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The Government has been accused of making it harder for investigators to probe high-profile finance company collapses on the eve of a controversial move to scrap the Serious Fraud Office.
Parliament's law and order select committee is today expected to recommend the office's abolition, as part of the
Government's plan to set up a new organised crime agency within the police.
The committee's chairman, NZ First MP Ron Mark, has previously expressed concern about the move, but it is believed his party's leader, Winston Peters, has agreed to support it.
Mr Peters has never forgiven the office for its decision not to prosecute those involved in high-profile investigations, including the "Winebox" tax case; allegations of corruption in the fishing industry; and claims of irregularities in National Party funds.
But supporters of the office say Mr Peters' stance is unfortunate, given its relatively successful track record in cracking down on white-collar crime, and its current investigations into the failure of investment companies Bridgecorp, Blue Chip, and Five Star Consumer Finance.
The fact that it has also been asked to investigate claims about NZ First's own funding has placed the office in a tricky situation.
SFO director Grant Liddell has confirmed a decision on the issue is likely to be several weeks away.
It is not clear whether the Government has been able to secure enough votes for the move, or whether it will have enough time to pass the necessary legislation before the election.
Although the National Party likes the idea of the new organised crime agency, it does not want to see the SFO abolished to get it.
Its justice spokesman, Simon Power, believes Labour has misread the public mood on the issue, and says he will be angry if it goes ahead. "You are dealing with a fundamental constitutional change to the way we deal with fraud in New Zealand," he said. "At a time when finance companies are falling over at an alarming rate, it's irresponsible of the Government to try to force legislation like this through the House right before an election."
Uncertainty over the office's future has prompted some staff to leave, and it has not yet replaced a specialised forensic accountant.
Former SFO director David Bradshaw has been scathing of the plan, which he believes has been driven by the Government's desire to crack down on gangs.
He also believes new investigative procedures that will be put in place are a test run for new search and surveillance powers the Government has said it intends to give to all police.
