Taupo Mayor Rick Cooper says he's shattered by news the Taupo District Council is being investigated by the Serious Fraud Office.
Mr Cooper said he didn't know what the alleged fraud was in relation to or who it involved.
He challenged whoever made a complaint to "put up or shut up''. He believed there was a vendetta against the council and that people were trying to manipulate public opinion.
"I do believe that there's someone or some people are being very, very mischievous in the public and are screwing the scrum to suit their own ends,'' Mr Cooper said.
"If there's somebody in the community that thinks there's something wrong in this council, please let me know and I'll personally open any file book or anything and have a look.''