12 Apr 2017

Accused CERA officials pointed to other possible cases

4:35 pm on 12 April 2017

Two men who were found to have a conflict of interest while working for the Canterbury Earthquake Recovery Authority (CERA) were the ones who raised the alert about other possible cases.

Andrew Kibblewhite speaking to reporters at Parliament today.

Andrew Kibblewhite speaks to reporters at Parliament today. Photo: RNZ / Jane Patterson

Three other former staff are now under investigation for alleged conflicts of interest.

That has prompted calls for a full-scale inquiry into the conduct of all staff who were at the authority, which has since been disestablished.

Department of Prime Minister and Cabinet (DPMC) head Andrew Kibblewhite made the surprise revelation at a select committee hearing this morning.

"Some of the individuals who were found to have erred, as part of their defence that this was going on elsewhere in the department - they've given us some specific instances of that and we're looking at that," Mr Kibblewhite said.

It came less than 24 hours after a State Services Commission investigation found Gerard Gallagher and Simon Nikoloff had a clear conflict of interest when arranging property deals through their own company while working for CERA.

Mr Gallagher and Mr Nikoloff maintained the authority's leaders, and its legal teams, were fully aware of what they were doing.

Michael Heron QC carried out the investigation on behalf of the State Services Commission.

READ the full public statement from the commission here

The two men's actions have been referred to the Serious Fraud Office.

A third official, Murray Cleverley, was found by Mr Heron to have made a significant error in judgement by not disclosing some shareholdings to CERA, and he was also investigated for a conflict of interest related to his new role as chair of the Canterbury District Health Board.

He resigned from his roles yesterday.

Mr Kibblewhite said today the three other staff in question were not transferred from CERA to Ōtākaro, the agency responsible for key precinct projects in Christchurch and for Crown property assets.

Minister rejects calls for wider inquiry

Defence Minister Gerry Brownlee.

Defence Minister Gerry Brownlee. Photo: RNZ / Alexander Robertson

Labour MPs Megan Woods and Clayton Cosgrove and New Zealand First leader Winston Peters said at the select committee this morning the latest information now warranted a broad inquiry into the whole operation of CERA and its staff.

However, the responsible minister, Gerry Brownlee, said there were no grounds for a wider inquiry into CERA.

He said Mr Heron's report was "comprehensive" and it was appropriate to investigate other allegations that had arisen as a result.

"The two gentlemen who are now referred to the Serious Fraud Office at the latter stages in the inquiry decided to suggest some others who had been doing some things to do - but I don't have a concern about that."

Mr Brownlee said he did not know the details of the allegations.

DPMC head 'keeping door open' for further investigations

Mr Kibblewhite said he was satisfied with the specific investigation into the three people being investigated, but was keeping open the option of a wider inquiry if needed at some time in the future.

He said he would prefer not go into any further details about the allegations, or say when the three people under investigation left CERA.

Mr Kibblewhite said Mr Heron found no systemic issues.

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