Opposition parties back Nick Smith's inquiry call

TRACY WATKINS, VERNON SMALL AND DANYA LEVY
Last updated 14:36 22/03/2012
Lyle McMahon

Prime Minister John Key lashes out at those criticising his handling of former Cabinet Minister Nick Smith, saying they should "get a life" and "give him a break".

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SMITH STEPS DOWN: Nick Smith resigned from his ministerial portfolios over letters he wrote as a minister to help a close friend.
CHRIS SKELTON/Fairfax NZ
SMITH STEPS DOWN: Nick Smith resigned from his ministerial portfolios over letters he wrote as a minister to help a close friend.

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Nick Smith's life in politics Smith not alone to fall on sword Nick Smith resigns Nick Smith's political ups and downs Nick Smith's swift exit Brownlee minding the stall for Key The 'friend' and activist linked to Smith's demise Second letter made PM's support impossible Smith rehearsed resignation on plane

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Opposition parties are backing shamed former Cabinet minister Nick Smith's call for an inquiry into his involvement in a friend's ACC claim.


The Nick Smith letters: Letter 1 | Letter 2 | Letter 3 | Letter 4


An emotional Smith yesterday resigned his portfolios after Prime Minister John Key called him back to Wellington to explain the emergence of a second letter for National Party activist Bronwyn Pullar's ACC case.

Key today again ruled out a separate independent inquiry.

Key told reporters in Auckland today that Smith had been right to offer his resignation for putting himself in breach of the cabinet manual and in a situation where he had a perceived conflict of interest.

He said he was happy there were police and privacy commission inquiries under way into the matter.

"I don't see the need for any further inquiries."

The second letter emerged as pressure grew on Key to sack Smith who on Tuesday admitted he had written a reference for Pullar on a ministerial letterhead while he was ACC minister.

It revealed two other National MPs, backbencher Nikki Kaye and former Cabinet minister Pansy Wong, had also been asked to get involved in Pullar's case but had passed the matter on after declaring a conflict of interest.

Smith had failed to declare the conflict of interest and signed ACC's formal response to Pullar.

Labour's ACC spokesman Andrew Little said today there needed to be an inquiry.

"If it clears his name, then that is good for him, but it actually helps the public understand what has gone on and helps to restore confidence in ACC, which is what is most important."

There was still a "cloud of suspicion" over Smith's involvement with Pullar, he said.

Greens ACC spokesman Kevin Hague had already written to the Auditor-General asking for an inquiry and today said there "absolutely" needed to be an independent investigation.

"[ACC Minister] Judith Collins and the prime minister have both been stonewalling that."

A retired judge could also conduct an inquiry, he said.

"An inquiry needs to look at both what the extent of Nick Smith's intervention in ACC cases was because we really don't know if it was just Bronwyn Pullar's case, it could have been others.

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"And what effect his intervention had on ACC's behaviour because on a superficial level it seems likely that is what led to two senior managers meeting with her in December, something which - after dealing with many hundreds of ACC claimants over the years - I cannot ever recall happening to anybody else."

Key today said it was "a bit rich" for the Labour Party, NZ First leader Winston Peters and others to criticise him for not acting faster.

In Government Labour took "forever" to discipline errant ministers, and Peters had only stood down when former prime minister Helen Clark made him do so, over a more serious issue.

Speaking in Parliament, Peters said it was just "flannel" to suggest matters of impropriety would be addressed by the existing inquiries because the police would only look at criminality and Privacy Commissioner Marie Shroff would look at issues of confidentiality.

But Deputy Prime Minister Bill English said ministerial responsibility was a matter for Key and he had conducted his inquiry. It had led to Smith's resignation, and that was the most serious action a minister could take.

The friendship between Smith and Pullar was uncovered after it was revealed last week ACC had mistakenly sent thousands of clients' files to Pullar who suffered a cycling accident in 2002.

Key yesterday faced questions about why he did not act earlier and why he said yesterday morning he still had confidence in Smith despite having seen the second letter.

The prime minister said Smith had not acted illegally but had shown poor judgment.

Smith yesterday told Parliament he did not believe he had influenced ACC's decision-making but accepted the letters were not up to the standards expected of ministers.

