Parliament’s appointment of former Transport Secretary Martin Matthews as Auditor General is now the subject of a political storm.

Matthews was Secretary of Transport when Harrison, a Ministry employee, created false invoices and stole more than $725,000 to pay off credit cards and her mortgage.

She has since been jailed for three and a half years.

But while NZ First Leader Winston Peters is calling for Matthews to be stood down, the Speaker has gone as far as to technically breach Parliament’s Standing Orders to defend him.

That appears to be because Matthew played a key role in the arrest of Harrison.

He was part of a Serious Fraud Office plot to lure her back from Canada where she had fled.

She has since been jailed for three and a half years.

Now there is a political row surrounding Matthews’ appointment last November as the new Auditor General.

NZ First Leader Winston Peters is calling for Matthews to be stood down and says the Prime Minister has washed his hands of the case,

“The PM and the State Services Commission have evidence aplenty that Mr Matthews did not react adequately to warnings of fraud, and Parliament was not told about the issue when he was appointed Auditor-General,” he said.


But both claims in the statement look to be incorrect.

Labour Leader, Andrew Little, is not so blunt.

He is writing to the Speaker seeking clarification about the way the appointment was made.

Labour’s Transport spokesperson, Sue Moroney, has asked why Harrison had been appointed in the first place when she was wanted in Australia (under another name) for similar criminal behaviour.

She has also asked why three Ministry staff were “restructured” out of their jobs after they raised concerns about Harrison.

Little said that Labour’s representative on the Officers of Parliament Committee which made the appointment, Trevor Mallard, had subsequently learned some new information which was what he was seeking clarification from the Speaker about.

Mallard declined to say what that information was when asked last night by POLITIK.

However in an unusual move – and one that technically breaches Parliament’s Standing Orders — the Speaker, David Carter, has gone public on how the Committee made the decision.

Deliberations of the Committee are supposed to be secret.

That secrecy is binding on the members of the committee and is taken so seriously by them that they are said to not even divulge to their party leaders what transpired behind the closed doors.

(That may be the reason for Mr Peters’ statement. He was not on the committee)

Along with the Speaker, the Committee members were: Tim Macindoe (National); Trevor Mallard (Labour) and Barbara Stewart (NZ First).

Carter told RNZ that MPs were “very aware” of the charges that had been laid against Harrison when they were considering Matthews for the position.

He said the committee invited the Serious Fraud Office for a briefing about how Mr Matthews had handled the situation.

“[The SFO] told the committee Mr Matthews had acted in an exemplary fashion from the moment he became suspicious of fraud and that his actions would assist the Serious Fraud Office to obtain a conviction, and that played out correctly.”

The SFO raised no concerns at all about how long it took ministry management to become aware of the fraud, said Carter.

That account was echoed in a more circumspect way by Mallard during the debate in the House over Matthews’ appointment last November.

I think it would not be fair for this appointment to proceed through the House without referring to what might be described as an elephant in the room, and that is a case that I will not refer to in any detail, but it involved Mr Matthews’ previous ministry,” he said.

“ All I want to say is that members of the committee looked into this very, very carefully, were well briefed on the issue, and came to the conclusion that Mr Matthews’ handling of the matter was described to us as having been exemplary. “

This fulsome praise of Matthews was from the Serious Fraud Office.

POLITIK has learned their briefing to the Committee revealed that Matthews had been working under their guidance after she fled to Canada last year and the SFO began its investigation.

The SFO began sequestering her property, including stopping her credit and bank cards, leaving her in Canada with no money and no alternative but to return to New Zealand to face arrest.

Matthews apparently played a key role in laying that trap.

Though the Speaker will be criticised for breaching the secrecy of the Committee he really had little alternative.

He could assist the debate even more if he released the evidence given to the Committee by the Serious Fraud Office.