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A quarter-million dollar scandal

Feb 4, 2014 Politics

The latest outrage in the Len Brown affair scandal is the price of the inquiry.


The cost of the EY report into mayor Len Brown’s affair with Bevan Chuang has come in at around $250,000. That’s the word from reliable, well-placed sources close to the council.

It’s an outrageous amount, and the reason it is so high can be traced directly back to the council’s then-CEO, Doug McKay. It was McKay who ordered the inquiry and then allowed it to blossom into an investigation far in excess of what was originally intended.

He earlier stated the inquiry would cost around $75,000. Then in December, he told the council the final figure was not yet known but it would be “over $100,000”. The final figure of a quarter of a million dollars is so far above these estimates, it begs the question: why did he provide such low earlier estimates?

It’s never been clear why McKay ordered the inquiry from EY, formerly Ernst & Young. The more  common procedure for investigating financial activity by a government body or individual is to ask the Auditor General to step in. The AG has statutory powers, is independent of political influence, and is experienced in dealing with accusations of wrong-doing.

McKay, however, with no prior government experience, went to a private firm. Metro understands there was considerable debate over the terms of reference. In the end, the terms covered the use of council resources and whether Brown had used his position to secure any advantage with council for Chuang. But they also contained an “any other matters” clause.

To aid the inquiry, McKay supplied EY with three years’ worth of emails from the office of the mayor. There were over a million: effectively, every email sent by or to the mayor and everyone on his staff was handed over to the inquiry. With the exception of the mayor, it appears they were not told this happened, and nor were any of the people those emails were sent to or received from.

There are privacy issues. The emails included Len Brown’s communications with his external political advisers – who, like Brown himself, were not employees of the council. There are some similarities here with last year’s inquiry into the leak of a cabinet paper, involving journalist Andrea Vance and the politician Peter Dunne – neither of them employees of Parliament. The head of Parliamentary Services, Geoff Thorne, lost his job because he handed Vance’s swipe card and phone records over to the inquiry and did not advise her.

The EY report found that Len Brown had not misused his office in relation to his affair with Bevan Chuang.

But it also reported, in great detail, the habit of the mayor and his family of staying at hotels in the city. These hotel stays had nothing to do with Brown’s affair with Chuang, yet there was a public interest in telling us about them, because we learned the mayor has received favours (in the form of free rooms) from Sky City. We now know he cannot usefully contribute to the debate about Sky City’s plans to build a convention centre. He was wrong to accept those rooms, and it is very surprising his judgment was so poor he did not understand that.

But let’s keep it in perspective. Len Brown is not a venal or systematically corrupt politician. That’s the big news from the report.

Doug McKay resigned from his position as CEO late last year (this was announced before the scandal broke and is unrelated to it). He is widely regarded as having done a good job running the council during its first term as a super city, and until the scandal broke he worked very closely and very well with the mayor.

But his decision not to go to the Auditor-General was unfortunate. As for the fact that under his watch the inquiry turned into an exercise costing ratepayers a quarter of a million dollars – that’s appalling.

We’ll have more on this in the next issue of Metro.


Photo by Jane Ussher.


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