Lack of scrutiny for $4.8m grant

Finance Minister Bill English. Photo / Mark Mitchell.

A trail of documents show a lack of communication, an absence of Cabinet papers and the lone hand of Finance Minister Bill English in approving $4.8 million in public money for an agency that was ultimately left out in the cold.

After months of appealing to the Ombudsman, the Herald successfully won the release of more documents under the Official Information Act which reveal how the Government approved the money and who knew - and didn't know - about it.

In May, the Government announced the money had been awarded to the Pacific Economic Development Agency (Peda), but criticism soon mounted over the untested company with a single shareholder, and the lack of a competitive tender process.

Yesterday - seven months later and after a tender process was opened - the contract was finally awarded to four companies. Peda missed out.

The trail of emails suggest Mr English approved the money without telling the Ministry of Pacific Island Affairs or the Treasury.

His office told the Treasury on March 17 that the minister had approved the appropriation so officials could include it in the Budget in May.

The following morning, a Treasury official emailed the ministry: "We don't know a great deal more about this initiative. However, ministers have made the decision to fund this - presume someone in [Pacific Island Affairs] must know about it?"

A ministry official replied: "The information we have over here on this is very sketchy. Are you able to send us or point us in the direction of the Cabinet papers so we can proceed? [Ministry chief executive Colin Tukuitonga] said that he was involved in discussions back in Nov 09 but had heard nothing since."

The Treasury adviser answered: "We are even more in the dark on this one - there are no Cabinet papers or anything else ... Maybe worth asking your minister's office."

It is not clear whether Pacific Island Affairs Minister Georgina te Heuheu knew of Mr English's decision, but if she did, it appears she had not told her ministry.

Within days, the ministry had evaluated Peda, concluding it was inexperienced, untested, did not have a good track record working with others, and was proposing programmes that overlapped with existing ones.

It also noted the lack of a tender process, but proposed a robust contract to mitigate these risks.

Dr Tukuitonga met Peda at the end of March and Mrs te Heuheu on April 1. The minister asked for information to be presented in one A3 sheet to "show the big picture". But emails show that the meetings did little to alleviate the CEO's concerns.

"I am unconvinced about the Peda ideas," Dr Tukuitonga wrote in late April. "Apart from the obvious duplication of existing efforts, there is nothing there that is exciting, ie, innovative, new, effective, creative etc."

The Budget announcement raised questions over why there was no tender process, which prompted Treasury officials to ask the same question.

An email from Mr English's office to Pacific Island Affairs acknowledged "a decided lack of communication regarding the questions and guidance [being] sought right through the process and the lack of dialogue amongst key people".

THE EMAIL EXCHANGE

MID-MARCH
Bill English's office emails Treasury to inform it of decision to give $4.8m over four years to Peda.

TREASURY EMAILS THE MINISTRY OF PACIFIC ISLAND AFFAIRS
"We don't know a great deal more about this initiative...presume someone in [Pacific Island Affairs] must know about it?"

MINISTRY REPLIES
"The information we have over here on this is very sketchy. Are you able to send us or point us in the direction of the Cabinet papers so we can proceed?"

TREASURY ANSWERS
"We are even more in the dark on this one - there are no Cabinet papers or anything else...Maybe worth asking your minister's office."

MARCH 25
Ministry advice on Peda says it is untested, unproven, does not work well with others and is proposing programmes that would overlap with existing ones.

APRIL 1
Pacific Island Affairs Minister Georgina te Heuheu meets her officials, requesting information to be presented in one A3 sheet to "show the big picture and overlaps".

APRIL 29
Ministry head Colin Tukuitonga's email (recipient withheld): "I am unconvinced about the [Peda] ideas."

MAY 20
Budget announcement of $4.8m over four years going to Peda.

AUGUST
Ministry announces competitive tender process.

YESTERDAY
Four companies win Government contract. Peda not one of them.