Espiner: Parata should be sacked

Last updated 06:56 23/03/2014
Espiner
SUNDAY SERVE: Sunday Star-Times columnist Colin Espiner.

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OPINION: As political U-turns go, few in this country's history have been as abrupt, as complete, as big or as embarrassing as that performed by Hekia Parata last week.

The Education Minister set a new benchmark for smoking rubber when she went from trumpeting a report "clearing" the Kohanga Reo National Trust of misspending public money to calling in the Serious Fraud Office within 24 hours.

While Parata used the flimsy excuse of "fresh allegations" for her about-face, the real reason was almost certainly the dawning realisation of those above her in the Beehive that something serious was going on and a whitewash just wasn't going to cut it.

For those who haven't followed this story, let's back the truck up a bit. Maori Television's Native Affairs programme last year broadcast serious allegations that members of the Kohanga Reo National Trust's commercial subsidiary, Te Pataka Ohanga, had been going on extensive spending sprees on their credit cards.

The programme obtained credit card statements allegedly showing that two senior members of the trust, Dame Iritana Tawhiwhirangi and her daughter-in-law Lynda Tawhiwhirangi, used their company cards for thousands of dollars worth of questionable purchases including airfares, clothes, cash advances, mall shopping, hotels, meals, gifts, handbags and koha - gifts of cash.

Both women justified their spending in sworn affidavits, but Lynda Tawhiwhirangi was subsequently sacked and is now reportedly demanding $400,000 compensation from TPO.

The Kohanga Reo National Trust receives almost $100 million a year of public money, which it uses to administer the 470 kohanga (Maori language immersion schools) under its jurisdiction.

After the programme aired, Parata announced she had commissioned Ernst and Young to investigate the trust's accounts. That report was released last week by Parata at a news conference at the bizarre time of 8pm, called with just over an hour's notice.

Reporters were told the organisation had been cleared of any wrongdoing and that taxpayers could breathe easy - before the spectacular admission from Parata that EY hadn't actually looked at any of the allegations made by Native Affairs.

The reason was equally breathtaking; Parata claimed that the trust's subsidiary, TPO, was a private company beyond the reach of the Government and that how it spent its money was its own business.

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In essence, Parata was saying that government agencies or publicly-funded bodies that receive taxpayer funds don't have to account for money they give to private third parties.

This alone is disturbing enough - and opens up a whole raft of questions about the transparency and accountability of funding going to other contractors in the education sector.

But in the case of TPO, its "private" status is a farce: the company's directors are all members of the Kohanga Reo Trust, it shares the same office space, uses the same staff - and is 100 per cent owned by the trust.

The trust's spokesman, Derek Fox, claims this is a media beat-up and that the public has no right to know what TPO does with its money. Oh, but it does - particularly when the subsidiary is doling out "loans" to trust members and its executives, while failing to properly investigate serious allegations of misappropriation of funds that originated in the Treasury.

And by setting up an arms-length legal structure, the organisation Fox represents has invited precisely the sort of suspicions of lax financial oversight and questionable business practices that are now swirling around it.

Fox is entitled to his view, and to go in to bat for his organisation. Parata has no such excuse. Her performance over this issue is tantamount to a dereliction of her duty to ensure the wise and proper expenditure of public funds in her portfolio.

First, she allowed herself to be hoodwinked by the trust into accepting she had no right to inquire into TPO. Second, she set up an inquiry deliberately designed to fail, at further considerable cost to the taxpayer. And third, she attempted to claim the report's findings as a victory for the trust, even while it sank deeper into a mire of allegations.

Prime Minister John Key has plenty of political capital to burn at the moment, and he should use a little of it to sack Parata over this. At best she bungled the entire issue from start to finish. At worst she appears complicit with the trust in its bid to sweep the whole mess under the carpet.

Regardless of whether or not the SFO decides to conduct an investigation, Key should consider a ministerial inquiry into education funding in the wake of this saga.

Parata's blundering has highlighted a woeful lack of Government oversight in an area of considerable spending that would not have come to light had it not been for the determined efforts of the media. The trust has received close to a billion dollars of public money in the past two decades, and while kohanga have helped revitalise the Maori language, their numbers have halved since their heyday. It's legitimate to ask how much of this money has found its way to its schools.

The Government should also consider whether those on the public teat should be allowed to engage in complex legal charades to hide their business practices from official scrutiny - and how widespread this practice is.

Finally, it should re-examine the Kohanga Reo Trust's funding. An organisation that can afford to give $50,000 in tax-free "koha" to a staff member to prepare a Treaty of Waitangi claim against the Government because it doesn't believe it is getting enough money, is clearly already receiving more than enough.

- Sunday Star Times

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