another Brown campaign member was an employee of the CMPT – if so for how many months was he employed by both the CMPT and the Brown campaign?

And to make things even murkier, we find out that CEO Richard Jeffrey was one of the attendees at the secret Volare dinner, and has also just been appointed to a CCO for his services to the campaign.

This is the same Richard Jeffrey quoted in the Herald in July 2010 as praising Len Brown for his relationship with the events centre. The Herald forgot to mention that he was a member of the Brown campaign team in the article.

Tags: Counties Manukau Pacific Trust, Len Brown, Richard Jeffrey