Cash flows: How millions of dollars of Treaty money is pouring into Waikato River clean-up projects

The Waikato River at Rangiriri, where the Tainui Development Authority is doing restoration work.
DAVID WHITE / FAIRFAX NZ

The Waikato River at Rangiriri, where the Tainui Development Authority is doing restoration work.


On a sunny Wednesday morning in November, people trickle into the Otorohanga Club for the Annual General Meeting of the Waikato River Authority (WRA).

Its job is to allocate $250 million of Treaty settlement money to clean up the country's longest river.

The 10-member board is seated at the front, headed by one of the most recognisable and polarising figures in Maoridom, former NZ First MP Tukoroirangi Morgan, he of the expensive underpants.

To Morgan's left is his Crown-appointed co-chair, John Luxton, a cabinet minister in Jim Bolger's National government.   

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To his right is Roger Pikia, an iwi appointee whose investments as chairman of the Te Arawa River Iwi Trust are the subject of a forensic audit.

After speeches and presentations the floor is opened to questions, and a formidable-looking woman takes the microphone.

This is Tania Martin, former Tainui tribal parliament chairwoman who was sacked by the Maori King after questioning tribal spending under Morgan.

Martin has some awkward questions. She wants to know why fees paid to Morgan, Luxton and Pikia, chair of the authority's investment committee, have jumped 10-fold.

A couple of years ago they were paid between $3762 and $5600 each, but the annual report shows that has risen to between $42,500 and $46,000, she says.

Waikato River Authority co-chair Tuku Morgan, centre, and investment committee chair Roger Pikia, right, at the AGM.
DAVID WHITE / FAIRFAX NZ

Waikato River Authority co-chair Tuku Morgan, centre, and investment committee chair Roger Pikia, right, at the AGM.

And Martin questions why there is no mention in the annual report of Morgan being a director and shareholder of a company, Tainui Development Authority (TDA), which has been awarded a clean-up contract worth more than $1m.

Chief executive Bob Penter explains that a review found that as chairs, the men are entitled to extra fees they haven't been claiming. The additional fees are one-off back payments, he says.

Advice was sought from KPMG and Audit NZ and both confirmed the payments were appropriate.

Morgan's interest in TDA is declared at the start of every board meeting, Penter says, and he removed himself from the meeting when the TDA grant application was considered.

Audit NZ is "thoroughly comfortable" with the situation.

Martin says after the meeting she feels she was quickly shut down and is not happy with the response to her questions.

She's concerned about a lack of transparency, that some people might be "clipping the ticket" and a lack of consultation with iwi.

Millions of dollars are flowing into Waikato River clean-up projects.
ALISTAIR HUGHES

Millions of dollars are flowing into Waikato River clean-up projects.

Other sources have expressed concern that large "pakeha" organisations appear to be getting money at the expense of Maori.

WHO'S GETTING THE MONEY?

The Waikato River Authority fund was established as part of the Crown's Waikato River Treaty settlement with Tainui and other river tribes. Since 2011, $31m has been distributed to more than 200 projects.

The rest of the money will be given out over 30 years, but it's only a fraction of the estimated $2 billion total cost of cleaning up the river. 

A five-year report card on the overall health of the river released by WRA earlier this year gave it a lowly C+ grade, with warnings that it will be decades before real improvement is seen.

Large grants have gone to organisations such as DairyNZ to help farmers reduce pollution, Niwa for restoration projects and fish studies and the Waikato Regional Council to develop catchment strategies.

Car bodies are among the objects that will be removed as part of Waikato River clean-up projects.
DAVID WHITE / FAIRFAX NZ

Car bodies are among the objects that will be removed as part of Waikato River clean-up projects.

Individuals and families have also received money for re-planting projects - former league star Tawera Nikau's family trust has received more than $500,000 of grants for the restoration of a lake and wetlands around family land at Ohinewai - along with a number of iwi trusts.

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One of the biggest single grants was to TDA, which was awarded $1.2m in the 2013 funding round for a planting and fencing project along the river between Huntly and Rangiriri, in association with the Kanae Kakariki Trust, a small Huntly-based operator.

The money is drip-fed as milestones are reached, and the project is about half completed. More than 100,000 natives are expected to be planted.

