10 Mar 2017

Call to investigate if fraudster forced out whistleblowers

9:01 am on 10 March 2017

The Labour Party is calling for an investigation into whether a convicted fraudster pushed public servants out of their jobs after they raised red flags about her.

Labopur MP, Sue Moroney.

Labour Party MP Sue Moroney said questions needed to be asked. Photo: RNZ / Alexander Robertson

Former Ministry of Transport manager Joanne Harrison was sentenced to three years and seven months jail in February for stealing nearly $750,000 from the department.

She created fake companies and invoiced the ministry many times between 2012 and 2016.

It emerged yesterday that ministry staff had raised red flags about Harrison's invoicing and contracts eight times with then-chief executive Martin Matthews before she was eventually caught.

Labour's Sue Moroney said three staff complained in October 2015.

Just two months later, she said, they were made redundant as part of a restructure that Harrison was involved in.

"I'm sure that people in the Ministry of Transport have looked at that time frame and feel uneasy about it, as I do."

Ms Moroney said the ministry must investigate the layoffs to ensure Harrison did not punish staff for speaking up by forcing them out.

"There may be no link - and if there is no link I'll be the first to celebrate that - but I think the question needs to be asked."

She said it was essential public servants felt they could raise the alarm without fear of repercussion.

Martin Matthews

The then chief executive of the Ministry of Transport, Martin Matthews. Photo: RNZ / Kim Baker Wilson

Mr Matthews, now the Auditor-General, told Morning Report he was confident he handled the case correctly.

He told Morning Report he was given an external tip which brought Harrison to his attention, and had no recollection of the three individuals coming to him with complaints about her.

"I think we all learn from these experiences," he said. "Now that I'm sitting in the Auditor-General's position I suppose I come to this with an enormous amount of learning and experience from this.

"I think we have to be very very vigilant about highly manipulative people who will deceive to steal."

Peter Mersi, who took over as chief executive in May last year, after the redundancies took place, told a parliamentary select committee yesterday that he would not investigate them further.

He said Harrison was involved in the restructure but it was was senior leadership who made the call.

"As far as I am aware, the decisions were taken by the organisation, not by Joanne."

Mr Mersi said he had "no reason to believe" Harrison had anything to do with the decision.

He told MPs a wider review was underway into the ministry's operating model.

Minister of Transport Simon Bridges, said he did not know the details of the layoffs, but understood that "the reviews that are required have been done".

"In hindsight [the ministry] could have done things better - albeit they were dealing with this dishonest individual - and in future they will".

Essential facts are established - Mai Chen

High-profile employment lawyer, Mai Chen, said it was essential to establish the facts.

Mai Chen

Mai Chen Photo: supplied

"How influential really was Joanne Harrison in the decision making?" she said.

"If ... these weren't her direct reports and she didn't really have that much influence ... that might be different.

"The thing is, we are not clear on those facts."

She said if it turned out Harrison actually wielded a lot of influence over the restructure, then the State Services Commission should investigate.

"I don't think you can do it in-house," she said.

The Public Service Association has requested more detail about the redundancies.

In a statement, it said, "if it is proven Ms Harrison acted inappropriately, the PSA would be deeply concerned."