By AUDREY YOUNG political reporter
Misreporting of scampi catches would be one of the worst cases of conspiracy to defraud the public on record if proven, says former Fisheries Ministry solicitor Mike Sullivan.
He accused his former ministry colleagues of failing to properly investigate the claims into Simunovich Fisheries, when he appeared before the parliamentary inquiry into the $100 million scampi fishery yesterday.
He also claimed a payout to a former fisheries investigator was "massaged" to avoid running it past the Fisheries Minister at the time.
He told the committee it was being "carefully shielded" by the ministry from the people who had carried out initial inquiries into the allegations.
The primary production select committee is hearing evidence in an inquiry into the ministry's management of the scampi fishery.
Mr Sullivan was appearing as a private-sector lawyer acting for Neil Penwarden's fishing company, Barine Developments.
They say the ministry favoured Simunovich over others such as Barine and Sealord and that it failed to properly investigate claims of misreporting.
Speaking about "confessional" affidavits from skippers he had seen about misreporting, Mr Sullivan said: "How could this have slipped through the net? It simply does not make sense.
"The allegations ... are amongst the most serious allegations of a conspiracy to defraud the public of New Zealand that I have ever seen."
The allegations involved millions of dollars worth of quota and Mr Sullivan said if there had been over-reporting of catches (on which quota will eventually be based), the surplus quota belonged to New Zealanders through the Government.
Mr Sullivan worked for the ministry from 1989 to 1997, overseeing more than 200 prosecutions.
If allegations had surfaced while he had been at the ministry, "I am without any doubt they would have been ascribed the highest priority.
"My gut feeling is there was a failure amongst the senior managers of the compliance division in the Ministry of Fisheries to properly follow up an investigation that seriously warranted such an investigation."
But he said he had never believed allegations of corruption against deputy chief executive Stan Crothers or national compliance manager Dave Wood.
"I have known those people personally for a number of years as colleagues and it would take powerful evidence to convince me they were corrupt."
Mr Sullivan said that without a proper investigation he did not think the committee was in a position to reach any conclusion about whether Simunovich had committed an offence.
If the committee believed there was a foundation to the allegations, it could recommend a lawyer with requisite level of experience as a prosecutor have access to the ministry's catch record files and make appropriate decisions.
Mr Sullivan also defended the reputation of former fisheries officer Barry Nalder, who claims he was effectively dismissed to stop his inquiries into possible misreporting by Simunovich.
Ministry officials last week told the committee that Mr Nalder had shown gross misjudgment and incompetence before a termination settlement was negotiated.
But Mr Sullivan said there was "no doubt that Mr Nalder was victimised".
Mr Nalder left in 1994 after negotiating what was called "enhanced early retirement", receiving $67,646 in recognition of 26 years of public service, including his time in the police, $13,100 for "humiliation and distress"and up to $5000 for legal costs.
Mr Sullivan said he was not aware of the payout's exact details.
"But from what I do know, is there was some heavy massaging of the basis on which that payout was described in order to slip it past the need to refer it to the minister."
Sealord company secretary Terry Horne told the committee it took his company 18 months to be granted a scampi fishing licence in 1991 when others had received one straight away.
Former Prime Minister Sir Geoffrey Palmer, a constitutional lawyer, recounted the legal decisions that had found the ministry's decisions to be unfair and unlawful, and the ministry's failure to change.
His clients Sealord and Barine "put their faith in the justice system", he said. "It has not worked because the ministry will not listen to the courts."
He said "the totality of events ... amount to high-handed bureaucratic action of an unacceptable character and is not to be tolerated in a modern democracy committed to the rule of law".
Scampi case may be 'worst fraud'
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