TDA is registered as a limited liability company, with Morgan and Te Awamutu accountant Peter Rogers as directors and Morgan and his mentor and former electorate chair Timi Maipi the shareholders.

Kanae Kakariki had previously won large WRA clean-up contracts in its own right, including $300,000 in 2011, but now comes under TDA's "umbrella".

It was established by the late Dick Green, a respected kaumatua and master carver who was passionate about the river, but is being de-registered by the Charities Commission for failing to provide annual returns.

Green's daughter, Te Winika Nikau, whose husband Victor is the project manager for Kanae Kakariki, says after her father's death about four years ago the paperwork lapsed. They were looking at re-registering.

Tuku Morgan, co-chair of the Waikato River Authority, talks to Tania Martin, who raised questions about his links to a ...
DAVID WHITE /STUFF

Tuku Morgan, co-chair of the Waikato River Authority, talks to Tania Martin, who raised questions about his links to a company which won a WRA contract.

She says the trust is now sub-contracting out river clean-up work. 

It has come under TDA's umbrella so it can focus on planting work and TDA can take care of things such as scoping and feasibility studies.

Besides some delays in receiving payment because of the extra level of management, the structure has worked well, Nikau says.

Ever the dissident, Martin questions whether TDA and Kanae Kakariki have the necessary expertise to be awarded so much money. 

Brian Cornish, a consultant agronomist who put together the trust's project plan for its first funding application, is surprised to hear about the new structure.

Cornish, who was found guilty of forging dairy cattle export documents in 2008, says he volunteered his time to the trust and had hoped to have an on-going role.

"The original concept plan that I wrote was that Kanae Kakariki would manage it's own affairs. 

"It had experience with bringing young people through for practical skills training. I was not aware of any other entity that was hovering on the outside of that."

Cornish says he has yet to see much progress.

Waikato River Authority co-chairs John Luxton, left, and Tuku Morgan on an inspection of the river.
CHRIS HILLOCK / FAIRFAX NZ

Waikato River Authority co-chairs John Luxton, left, and Tuku Morgan on an inspection of the river.

"I've not noticed any significant difference when I drive alongside the Waikato River and I guess that's a telling point."

Labour MP and Tainui member Nanaia Mahuta questions why Kanae Kakariki joined TDA when it had established its own credibility with various government funders.

"They were doing a lot more around training and turning young people's lives around, now they've changed their operations," she says.

Mahuta says it surprised many when TDA won the contract.

"Everyone raised eyebrows when it happened because they all says 'well hang on, isn't that a conflict?"

TUKU'S 'POST OFFICE'

Morgan rocks up to the AGM in a black-four wheel drive and dark sunglasses and is happy to answer a reporter's questions.

Ever since he went on a clothes shopping spree with Aotearoa TV Network money in the late 90s - an $89 pair of boxer shorts the purchase that most titillated reporters - he has had to fend off questions around expenditure of public and tribal money.

Recently appointed president of the Maori Party, he says the questions about his involvement with TDA are a Labour plot.

Morgan says TDA has a company structure but is run as a registered charity.

It acts solely as a "post office", he says, receiving grant money from WRA which then goes to Kanae Kakariki to carry out the work.

"They get all the money, they are the ones dong the clean-up, we don't get any money, never have."

Great work is being done he says, with more than 10,000 plants established.

He says he acts as a "bare trustee", receives no personal benefit, and has never received any fees.

He later issues a statement clarifying that he and another trustee were paid $12,000 each in 2013 to cover expenses such as mileage. There will be no such fees in future.

He also clarifies that not all of the money has gone to Kanae Kakariki - TDA has also paid thousands of dollars to various environmental consultants who provide technical expertise.

Why does he feel it was necessary for TDA to take over management of Kanae Kakariki's funding?

"TDA was set up to assist provider trusts with contracting and financial accountability. They did not have the infrastructure or skill to do this on their own."

Morgan points out that other WRA board members have declared conflicts of interest - Luxton was former chair of DairyNZ which has received more than $4m in funding.

Luxton says all conflicts have to be declared. "We've gone to a lot of trouble to make sure we meet the auditor's requirements."

