KEY POINTS:
The State Services Commission says Environment Minister David Benson-Pope had no role in the conflict of interest case which resulted in the partner of a National Party press secretary losing her job.
However, in a report released today, Acting State Services Commissioner Iain Rennie said it was a phone call from a staff member in Mr Benson-Pope's office that alerted the Ministry of the Environment to the relationship between Madeleine Setchell and Kevin Taylor.
Mr Taylor is National Party leader John Key's chief press secretary, and when Ms Setchell lost her job within three days of being appointed as the ministry's communications manager questions were raised about political interference.
State Services Minister Annette King asked for a briefing from the State Services Commission, which she released today.
In the briefing report Mr Rennie confirmed Ms Setchell disclosed her relationship with Mr Taylor when she applied for the job.
"The Ministry of the Environment at first did not realise the significance of Ms Setchell's potential conflict of interest and the chief executive was certainly not aware of any potential conflict of interest at the time of her appointment," the report said.
"The possibility of an issue was brought to the attention of the chief executive, Hugh Logan, by way of a phone call from the office of the Minister for the Environment after Ms Setchell had started work at the ministry."
The report said the caller inquired about the relationship between Ms Setchell and Mr Taylor.
"The staff member from the minister's office indicated that it would be helpful to know whether this (the relationship) was true but also stressed that it was entirely the chief executive's responsibility to make decisions on the employment of staff."
It said Mr Logan had then "clarified the situation" and considered there was a potential conflict of interest that required management.
At that point, Mr Logan sought advice from State Services Commissioner Mark Prebble and "around that time" also told Mr Benson-Pope's office about "the exact nature of the relationship".
"Mr Logan is very clear that the minister stressed that staff issues were the responsibility of the chief executive alone," Mr Rennie said in his report.
"Mr Logan is clear that he made the decision independently and that the minister was not involved in that decision."
Mr Rennie said Mr Logan and Ms Setchell then explored options "which would have involved the offer to her of an alternative position".
"Ms Setchell was not dismissed from the Ministry for the Environment," Mr Rennie said.
"Ultimately, Ms Setchell declined to accept the alternative offered by Mr Logan and an agreement was reached for her to leave the ministry."
The rest of the briefing report deals with advice from Dr Prebble about the way the public service hires its employees.
"The lesson learned from this experience is not that perceived personal conflicts should be ignored in our small society but rather should, and can, be managed with care and flexibility," Dr Prebble said.
"It would be wrong to conclude that anyone with political family connections is unwelcome in the public service."
He cited his own case, saying his brother (Richard Prebble) had been active in politics for many years.
Ms King said it would be inappropriate for her to comment on the report.
Mr Key has previously described the situation as inappropriate and "extremely distressing".
The Public Service Association, which represents public service employees, said it agreed with Dr Prebble but it was concerned that the principles he set out were not applied in Ms Setchell's case.
"We hope there won't be a repeat of the mishandling of the Madeleine Setchell case," said PSA secretary Brenda Pilott.
Mr Benson-Pope has previously said he had nothing to do with the case and has refused to comment on it, but after Mr Rennie's report was released Mr Key said it showed he must have known about it.
"No Beehive staffer would act on an issue as serious as this without the minister's say so," Mr Key said.
"David Benson-Pope has been dancing on the head of a pin. His honesty is again under scrutiny and (Prime Minister) Helen Clark must say whether she intends to tolerate this low standard."
- NZPA
