Parliament’s efforts to untangle the forced resignation of the former Auditor General, Martin Mathews, now includes allegations that he deliberately concealed aspects of his past from the Select Committee that recommended his appointment in 2016.
A review of Mathews’ resignation from his post as Auditor General less than a year after he was appointed has become a constitutional imbroglio involving a former Prime Minister, a retired High Court Judge, legal academics, and a former Chief Executive of the Department of Prime Minister and Cabinet.
And they are just submitters and witnesses.
The Committee considering the matter, the Officers of Parliament Committee, is chaired by Trevor Mallard, a member of the Committee which made the original recommendation, and the-then chair, former Speaker David Carter is now a submitter to his old committee.
Mathews is seeking undefined “redress” for his forced resignation and has petitioned Parliament for that.
It is the hearings on that petition, another of which took place yesterday, which have produced a mountain of claims and counter-claims and learned debate about whether Officers of Parliament can be forced out once they have been appointed.
As things stand, the Auditor General is appointed for a single term of seven years which Mathews was in February 2017.
But within months of that appointment it became clear that he had been CEO of the Ministry of Transport while a staff member perpetrated a $700,000 fraud on the Ministry.
In May,207, he offered to brief Parliamentary Party leaders on what had happened but in what now appears a portent for how things would play out, two leaders, Andrew Little and Winston Peters, refused his offer.
Little wrote to the Speaker saying the Speaker should review Mathews’ appointment as Auditor General in the light of new information which had come to hand.
“There is a question about whether the appointment panel (the Officers of Parliament Committee) had access to that information,” he said.
“And if they didn’t, then I think they’ve got to review the appointment and ask themselves whether – if they’d had that information – they might have made a different decision.”
That letter, in particular its reference to how much the Committee knew when they appointed Mathews, can now be seen as defining the whole issue.
Mathews’ critics, who included the-then Labour MP, Sue Moroney, alleged that he had not only ignored the activities of the fraudster, Joanne Harrison but had demoted three staff whistleblowers.
On July 25, Parliament held an urgent debate on a report into the treatment of the whistleblowers.
Little said: “I saw in this report too much acceptance of a single stream of advice from a senior public servant to the chief executive—a senior public servant who turned out to be corrupt and a fraudster.”
NZ First MP Clayton Mitchell said the buck stopped at the top of the Ministry.
“Martin Matthews certainly does need to take a big proportion of responsibility for that,” he said.
By August 2017, the same Committee as that now considering Mathews’ petition, the Officers of Parliament Committee, sought advice from the then Solicitor General, Una Jagose, as to whether they could now fire Mathews given the revelations that had begun to surface about his role at the Ministry of Transport while the fraud was being conducted.
She replied he could be dismissed “only by the Governor-General, on an address from the House of Representatives, for disability affecting the performance of duty, bankruptcy, neglect of duty, or misconduct.”
Those conditions applied to how he was performing as Auditor General, not how he had performed as Secretary of Transport.
Jagose, however, also advised that If the statutory criteria were applied one possibility would be for the House to conclude that the concerns about the Auditor-General’s performance in his previous roles “were such as to amount to a disability affecting the performance of duty. Such concerns might inform a conclusion by the House that it lacked confidence in the Auditor-General, to the point where it was prepared to recommend his removal.”
The Committee had commissioned the former diplomat and Chief Executive of the Prime Minister’s Department, Sir Maarten Wevers, to prepare a report on Mathews’ performance at the Ministry of Transport.
Jagose said Wevers;’ report would be critical.
“Whether a proper basis exists for removal will depend on the information and conclusions reached in Sir Maarten’s review, and the view of that report taken by the Committee, and the House,” she said.
But her letter also contained a warning.
“The risk of a successful challenge could be moderated by ensuring that a fair process is adopted by Sir Maarten, the Committee and the House, and establishing a clear and proper basis for removal,” she said.
Mathews is now contesting that very issue; he alleges that he was treated unfairly and was denied natural justice.
