GRAHAM ADAMS: Report into Mahuta family contracts leaves questions unanswered

GRAHAM ADAMS writes –  

It is ironic that the release of the long-awaited report into government contracts awarded to Nanaia Mahuta’s family has been overshadowed by an even bigger controversy over her role in a secretive attempt to entrench an anti-privatisation clause in the Three Waters legislation.

The publication of the review by Public Service Commissioner Peter Hughes on Tuesday must have come as a profound relief to the embattled Minister of Local Government.

Mahuta particularly welcomed the statement that Hughes had found “no evidence of favouritism, bias, or undue influence over agency decisions in relation to KAS (Ka Awatea Services) or KC [Kawai Catalyst] due to the connections with the minister”.
Ka Awatea Services is owned by Mahuta’s husband, Gannin Ormsby, while Kawai Catalyst is owned by Gannin Ormsby’s nephew and his wife — Tamoko and Waimirirangi Ormsby.

The government contracts awarded to the consultancies by four government departments — Kāinga Ora; the Ministry for the Environment; Department of Conservation; and the Ministry of Māori Development / Te Puni Kōkiri — totalled more than $200,000.
While the report did not find any evidence of favouritism or bias towards the companies, it did find serious flaws in how the public service deals with conflicts of interest — including the astonishing fact that Kāinga Ora did not even ask about any conflicts of interest during its procurement process with Ka Awatea Services.

It recommended
“… tighter processes for assessing perceived conflicts of interest…, including where conflicts involve ministers, and that procurement practices need to improve, in particular the way those agencies manage contracts under $100,000.”
After the report was released, Mahuta said that it
“… draws a line under [sic] the sand in terms of all the issues that have been raised about me”.
Unfortunately, that claim cannot be taken at face value.

First, it is worth noting the adage:   
“Absence of evidence is not the same as evidence of absence.”
Furthermore, it was obvious from the moment the review was announced that Mahuta’s behaviour would not be scrutinised. The commissioner could only look at the behaviour of the government departments and their procurement processes. He has no jurisdiction to inquire into ministers’ actions.

As the report recorded:
“The actions of ministers, the directors of KAS and KC, and members of the public, were outside the scope of this review.”
It also remains unclear how the commissioner could accurately judge bias — unconscious or conscious — that might lead public servants to favour relatives of a powerful minister in awarding contracts.

In discussing a grant awarded to KAS for $28,300 (excluding GST), the commissioner summed up the problem:
“How could the public feel confident that the application would be assessed purely on its merits and would not be influenced by ulterior motives, such as loyalty, favouritism, or prejudice?”
It is, of course, an article of faith in the Public Service that everyone suffers from biases — particularly with regard to minority groups and women — and it has programmes to expose them and root them out.

The service’s anti-bias work programme Papa Pounamu, designed to promote “diversity and inclusion”, makes it clear:
“We all have biases, and they can be complex and challenging to identify and manage. There are many different types of biases, both unconscious and conscious.”
Clearly, in such an ideological milieu, the commissioner asserting he can find “no evidence of bias” is pointless to the extent of being risible.

This in no way, of course, implicates Mahuta in having influenced the granting of the contracts herself but implicitly denying bias among the public officials responsible for awarding them seems presumptuous.

Also, three of the contracts were not openly advertised, so it is impossible to know in these cases whether KAS and KC were favoured over better-qualified contenders given there were no competing tenders.

In claiming that the report “draws a line under the sand in terms of all the issues that have been raised about me”, Mahuta has also overlooked two significant roles given to members of her family. Both fell outside the commissioner’s purview.

One was Mahuta’s appointment of her young relative by marriage, Waimirirangi Ormsby, to the He Puapua Working Group in 2019 when she was Minister of Māori Development.

When she was quizzed by a journalist in September about the appointment, Mahuta tried to shift responsibility for the decision-making to the ministry.

However, in late October, details received under the Official Information Act showed Mahuta had put Ormsby on a list of candidates for the paid position herself.

She declared the conflict of interest late in the process at Cabinet’s Appointment and Honours Committee, chaired by Jacinda Ardern, saying:
“One of the candidates I intend to appoint is related to me by marriage.” 
But the minister said she didn’t believe the connection was “significant”.

Act Party leader David Seymour, however, concluded that the appointment meant Mahuta was in “clear breach of the Cabinet Manual, overseeing the appointment of her niece to a paid position for which she [Mahuta] had ministerial responsibility”.

Another apparent conflict that fell outside the scope of the commissioner’s report lies in the ongoing working relationship that Mahuta — as the minister overseeing the Three Waters reforms — has with her younger sister.

Tipa Mahuta was made chair of the Māori Advisory Group for the water regulator Taumata Arowai in May 2021 after her sister had handed the power of appointment to Kelvin Davis, Minister for Māori Crown Relations, in February. That power was handed back to Nanaia Mahuta in June 2021.

However, that temporary transfer doesn’t solve the problem of the continuing conflict of interest between the minister and her sister as they work together on Three Waters.

To mitigate “any perceptions of a conflict of interest”, Mahuta has said that any meetings she attends that require the chair of the Māori Advisory Group to be present will also be “attended by the Taumata Arowai board chair”.

In short, the minister is in the unusual position of effectively needing a chaperone to meet with her own sister on government business.

The ongoing storm over Mahuta’s role in the constitutional crisis sparked by Labour and the Greens voting late last month to entrench an anti-privatisation measure in the Water Services Entities Bill will command the attention of opposition MPs for the immediate future.

Nevertheless, questions about Mahuta’s appointment of her niece and her working relationship with her sister will linger.

  • Graham Adams is an Auckland-based freelance editor, journalist and columnist. This article was originally published by  

2 thoughts on “GRAHAM ADAMS: Report into Mahuta family contracts leaves questions unanswered

  1. Seems Peter Hughes didn’t look very closely. The evidence seems to apparent to everyone but Peter Hughes. As the saying goes ” There’s none so blind as them that don’t want to see.”

    Liked by 1 person

  2. This minister is unfit to hold any ministerial warrant.

    “Corruption” is not a word liked by most media, and it seems that to level this accusation against Mahuta will qualify a racially motivated hate speech, We’re it levelled at an opposition member the media will run with it for and milk it as long as possible.

    The worse aspect is not the awarding of modest contracts, but the appointments of close relations, and Morgan, made to co governance entities.

    SFO, Auditor General, NZ Police need to mount a proper investigation, the SSC “investigation “ is a transparent whitewash, and should be regarded by any observer as such.


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