Auditor's probe stalls casino talks

SkyCity has offered to build Auckland's convention centre in return for being able to have more poker machines. Photo / APN

Officials negotiating the SkyCity pokies-for-cash deal have stopped meeting the casino company since the office of the Auditor-General began investigating, newly released documents reveal.

The halt comes after assurances from the Ministry of Business, Innovation and Employment that they had met SkyCity since the inquiry was launched.

The Audit Office began investigating after questions were raised over the selection of SkyCity to build the $350 million convention centre. SkyCity had offered to build the centre at no cost in return for gambling concessions giving it more poker machines and gaming tables.

The deal came under scrutiny after it emerged that Prime Minister John Key suggested, while dining with the company's board, that it bid for the contract.

Last month, the Herald asked whether officials had met SkyCity since the inquiry was announced. A spokeswoman for the ministry said: "Yes, they have." Asked if negotiations were on hold, she said: "No, there are no practical reasons why negotiations can't continue."

The ministry refused to provide further details, insisting the Herald wait for information being sought through the Official Information Act.

The response this week showed the last time ministry officials had personally met SkyCity bosses was June 13 - the same day the Auditor-General announced the inquiry. Records showed that since then, there had only been one teleconference, on June 26. The information showed that before that, officials and SkyCity executives had met in person 22 times since the company was first selected.

Twenty meetings were in Auckland, where the casino is based. The other two were in Wellington, where the ministry's lead negotiator, Roger Wigglesworth, is based.

A spokesman for the ministry said it considered the meeting held the day the inquiry was announced should be classified as one of those to have been held since. He said the phone conference should also be considered a meeting. "This was a formal teleconference with multiple participants."

Green Party co-leader Metiria Turei, who asked the Auditor-General to intervene, said it showed the ministry "messing with semantics".

"Somebody is not telling the whole truth. Saying they had a meeting and having only a teleconference is not the same thing."

She said the "lack of transparency" was behind the original call for an inquiry.

Labour leader David Shearer said it was "barely a meeting" after contact which he called "full on".

"The Auditor-General's inquiry has put the brakes on going forward despite what they are saying. It seems the ministry has backed off."

A spokesman for Business Development Minister Steven Joyce said the issue was for the ministry to handle and negotiations were continuing.

The Auditor-General's office confirmed that Queen's Counsel Kristy McDonald is now involved to help ensure the inquiry is completed quickly. The PM's office has confirmed he met the Auditor-General's team at the end of last month.