He didn't realise Morgan is a shareholder of TDA, he says.

Meanwhile, the other shareholder of TDA, Timi Maipi, has stepped down from board. 

Maipi says TDA tried to help Kanae Kakariki because it lacked the "infrastructure" needed for such a big contract, but TDA probably hadn't given the trust as much support as it needed.

His advice now is for Kanae Kakariki to go it alone.

Maipi says Morgan might have a conflict, but he is only trying to help create opportunities for his people.

"The majority of people cleaning this river are pakeha. There's a lot of pakehas because they got the big dollars and strong infrastructure.

"It's our river, we wanted to provide an opportunity for our unemployed to be creative and be part of the river clean-up. That was why I joined [TDA]."

'HUGE PAKEHA CONSULTANTS'

Susan Cullen was TDA's volunteer executive officer until she resigned and moved to Southland.

She made headlines a decade ago when it was revealed companies she owned had earned more than $74m from contracts with Te Wananga o Aotearoa, headed by her father Rongo Wetere.

Cullen says Morgan's vision is to provide a bridge between big funding organisations like the WRA and grassroots organisations, but it has been frustrating.

There is a "humungous" amount of compliance work involved in river clean-up projects, she says.

Cullen says she dedicated 10 hours a week for three years to TDA work and even put in almost $100,000 of her own money to get the river project up and running, before WRA funding kicked in.

She says Maori groups seem to be expected to volunteer their time, while "bureaucrats" on the river authority and regional council are paid for doing the same work.

"Compliance rules mean only local authorities can meet requirements to get money to do a job, so the money gets circulated back to government," she says.

"And there are these huge pakeha consultants who are paid hundreds of thousands of dollars for their advice.

"There's something wrong with the system. Tuku is trying his best to navigate the system and provide opportunities for our people, but he's as tied up as the rest of us."

Hori Awa, whose Waahi Whaanui Trust has received money for a clean-up project in collaboration with Solid Energy, says one of the biggest concerns is that district and regional councils have been dipping into the WRA fund.

"They should not be getting those contracts - they've got their own resources to do their own work," he says. "They're taking work off people who want to do it."

Auckland University anthropologist Marama Muru-Lanning, whose book Tapuna Awa explores issues around governance of the Waikato River, is skeptical about the amount of money on offer.

"One of the ways that people can make claim to the river now is by saying they are going to clean it up. They are being the kaitiaki," she told the Waikato Times.

"There is a lot of the talk around 'let's clean up the river, let's clean up the river'. And there is a lot of money passing hands."

She believes the WRA has alienated communities.

"For years, they were the kaitiaki (guardian) of their patch. Now you've got this layer of bureaucracy and you've got these leaders wanting to direct them."

IWI GET LESS THAN HALF OF GRANTS 

Penter, the authority's chief executive, rejects any suggestion Maori groups have missed out.

Any group can apply to the WRA's Waikato River Clean-Up Trust for money, he says.

In 2016, $1.93m was awarded to 14 projects being undertaken by iwi or marae-based organisations, from a total allocation of $4.4m.

Only one iwi applicant failed to secure funding.

While training and development of Maori is not an explicit purpose, "the funding does provide a significant opportunity to do this" and the trust places a strong emphasis on projects that contribute to "capacity building" within iwi.

Penter says most of the projects the Waikato Regional Council has received money for have been on behalf of iwi, community groups or private landowners.

In some cases these groups dobn't have the ability to do the project management and so the council applies on their behalf and also contributes up to 35 per cent of the cost. 

As for TDA, Penter says its purpose is to apply for funding and oversee projects.

"The authority has encouraged groups to collaborate in order to best respond to the size of the restoration task ahead.

"This approach has the potential to generate efficiencies with one application lodged rather than multiple applications carrying similar overheads."

Mahuta says Penter and the board see themselves at arms's length from iwi, whereas iwi see it differently.

"There are questions, definitely within the iwi, about the extent to which the River Authority helps to support iwi aspirations for the clean up."

She hopes Morgan will be more open in future.

"People are concerned he is conflicted, and he doesn't do enough to make it clear.. he's keeping everything fairly secret."

 - Sunday Star Times

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