Who dobbed in Feeley?

FIONA ROTHERHAM
Last updated 14:25 21/10/2011

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OPINION: When the nation toasts an expected All Black victory in this weekend's Rugby World Cup final, it's unlikely that Serious Fraud Office boss Adam Feeley will do so with champagne - at least with his staff.

Feeley has been under scrutiny for quaffing a $70 bottle of Bridgecorp Gosset champagne at a staff party in May last year and later distributing a biography of deceased businessman Allan Hubbard as a booby prize at a staff gathering last Christmas.

He was told off this week following an investigation by State Services Commissioner Iain Rennie who said there was no evidence Feeley had acted with dishonest intent although his behaviour was ill-advised.

It amounted to a slap over the wrist with a wet bus ticket and despite Feeley apologising, his critics insist he should have lost the job he's held for the past two years.

Are they right?

I think Finance Minister Bill English had it right in calling the affair  a "storm in a teacup". 

The champagne was left behind in the offices of the failed finance company and the Bridgecorp receiver said such items would usually be consumed by staff or binned.

Handing out copies of Hubbard's biography among a host of other books was rightly described by Rennie as "taking an unnecessary risk"  but it's a stretch to say that it has, in anyway, impacted investigations into Hubbard's affairs.

The head of the agency charged with rooting out fraud should not only be squeaky seen, but also perceived as such.

And he should have been more cautious given both the Bridgecorp case and Hubbard's financial affairs were still active.

In an emailed apology to Police Minister Judith Colllins that she released this week, a chastened Feeley said he was disappointed the ''lapse in judgement on my part'' had undermined his team's work.

So yes, he's been stupid. And yes, he's learnt a very public lesson.

But should a man with a previously unblemished record have his career wrecked over this? Heck, no.

These are not sackable offences.

Lurking in the background is a far more serious issue, in my view.

Obviously someone in his employ is disgruntled - so seriously that they were prepared to leak a series of emails on his actions to the media.

The SSC investigation could have also probed rumours of unrest among Feeley's staff following an organisational restructure last year. 

At its minister's request, the SFO's brief had been widened from investigating and prosecuting ''serious and complex fraud'' to focus on ''serious financial crime''.

As I understand it, some SFO staffers now question their ability to fully investigate shady companies and individuals.

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The rhetoric, as you'd expect, says differently.

In the SFO's 2010 annual report Feeley, brought in as a change agent, described the agency review as a "more streamlined approach to dealing with investigations and prosecutions'' and that many staff were "enthusiastic proponents".

Made a couple of years after Labour had threatened to chop the fraud-fighting operation altogether, the review was largely modelled on the SFO's UK counterpart.

In the annual report Feeley said with fewer than 30 operational staff, the agency couldn't sustain its previous workload. While it had in the past managed a high number of investigations and prosecutions, that had resulted in four to five years from an investigation being started to a prosecution being concluded.

Active cases were cut from 69 to 47 by making hard calls on cases most likely to secure a prosecution.

Currently the SFO has 19 cases under investigation and 32 being prosecuted.

The review included lifting the agency's media profile, undertaking more joint agency investigations, and for the first time using outside investigators.

Previously it had been fiercely protective of its in-house specialist skills and capabilities and media-shy.

Herald columnist Fran O'Sullivan suggested this week Feeley - who is known to ''shoot straight from the hip'' - would be wise not to go on a witch hunt within his office on the leaks which undermined his authority.

I think he has to, if he already hasn't.

For the SFO to be truly effective in capturing fraudsters it needs a leader supported, not undermined, by his own troops.

That's not a storm in a teacup.

- BusinessDay.co.nz

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