Wevers report was damning.
“Ms Harrison’s fraudulent behaviour would have been prevented had the Ministry’s internal controls been upheld and not subverted by Mr Matthews’ misplaced trust in a senior colleague,” he said.
In a section of his report headed “Integrity”, Wevers said: “Of particular concern was the unwillingness of Mr Matthews to acknowledge what had happened at the Ministry.
“He did not refer to the fraud at all in the briefing to the incoming Chief Executive (although he did discuss it informally with Mr Mersi).
“Neither was it mentioned in his application for the role of Controller and Auditor-General.
“Further, he did not address the issue appropriately during the recruitment process, including in the interviews with the Select Committee, and in his comments seems to have focussed entirely on his actions after April 2016.
“He did not discuss at all what had happened during the prior three years.”
Wevers was asked by the current Officers of Parliament Committee to review some aspects of his report, and his response was tabled yesterday.
He said he did not know that the 2017 Committee was considering Matthews’s possible dismissal or the grounds for such a step.
“It was never indicated to me from any quarter that this might be something the Committee was considering or could consider,” he said.
The 2020 Committee chair, Trevor Mallard, asked Wevers about the matters raised in the Integrity section.
He said these claims were strongly contested by Matthews “who in his petition, details points in the recruitment process at which he disclosed the fraud issue, and by MPs from the Officers of Parliament Committee at the time of recruitment, who confirm their knowledge of this matter.”
Wevers said in his response yesterday that he was surprised to find that Matthews had made no reference to the fraud in his application for the position of Auditor-General, which was submitted on July 20, 2017.
“At that point, Mr Matthews was aware that the fraud storey was about to appear in the media, and had just advised the executive search agency, Jackson Stone, of that,” said Wevers.
“I find it difficult to understand why, in his application, Mr Matthews did not refer to, acknowledge, or offer to tell the Committee his version of what had transpired.
“The omission gives the impression of intended concealment.
“He knew that the matter would become public by the time he might be offered an interview, and would surely have anticipated the matter coming up if he were interviewed.
“I understand from other published records that in the event, a member of the Committee asked him in the interview to comment on the “elephant in the room”.
“That should not have been necessary.”
Wevers said that when Mathews did discuss the fraud, he talked only about the events that had happened once it had been detected, not about his management of the Ministry while the fraud was occurring.
“I do not contest that Mr Matthews discussed the fraud with the executive search agency, or that Members of the Committee were aware of the fraud issue.
“My discussions with Committee members indicated, however, that they had only really heard about Mr Matthews’ actions from April 2016 to track down the fraud, once he had been alerted.”
Wevers concluded: “In my view, had Mr Matthews chosen to refer directly to the fraud in his application, had he front-footed the resulting discussion; taken ownership of what had happened; acknowledged the fraud loss and the faults exposed in the two reports, things may have been different. But that was not the approach he followed. Serious questions of judgement and integrity, in my view, therefore arose.”
Mathews has previously told the Committee how then-Speaker, David Carter, gave him an ultimatum on August 2, a day after the Solicitor General’s letter, advising him to resign or face a vote of no confidence in Parliament.
“ To be very clear, on August 2 2017, I was told for the first time that Parliament had lost confidence in me. I was not told the basis for that loss of confidence, nor was I given the opportunity to respond to those claims,” Mathews told the Committee yesterday.
“I was simply given an ultimatum.
“I was told to resign or be sacked and given six hours to decide.
“It seems now, based on the former speaker’s testimony at the last hearing, that the claimed loss of confidence was largely based on perceptions from the media and political narrative at the time.”
Mathews said Wevers’ report was highly contested.
“It was unsafe to rely upon,” he said.
“It is riddled with errors of fact and judgments that are inexplicable.”
His lawyer, Mary Scholtens, argues that because he was not given a chance to respond to the report, he was denied natural justice and should, therefore, be entitled to redress.
The Committee has still not concluded its hearings and deliberations.
This could go on for a while.
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