Newsroom

‘Buyer’s remorse’ over auditor-general?

A legal expert says the resignation of a former auditor-general raises worrying questions even if you believe he’s not blameless, Dileepa Fonseka reports.

Parliamentarians may have experienced “buyer's remorse” after a massive transport fraud came to light but a legal expert says their conduct raises worrying constitutional questions.

At a press conference on Monday former auditor-general Martin Matthews alleged he only stepped down from his role after being threatened with dismissal. 

“The substantive conclusion that he wasn’t a very good appointment, obviously Mr Matthews doesn’t agree with that but it doesn’t mean it’s an unreasonable conclusion."

Public law expert Eddie Clark from Victoria University said the committee seems to have gotten “buyer’s remorse” over Matthews’ appointment after more details of Joanne Harrison’s fraud at the Ministry of Transport - Matthews was previously chief executive there - came to light in a draft report by Maarten Wevers.

“The substantive conclusion that he wasn’t a very good appointment, obviously Mr Matthews doesn’t agree with that but it doesn’t mean it’s an unreasonable conclusion,” Clark said.

“The problem is that isn’t something the law says you can fire someone for.”

By law the auditor-general can only be dismissed for four reasons: disability affecting performance, bankruptcy, neglect of duty or misconduct.

Crucially, issues of neglect of duty and misconduct would only apply to an auditor-general’s current role and not any previous roles they held.  

Before his appointment as auditor-general Matthews was CEO at the Ministry of Transport during the time convicted fraudster Joanne Harrison siphoned off $758,546. 

Harrison reported directly to Matthews.

At a press conference on Monday, held in the wake of a Stuff investigation, Matthews defended his conduct and decried his treatment at the hands of a parliamentary committee. 

He and lawyer Mary Scholtens are petitioning Parliament seeking “redress” for what happened and legal changes to provide better safeguards for future auditor-generals. 

Defending his performance as chief executive

Matthews said the report a parliamentary committee received into his oversight of Harrison at the Ministry of Transport did not give him enough time to respond and also did not integrate his own responses to the facts.

“I did not know that Joanne Harrison was a fraudster when I was told that information [in 2014].” 

The draft report the committee received acknowledged the “significant” contribution of Matthews to the public sector but said the “troubling fraud [at the Ministry] has undermined Mr Matthew’s claim to serve as auditor-general”. 

It alleged Matthews failed to take account of the concerns of his senior staff around Harrson’s behaviour. 

The earliest of those concerns were raised in 2014 according to Matthews, but they were “compliance” issues not ones of fraud. 

And they were issues for which Harrison had a good explanation, he said.

“It seemed to me at the time from the information that was provided plausible explanations had been given, of course like everyone else I look at that very differently today but only now because I know she’s a fraudster.”

In one case Harrison covered her tracks by twinking out invoices, something Matthews accepted Harrison’s explanations for - she had said it was to protect someone’s privacy - but he also argued that the use of twink was not consistent with fraud. 

“There was an invoice with twinked out information, as you described it, just pause for a moment and think: that was the most unlikely action of a fraudster because it was going to draw attention to those invoices.”

The crucial turning point that caused him to look at those “compliance issues” differently was a revelation two years later that Harrison had already been convicted of fraud. 

At that point Matthews alleges he acted quickly to investigate Harrison’s conduct. 

“I did not know that Joanne Harrison was a fraudster when I was told that information [in 2014].” 

“Gun to his head”

His legal counsel Mary Scholtens QC said a metaphorical “gun was held to his head” by parliamentarians who threatened to seek his dismissal from the auditor-general role he later took up.

After receiving the draft report Martin alleges then-speaker David Carter told Martin that Parliament had lost confidence in him. 

At a meeting in August 2017 Carter reportedly told Martin that the committee intended to table to the Wevers report the next day on the grounds that he had a “disability affecting the performance of duty”. 

Scholtens has termed Martin’s treatment as “outrageous”. 

Other high profile figures in government and law have reacted similarly, leaping on board a petition by Matthews for redress. 

“The ability of a watchdog to piss off a government is quite significant..so that is why the protections that we have are as strong as they are."

Names signed on include former assistant auditor-general Robert Buchanan, public law expert Philip Joseph and constitutional law expert Kenneth Keith.

Matthews said the way he was pressured out of his role had worrying implications for the future. He believed it meant politicians who found an auditor-general or ombudsman “irritating” could do the same to them. 

“[To give them] the power to do that is to essentially give them the power to do remove a watchdog who is doing their job.”

If a watchdog were to be dismissed for such reasons then it should happen through a proper inquiry process, he said.

Scholtens put it another way: “The ability of a watchdog to piss off a government is quite significant..so that is why the protections that we have are as strong as they are.”

Clark said he wouldn’t go as far as calling Matthews’ case a “constitutional outrage” but said “it is very unusual”. 

The role of the auditor-general was heavily protected by the Public Audit Act - under which the auditor-general gets their powers. 

Clark said the aim of that was to protect the watchdog from political interference by making it difficult for politicians to dismiss them - even if they weren’t satisfied with their performance.

“The point of this [Public Audit] Act is you can’t get buyer’s remorse.“

Get it early – This article was first published on Newsroom Pro and/or included in Bernard Hickey’s ‘8 Things’ morning email of the latest in-depth business and political analysis. Get it early by subscribing now or starting a 28-day free trial.

Can you help our journalists uncover the facts?

Newsroom is committed to giving our journalists the time they need to uncover, investigate, and fact-check tough stories. Reader donations are critical to buying our team the time they need to produce high-quality independent journalism.

If you can help us, please donate today.

Comments

Newsroom does not allow comments directly on this website. We invite all readers who wish to discuss a story or leave a comment to visit us on Twitter or Facebook. We also welcome your news tips and feedback via email: contact@newsroom.co.nz. Thank you.

With thanks to our partners