Between the lines: Rod Oram

Generous taxpayers need some answers

By ROD ORAM

Damian Archbold, promoter of the Global-e $US1 billion issue of prize bonds launched last week, used Trade New Zealand to help get his idea off the ground.

But what was Trade NZ's role? Taxpayers deserve to know its answers to these questions:

* How did Trade NZ decide whether to help Mr Archbold?

* How did it decide that he had the appropriate skills and experience?

* How did Trade NZ weigh up Mr Archbold's project against others before allocating resources to him?

* How many hours and dollars have Trade NZ spent helping Mr Archbold since 1996?

* How much money has he paid for those services since 1996?

* How many hours and dollars have Trade NZ spent helping Ron Ryan, Mr Archbold's fund manager?

* How much money has Mr Ryan paid for those services?

Trade NZ needs to answer these questions because it is accountable to taxpayers. Moreover, the Government is about to give it more money to fund greater intervention in the economy.

If Trade NZ will not volunteer the answers, then Prime Minister Helen Clark must seek them and make them public.

Is this making a mountain out of a molehill? Consider this: Mr Archbold wants to deploy $US275 million ($561 million) of bond-holders' funds in his new Auckland-based company. Yet he has had a limited career culminating in being chief executive of only one company, Senova of Scottsdale, Arizona.

Senova had barely $US1 million of equity capital and between six and 15 employees. By US standards, Senova was microscopic.

Mr Archbold was chief executive for just two years. In Senova's short life - terminated by legal problems not of its own making - it never made a product for commercial sale.

Let's set those facts in a hypothetical kiwi context. Back in the mid-1990s, Fred Smith, a man with some business experience, is running a company in Invercargill. He funds it with $2 million of capital from a wealthy acquaintance.

He employs a few people but the company is killed off by problems for which others are to blame.

Mr Smith comes to Auckland and cold-calls Trade NZ. He says he has an idea for a business that will employ skilled software engineers and low-skilled callcentre operatives. But boy, will this business be big!

Mr Smith says he knows lots of people abroad who can help him but no New Zealanders north of Invercargill. Therefore, please could Trade NZ spend four years of its time and money introducing him to prominent New Zealand business leaders and Wellingtonians such as Finance Minister Michael Cullen and Reserve Bank Governor Don Brash.

Nice help if you can get it. Mr Archbold did.