Former Ministry of Transport senior manager Joanne Harrison, jailed for fraud in February, was in charge of a DoC inquiry into harassment before her offending came to light, says Winston Peters.
The Department of Conservation says it is reviewing a workplace harassment inquiry led by a woman now convicted of fraud.
A DoC spokeswoman confirmed this morning that convicted fraudster Joanne Harrison was involved in investigating an employment matter at the department.
But DoC downplayed her role in the 2015-2016 inquiry.
"Given she was part of a team it is highly unlikely that there is any impact on the investigation," the spokeswoman said.
"Harrison was not the final decision maker. However, the department is assessing the [case] to confirm its comfort with the situation."
While DoC sought to minimise Harrison's part in the inquiry, she appeared to have taken a lead role. Her name is the only one printed on the cover of a draft report.
It is just the latest development in Harrison's case. A former Ministry of Transport senior manager, she was jailed in February for defrauding the ministry of $750,000.
In a speech on Sunday, New Zealand First leader Winston Peters revealed that she was in charge of the inquiry into harassment within DoC's information systems and management department.
Peters told the Herald yesterday that Harrison completed a draft report in March last year, just before her offending came to light. She was arrested in August on fraud charges.
Peters said her involvement in the inquiry "taints every finding, recommendation, and outcome DoC took".
"This has a cascade of employment law implications for the staff involved in a report dated March 2016 - only weeks before the truth came out."
Peters said the latest revelation about Harrison raised further questions about her former boss Martin Matthews' judgment. Matthews led the ministry at the time of the fraud and has since been appointed Auditor-General.
Political parties who approved his appointment say they should have known the full details of his handling of the fraud case when they were considering him for the role.
Labour leader Andrew Little has asked the Speaker to review his appointment, and Peters says he should stand down while a full investigation is carried out.
In a further development yesterday, State Services Commissioner Peter Hughes said he was considering a new investigation into the ministry's handling of the case.
Former ministry staff last week said they were forced out of their jobs after raising concerns about Harrison's behaviour.
As a result, newly appointed Secretary of Transport Peter Mersi set up an independent process to look into their concerns.
Hughes said that he had received an email from former staff members raising concerns with this process.
"I am treating this as a request for SSC to investigate the concerns they have raised. I take their concerns seriously and I am considering this request."
He said public servants who had concerns about an issue needed to raise them so they could be properly considered and addressed.
Radio New Zealand reported that two former staff members at the ministry believed they were targeted in a ministry restructuring after they pointed out fake invoices and dubious travel.
Prime Minister Bill English said yesterday the ministry had already conducted an internal review and had concluded that it handled the issue appropriately.
He said that if the whistleblowers had provided new information about the case, then the State Services Commission could have to investigate.
"Because you have to make sure that the employees were treated fairly - they are alleging they weren't.