Home > Broadcast, The Body Politic > Radio NZ: Focus on Politics for 21 March 2014

Radio NZ: Focus on Politics for 21 March 2014

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– Focus on Politics –

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– Friday 21 March 2014  –

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– Jane Patterson –

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A weekly analysis of significant political issues.

Friday after 6:30pm and Saturday at 5:10pm

The Education Minister has once again found herself at the centre of a political storm, after allegations relating to the Kohanga Trust Board’s commercial arm, have ended up with the Serious Fraud Office.

The question is; when does public money cease to be public?

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Radio NZ logo - Focus on Politics

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Click to listen: Focus on Politics for 21 March 2014 ( 17′  28″ )

  • Hekia Parata, Pita Sharples
  • Kōhanga Reo National Trust Board, Te Pataka Ohanga
  • Ernst & Young report
  • Serious Fraud Office
  • Derek Fox

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Acknowledgement: Radio NZ

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  1. 23 March 2014 at 5:19 pm

    The question is; when does public money cease to be public?

    This comment maybe relevant.*

    $8 million was committed to the set-up of Maori Television in the 1996/97 fiscal year.

    Reading the APPENDIX: THE SFO REPORT dated 10 JULY 1997 of a complaint about the activities of Aotearoa Television Network.

    On 30 January 1997 a complaint was received profit byabout the activities of Aotearoa Television Network, (“Aotearoa”). Three areas of complaint were identified by this Office:

    1. The retention by Mr T Morgan MP, of a secret interest in Aotearoa contrary to his disclosure to Parliament.
    2. The obtaining of a secret and dishonest profit by Mr Derek Burns and Mr Peter Brannigan when negotiating the purchase of the assets of a company, 601 Digital Video Limited (“601”), by Aotearoa.
    *3. The unauthorised and dishonest expenditure of Aotearoa funds by certain Officers of the Company.

    Each of these areas of complaint were investigated, but I shall comment on *3.

    The third area of the complaint related to particular expenditure by Mr T Morgan (Tuku Underpants) and Mr McDonald on personal items including clothing (many pairs of BOXER UNDIES), and travel.

    In order to justify bringing criminal charges the SFO needed to establish that there was no proper authority for the expenditure. The fact that the expenditure may appear excessive was insufficient.

    Aotearoa received its funding from Te Mangai Paho (“TMP”), the Maori Broadcasting Funding Agency established by Government to promote Te Reo me ona Tikanga o nga Iwi Maori o Aotearoa.

    The contract with TMP required Aotearoa to achieve certain minimum outputs in terms of programmes. Provided that was done, and the evidence is to the effect that it was, no other restraints were imposed on the company as to how the funds were to be used back then.

    The contract provisions between TMP and Aotearoa had been the subject of separate investigations by the Controller and Auditor General and the Commerce Select Committee. It was in that area that the Government could, if it so wished to, impose conditions on the application of public monies.

    The enforcement of those provisions would be regarded as contractural rather than a criminal matter.

    The fact that all of Aotearoa’s funding came from a public source was irrelevant. Once in the hands of Aotearoa, the money belonged to that company and could be spent as the company wished provided it substantially met the conditions upon which it was received.

    Judge V R Jamieson, Acting-Director rendered his decision after a difficult investigat

    He concluded that much of the evidence made available was oral, unsubstantiated by any written material. He considered the credibility of the people involved in reaching his decision as well.

    He found after carefully weighing all the material made available to him that the evidence fell short of establishing any serious or complex fraud on any part of the persons associated with Aotearoa Television or it’s associated company Pumanawa to justify criminal charges.

    His view was also shared and confirmed by an independent examination of Mr Brent Stanaway, Crown Solicitor in Christchurch.

    I have taken excerpts from the SFO Report Appendix from PUBLIC MONEY PRIVATE LIVES…Aotearoa Television – The Inside Story Author: Derek Burns.

    I shall conclude with a statement from Mr Burns…

    “The issue of when public money becomes private money is at the heart of the Aotearoa Television saga. Its an important issue, particularly in terms of the way Tuku Morgan has been attacked by politicians and the media. When Tuku Morgan worked at Aotearoa Television, he was neither a politician nor an MP, but a private person working for a private company. Hence, when he spent his money, it was his to spend as a private individual, and if he has a taste for expensive underwear that is his business, no one else’s.

    “If public money never becomes private money, then politicians and public servants, who receive salaries from the government, are spending public money. Hence they should be giving detailed and public accounts to parliament showing how they spend their wages. Surely there can’t be one rule for the private sector and another for politicians and public servants – or is it only Maori companies who have to meet different criteria?”

    Who knows what the SFO will consider of the spending within Te Pātaka Ōhanga, a subsidiary of Te Kōhanga Reo National Trust…We shall wait and see.

    Cheers 🙂

    • 24 March 2014 at 9:35 am

      That’s an interesting perspective on the issue, Siena. (I recall the “Underpants” scandal quite clearly and the damage it caused NZ First, which was in coalition with National at the time.)

      If the analysis presented is correct, and public money becomes private money once it is passed on to a private provider (assuming all contractual obligations have been met), then other questions may arise;

      1. Is too much public money being paid to a private provider if some of it can be diverted to purposes that were not originally intended?

      2. What safeguards are there to prevent private providers using technicalities (eg; subsidiary companies; over-padded salaries and expense accounts, etc) to use public money once it becomes private money?

      3. Is there a case for keeping public money public, so that it is all spent on intended services (or products), and not diverted to other areas (even if quite legal)?

      It may be that the whole concept of PPPs (Public Private Partnerships) is fraught with the risk that public funds can be used for purposes that were never originally intended – even if it is quite legal.

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