The case for and against John Tamihere

By AUDREY YOUNG

GOLDEN HANDSHAKE

The Prosecution

Mr Tamihere took a "golden handshake" of $195,000 from Waipareira Trust in 2000 after becoming an MP, despite having said on many occasions the previous year that he wouldn't take one.

The defence

It was not a "golden handshake" for the former chief executive officer but four separate parts including unpaid bonuses from two years, all outlined in a letter sent to Mr Tamihere on May 3, 1999, after the board of trustees approved it. The letter said the board agreed at an April meeting to make a payment totalling $195,000 in recognition of:

* Mr Tamihere's performance to June 30, 1998.

* Mr Tamihere's performance to June 30, 1999.

* Continuation of Mr Tamihere's employment from July 1, 1999, to October 31, 1999, where he was asked to concentrate on:

Progressing the memorandum of understanding with Ngati Whatua.

Progressing the establishment of Te Whare Wananga to the extent that it sped up the completion of the project, and maintains a quality product.

* An ex gratia payment for Mr Tamihere's contributions to Te Whanau o Waipareira.

The money was not paid at the time, and was recommitted to a board trustees vote in May 2000.

The motion was passed by a majority of nine, with three dissenting votes.

The ex-gratia payment may be described as recognition that Mr Tamihere was paid only $55,000 for six years (and $90,000 for four) as chief executive, while he took the trust from nothing to an $8 million a year multi-faceted service provider.

TAX MONEY

The prosecution

Whatever it is called, tax was not paid on the money.

The defence

Mr Tamihere had received 500 pay cheques from the trust, all with tax already deducted. Why would he think this one was any different?

As well, when New Zealand First leader Winston Peters told Parliament in July 1999 that the trust had privately approved severance pay - that is when Mr Tamihere said he wouldn't take it - Mr Peters disclosed the amount as $280,000 which, after tax, would be pretty close to $195,000. It is generally accepted that it is the duty of the employer to pay tax on lump-sum payments. The present chief executive and chairman of the trust have said the payment was net.

The prosecution

Mr Tamihere did not declare it as income to Inland Revenue.

The defence

Under law passed by National, not all taxpayers have to file a tax return. "Income incurred during the year 1999-2000 did not require a declaration to be made as long as the person who received the income had reason to believe it was taxed at source," Inland Revenue and Finance Minister Michael Cullen told Parliament this week.

EXPENSES

The prosecution

Waipareira paid $18,648 in Mr Tamihere's 1999 election expenses and his official declaration says he spent $16,991.50. That takes him well over the $20,000 limit.

The defence

The $18,648 is mentioned in a letter to Mr Tamihere from the chief executive in August 2000 setting out that the trust was going to pay Mr Tamihere $195,000 in a departure package. It says the trust would deduct $18,648 of costs incurred for election campaign expenses, which means Mr Tamihere paid that amount, not the trust. Without access to the Waipareira books, it is impossible to tell whether the $18,000 expenditure is part of the 1999 declaration of expenses to the electoral office or additional to it. The $20,000 limit applies to spending inside three months of an election; there is no limit outside it. In any event, the declaration cannot be challenged after six months.

VEHICLE

The prosecution

That Mr Tamihere took a free Toyota Landcruiser from the trust as part of his golden handshake. The trust was also forced to sell some of its assets to pay for Mr Tamihere's exit package, and was billed $2252 for the vehicle insurance which should have been declared on the ministerial register of gifts, interests and assets.

The defence

Mr Tamihere was a director of property investment company Westland Ltd, which is 46.39 per cent owned by the Waipareira Trust. The company was worth about $20 million last year. Westland paid lease payments for the vehicle as Mr Tamihere's director's fees until October 2002 when the vehicle was paid off by the company and given to him. When the trust re-approved the severance pay in 2000, the chief executive said it was more appropriate for the money to come from its commercial operation than the Government-contracted activities. The trust sold about $115,000 of Westland shares towards the payment.

PARLIAMENT

The prosecution

Trust chairman Eynon Delamere said some of the payment to Mr Tamihere was for "some things that we wanted him to achieve in Parliament" - which could be interpreted as suggesting corruption.

The defence

Mr Delamere has withdrawn his statement, apologising for creating any impression that Mr Tamihere's parliamentary duties were a condition of the payment. Everyone knows that Mr Tamihere entered Parliament with a mission to get more for urban Maori.

THE PM

The prosecution

Mr Tamihere not only took a payment he said he wasn't going to take, but he didn't tell the Prime Minister, Helen Clark.

The defence

None yet.