Sacked chairman calls report a whitewash

A report on conflicts of interest at Hawke's Bay District Health Board skirts key issues and "completely exaggerates" board failings in an attempt to clear Peter Hausmann of any wrongdoing, its former chairman says.

Kevin Atkinson, sacked with the rest of the board last month, says the "weasel word" report is a "whitewash in every sense of the word". He urges the auditor-general to investigate.

But Health Minister David Cunliffe says the report, which criticises the board for failing to meet basic conflict of interest procedures and highlights major rifts with senior management, justifies his decision to sack it.

"This is a comprehensive report that shows a failure of governance systems and a board that was highly dysfunctional ... it does show that a clean start was needed for the sake of the people of Hawke's Bay."

The 190-page report, made public yesterday, is highly critical of the way the board managed conflicts of interest with other board members, particularly pharmacy owner Peter Dunkerley, who the report uses as an example of a conflicted board member.

It criticises the failure of Mr Hausmann, managing director of Healthcare NZ, to properly disclose to the board his involvement with DHB management in developing a bid for a multimillion-dollar community services contract and a $1.1 million contract with another company he is involved with, Wellcare Education.

The report describes Mr Hausmann's involvement in the community services contract as "unusual", but criticises Mr Atkinson for failing to ensure Mr Hausmann made a more detailed disclosure when he joined the board.

It says Mr Atkinson was aware of Mr Hausmann's early involvement in the community services contract, and should have ensured it was declared.

The report, the culmination of an eight-month review ordered after allegations were made about Mr Hausmann, says procedures for dealing with conflicts of interest did not meet best practice standards because board members had no proper guidance.

But Mr Atkinson accused the review panel of misunderstanding how conflicts of interest were managed and said it "appears to imply that Mr Hausmann acted in a way that was normal for our board".

"They seem to say this sort of conduct was endorsed by the board and the chair and that was why when Hausmann walked into this environment he didn't declare his interests properly. I totally disagree with that.

"I've got sufficient corporate experience to know how to manage conflicts of interest. The process we used was robust and sound."

Mr Atkinson said the report should have considered former health minister Annette King's decision to appoint Mr Hausmann as well as the conduct of management, especially chief executive Chris Clarke.

"After all, it was management that allowed Peter Hausmann to gain the advantages he did through those negotiations."

Healthcare NZ board member Ken Douglas, speaking on behalf of Mr Hausmann, said the report showed he behaved "honourably and in the best way he could in the context of a board environment where poor management of conflicts of interest was the norm".

- © Fairfax NZ News