Serious Fraud Office rejects Auckland Council fraud complaint but flags luxury trip

Thursday, 18 July 2019

The Auckland Council Civic Administration Building and surrounding area will undergo an up to $300 million redevelopment.

The Serious Fraud Office has found no grounds to investigate allegations of corruption laid by mayoral candidate John Tamihere, against Auckland Council's development agency Panuku.

However, the SFO has found a luxury trip taken by Panuku's chief executive Roger MacDonald, as a guest of a developer, did risk 'creating a perception of impropriety'.

MacDonald was flown by private helicopter to Northland's Bay of Islands, to sail on the luxury yacht of Tawera Group chair Mike Mahoney, whose company had agreed to buy the council's former Civic Administration Building.

Auckland mayoral candidate John Tamihere made allegations of corruption against Auckland Council's development agency, Panuku

The chair of Panuku, Adrienne Young-Cooper, said the trip had been properly approved at the time, but the agency will now review its hospitality rules.

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Tamihere complained to the SFO last month, over confirmation of the 2016 deal to sell the former Civic Administration Building on Aotea Square, to Tawera Group for redevelopment.

The mayoral challenger considered the $3 million price too low.

'This deal stinks and is either incompetence by officials, or worse corruption within the council,' Tamihere said in a media release.

The SFO said it found no reason to suspect fraud, corruption or bribery on the part of Panuku or its agents.

Tamihere said the finding was 'an amazing turn around in regard to an investigation considering the complexity of development agreements and commercial deals of this size'.

'When elected mayor, an investigation into this particular deal will be first item on the agenda for my Integrity Unit,' he said.

But the investigator did flag a trip taken in January 2017 by Panuku's MacDonald, as a guest of Tawera.

MacDonald followed procedures in having the trip approved by Young-Cooper's predecessor as chair of Panuku, declaring its value as $300-$500.

Young-Cooper told Stuff he was unaware at the time that he would be flown in Mahoney's private helicopter from Auckland to the Bay of Islands, for the arranged sailing on Mahoney's yacht in the Millenium Cup race.

MacDonald stayed overnight in a motel and was driven back to Auckland the following day.

'In the circumstances we consider that its acceptance was ill-advised,' wrote the SFOs General Counsel Paul O'Neil.

'We accept their finding, and we are using the opportunity at their (SFO) suggestion to review our procedures,' Young-Cooper told Stuff.

She would not say whether she would have approved the trip under the same circumstances.

Tamihere was vocal in his distain for the trip.

'In the United States of America, that is an immediate charge called graft and if the trip did take place, the CEO would be sacked and more than likely imprisoned,' he said.