She added she "would have got someone to interpret considering 90 per cent of attendees were non-Maoris" [sic].
The newsletter went on to say if Rapihana's use of te reo was "deliberate" then it was "an insult" to two guest speakers at the event who were not Māori.
Panadam told Local Democracy Reporting she did not believe her comments were racist and Rapihana should have translated his speech into English.
Rapihana became aware of the newsletter after a concerned Grey Power member sent it to the Ōpōtiki District Council office anonymously.
"They thought I should see what was written about myself as [they believe] it was racist and they didn't agree with it," he said.
"I was so pissed off that I actually had to put it down, and then come back and make sure I was reading it right.
"At the end of the day, it was only karakia. I was asked to open and close the meeting, which is natural to me, and of course I did that in my reo. I do not translate my prayers because it is not for the people to hear; it's only for the man above," Rapihana said.
He believed the article was not only "racist and offensive" but not the way an invited guest should be treated.
He said no concerns were raised over his use of te reo at the meeting at the time.
Since posting the comments to his Facebook page on Tuesday, Rapihana said he had received an incredible amount of support which he was grateful for.
He said he would never attend another Grey Power meeting and would now lodge a complaint with the Race Relations Office.
Panadam said she had no issue with te reo Māori and had taken te reo classes but felt because 90 per cent of people at the meeting were not te reo speakers, Rapihana should have translated his words.
"You should translate what you are saying, it's just being polite," she said.
"There are Māori members in Grey Power and I asked them if they thought it (the newsletter) was racist and they said no."
Panadam claimed many people had thanked her for highlighting the issue.
When asked why she did not raise the issue with Rapihana at the meeting, Panadam said it would be the Grey Power president's place to request a translation and there was no time to raise it.
"It was not done with malice or anything, it was just highlighting a point," she said.
"I do not have a problem with speaking te reo. I don't have anything against te reo. I just wanted to explain to him that a lot of people do not speak te reo. If you're going to thank the guest speakers, you should thank them in a language they understand."
Whakatāne Māori rights activist Mawera Karetai said she was "disturbed" to read the newsletter but would welcome the opportunity to meet with Panadam to educate her on the use of te reo.
"To put this in context, I would like to remind people that when Europeans arrived in New Zealand, the majority of the population spoke te reo.
"Instead of learning the language, Europeans, through colonisation, forced Māori people to speak English.
"We have spent the last 200 years battling for our right to speak te reo. Keep in mind Europeans have also had 200 years to learn te reo," she said.
She said it was awful to suggest someone could not speak their native language in their native country.
"Shame on them."
The newsletter statement
"Greeting fellow members. Our public meeting on the "Health System Under the Microscope" held last month with Mr Sandy Milne, MBE, and Doctor Victor Luca, had a good turnout from our members and the public despite it being a long weekend.
"We had a representative from Opotiki District Council, councillor Louis Rapihana, who did the closing speech in the meeting. I would like to apologise to the members as I had no idea that councillor Louis Rapihana did not speak English, otherwise I would have got someone to interpret considering 90 percent of the attendees were non-Maoris.
"However, if this was deliberate, then it was an insult to both our speakers, neither of whom spoke Maori. Dr Luca could have easily given his talk in fluent Italian or Spanish, but he did not as his purpose was to get the message across to the people. Hence his talk was in English. What was councillor Louis Rapihana purpose?
"Coming from a multi-racial, multi-cultural and multi-lingual country where the politicians/leaders have played the race card for 62 years, it saddens me to see a public servant do so in this event. That's not the way to build communities and foster harmony. Now more than ever we need to build stronger relationships within our communities not put wedges in."