The Privacy Commissioner was investigating the privacy breach by ACC in which Pullar was inadvertently emailed details of more than 6000 claimants including 250 sensitive sexual abuse cases.

ACC claimed Pullar threatened to go public with the information unless it guaranteed her a benefit for two years, and called in police.

Pullar disputed ACC's claims.

Key said yesterday he did not see the need for an inquiry beyond those of the Privacy Commissioner and police.

Smith had faced questions over his relationship with Pullar after NZ First leader Winston Peters used parliamentary privilege to label it a "shabby little case involving blackmail, sex [and] a minister with a conflict of interest".

Smith refused to reveal the extent of their relationship and Key has said it has no bearing on the matter.

Smith also wrote Pullar two other letters.

In one in December 2010 he told her it was inappropriate and impossible for him to intervene in the matter on her behalf and another in March last year he said he had looked into her concerns about an ACC consent form but reiterated it would be inappropriate for him to interfere with her case.

All four letters were written on Smith's ministerial letterhead.

CONFLICT OF INTEREST AT CENTRE OF SAGA

Smith's downfall originated from March 2010 when he failed to declare a conflict of interest when Pullar's ACC case crossed his desk.

Maungakiekie MP Sam Lotu-Iiga wrote to then associate ACC minister Pansy Wong about Pullar's ACC claim on behalf of Auckland Central MP Nikki Kaye.

Both Kaye and Wong declared a conflict of interest because they knew Pullar personally. They had passed the matter on.

ACC wrote a formal response to Lotu-Iiga and Smith signed it, without acknowledging his own relationship with Pullar.

"I am replying to your letter because Minister Wong has also declared a conflict of interest as she knows Ms Pullar personally," the letter said.

It said ACC had accepted cover for some of Pullar's injuries and acknowledged she had requested a review of the decision.

In a letter written in December 2010, Smith told Pullar it was inappropriate and impossible for him to intervene in the matter on her behalf.

"I found the tone of your letter pretty over the top with your claims of corruption and rotten to the core etcetera," he said.

In March last year he wrote to Pullar saying he had looked into concerns she raised about an ACC consent form.

He reiterated that it would be inappropriate for him to interfere with her ACC case.

"I do hope you are able to resolve these issues and move on with your life."

The second contentious issue was the letter of recommendation Smith wrote in July last year in support of Pullar.

"I can confirm, however, that in my contacts with Bronwyn prior to the accident she was well and a dynamic, capable person who worked hard and achieved a lot," he said.

"I wish to put this on record to assist in any comparative assessment of Bronwyn's current health."

All four letters were written on Smith's ministerial letterhead.

HOW THE STORY UNFOLDED

Tuesday, March 13: Dominion Post investigations editor Phil Kitchin reveals that private details of more than 9000 ACC claims – some featuring well-known people – have been emailed to a person who should not have received them. The privacy breach, described as one of the worst in New Zealand history, included personal information on nearly 250 clients from ACC's most secure unit, the sensitive claims unit.

Wednesday, March 14: ACC says it will telephone or mail an apology to 6748 clients whose privacy had been breached and deal with compensation claims case by case. The corporation said a staff member sent a spreadsheet containing the names and nature of at least 9000 claims, including some by those who said they had been the victims of sexual abuse and other violent crime.

Friday, March 16: The whistleblower who contacted The Dominion Post is referred to police over claims she threatened to go public about being mistakenly sent the confidential details, unless ACC promised to pay her a benefit for two years. In a report to ACC Minister Judith Collins, ACC said the woman tried to negotiate a guaranteed benefit payment: "She made threats that, if her demands were not met, she would not return the information and she would inform the media of the alleged privacy issue."

Sunday, March 18: A Sunday newspaper names the whistleblower as Auckland businesswoman and former National Party activist Bronwyn Pullar.

Monday, March 19: Pullar said she had never made threats or demands about the return of information in her dealings with ACC. "I did not threaten ACC that I would inform the media of the alleged privacy issue, I did not threaten ACC to get my own way in any way."

Tuesday, March 20: Environment Minister Nick Smith apologises to Prime Minister John Key after admitting he wrote a reference for Pullar for her to use in her medical assessment for a claim lodged with ACC. The letter, written in July 2011 when Smith was ACC minister, was written on ministerial letterhead.

- The Dominion Post

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