In 2017 Joanne Harrison was jailed for defrauding the Ministry of Transport, then deported. Certain suppression orders related to the case were lifted this month, allowing a Stuff Circuit documentary to be published.
We think this is an excellent documentary. At 44 minutes long, we feel it needs a brief summary, plus a description of aspects of this matter which remain subject to non-publication orders.
To summarise, Joanne Harrison’s fraud using fake vendors happened on the watch of then Chief Executive Martin Matthews. Harrison’s previous offending at Tower Insurance for which she received a non-custodial sentence, was not known to the Ministry (and the Far North District Council which employed her briefly) because of a suppression order. That suppression order ended up causing a lot of harm; it has enabled her to reoffend and the fallout has been significant.
Shortly after Deloitte investigated and confirmed fraud, Matthews applied for a Ministerial appointment as the Auditor General. The Harrison fraud was already known of by the time the interview process was underway, but the Ministry was not sufficiently put off by this to decide against appointing him. However, police were called in a few days after Matthews left his position at MoT in July 2016, and by agreement he resigned as Auditor General less than a year later as the fallout from Harrison’s fraud on the MoT followed him to his new job.
Matthews claims he was forced to resign “with a gun to his head”, similar to what occasionally happens in MBIE employment mediations. It appears that Matthews expected material about him to be suppressed if he resigned. Matthews is now pushing for a Ministerial enquiry to “clear his name”. He now says that that material is damaging to him, but apparently not enough to make a Select Committee reasonably think that a Chief Executive who handled the Harrison fraud as he did was not fit to be the Auditor General.
Here’s where it gets murky. State Services Commission was involved in the aftermath and an 80 page compilation of documents gives an idea of how Harrison’s web of deceit slowly disintegrated.
It is heavily redacted in parts and we note it was publicised before certain suppression orders were lifted, so in theory, dozens more pages could be publicised with only light redaction, although trying to get through the sheer volume of material linked to in this blog is no picnic!
Now we examine the role of ERA2000 Section 149 which basically says that a mediated employment settlement agreement is final, binding and enforceable. In these circumstances, practically the whole point of procuring a settlement agreement from the employer’s perspective is for the Non-Disclosure clause which is a standard provision to prevent both parties from saying what they know about each other. There were four whistleblowers at the Ministry of Transport who were managed out and gagged along the way.
After Harrison was convicted, two of the whistleblowers requested reinstatement but were refused. This is a small part of their story:
Matthews had been repeatedly warned as per the link below, but the two former MoT employees spoke to Radio NZ on the condition of anonymity because even though fraud was proven, they may still be bound by a Non-Disparagement clause in a mediated settlement agreement, and could theoretically be exposed to an application in the ERA for a compliance order, penalties and costs.
The risk of this happening now, however, is minuscule. There is no reason for the Ministry to enforce a settlement agreement; the fraudster is gone, the Chief Executive under whose watch the fraud happened left of his own accord. There is nothing legally preventing any former employee from publicising that they are bound by a settlement agreement that prevents reinstatement. The recent lifting of suppression orders could even embolden those former employees to provide evidence that they were “Section 149’ed at the behest of Joanne Harrison” (if that is the case). Settlement agreements are often treated as being so watertight that they can be used to obstruct justice, but they can be set aside where fraud has been discovered. And of course fraud has been proven.
Sadly, this is not the only situation we are aware of where a settlement agreement, countersigned by a government mediator, has been used to cover up crimes such as fraud, criminal negligence (eg: Pike River / Peter Whittall) and criminal nuisance. Matthews says he is now as much of a pariah as the victims who are forced out by managers using faked documents, and this is not limited to MoT. Matthews has chosen a lawyer who is an expert in this process, Mary Scholtens QC. Perhaps Scholtens is acting pro bono in this matter.
Leighton Associates has described the effects of Scholtens’ work in The Power of MBIE, 19 September. Acting for managers and a judge (in relation to legal advice that judge gave as a then QC), she had an MBIE official declare that a 2014 employment settlement agreement was a “statutory instrument”, used that same statutory instrument to protect two public sector managers from investigation for fraud and even had them awarded kickbacks as compensation for exposure of their wrongdoing. That isn’t resolved though; proceedings for judicial review have recently been issued, and that won’t be pretty!
If there is a Ministerial enquiry on Martin Matthew’s forced resignation, we hope that vital evidence won’t be hidden behind Non-Disclosure Agreements of former employees who had made Protected Disclosures on Harrison’s conduct.