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A third government agency is examining the process by which it hired a consultancy company wholly owned by Gannin Ormsby, the husband of government minister Nanaia Mahuta.
The news follows the admission that, contrary to his
policy, the agency did not follow any formal conflict of interest process when sourcing the work.
Housing Minister Megan Woods has confirmed that Crown Housing Agency Kāinga Ora breached its conflict of interest processes by awarding Ka Awatea Services a $66,846 (excluding GST) contract.
The agency awarded the contract to Ormsby’s company without requesting or receiving a declaration of conflict of interest from Ka Awatea Services or the Kāinga Ora contractor who recommended Ka Awatea Services for the work, a said Woods in response to written parliamentary questions posed by the National Party.
Woods said “it was a mistake” because Kāinga Ora has a policy that requires its employees and contractors to declare real or perceived conflicts of interest. She said the agency has since improved guidance on these requirements.
Woods previously said that “a verbal conflict of interest was declared” when the contract was opened, but that statement was corrected late last week with the clarification that no “formal” conflict was written. or verbal, had been declared.
Kāinga Ora’s review is internal and is expected to be completed by the end of November, an agency spokesperson confirmed.
There was no communication with ministers in the contractor selection process, he said.
A spokesperson for Mahuta previously said: “The contract did not require ministerial approval, so no disputes arose. [by the minister].”
For areas where Minister Mahuta has ministerial responsibility, the spokesperson said, where there have been conflicts, “these have been disclosed to the Cabinet Office” and Mahuta “assures that no conflict exists or appears exist between personal interests and portfolio responsibilities, as directed by the Cabinet Manual.”
Gannin Ormsby did not respond to The Herald’s requests for comment.
Ka Awatea Services was hired to “engage Maori and understand Maori perspectives on Kāinga Ora’s urban development work”.
Minister Mahuta was Associate Minister for Housing (Maori Housing) at the time Ka Awatea was engaged. His responsibilities included ensuring that Māori housing was properly taken care of in Kāinga Ora’s work; however, the agency’s spokesperson said the work fell within the ministerial remit of Housing Minister Megan Woods.
While the contract was between Kāinga Ora and Ka Awatea Services, it required the “facilitation” services of Rama Ormsby, a relative of Gannin.
Until the end of 2019, Rama was employed by Auckland Council as an expert in tikanga (Maori customs and culture).
Kāinga Ora said that no written work was provided by Ka Awatea under the contract. On the contrary, Rama Ormsby “facilitated” 14 workshops and six hui with Auckland iwi.
The facilitation work started in August 2020, however, a written contract was not signed until October 2020, by which time half of the huis and workshops had already taken place.
Asked about that timeline, Te Ariki Pihama of Kāinga Ora, deputy chief executive of the agency’s Māori group, said the agency had a verbal agreement with Ka Awatea to start work in August. He said no money was paid before a contract was signed.
The National Party’s Simeon Brown said he had twice written to the Civil Service Commission asking for an investigation into the wider picture of public procurement, Gannin Ormsby and other members of his family.
The National and Act parties say the “extraordinary pattern” of government contracts awarded to Minister Mahuta’s husband and other family members requires a full investigation by either the Auditor General or the Civil Service Commission.
Kāinga Ora, the Ministry of Environment and the Department of Conservation all contracted work to Ormsby’s company, Ka Awatea Services, in October and November 2020. All contracts were single-sourced , without competitive bidding.
Ministry of the Environment review complete
A recent review by the Ministry of the Environment (MfE) of contracts worth $90,000 (excluding GST) awarded to Ka Awatea Services and consultancy firm Kawai Catalyst (owned by Ormsby’s nephew and his wife Tomoko and Waimirirangi Ormsby) revealed no political involvement in the decision-making.
However, he listed a litany of shortcomings in the contract award process, including the fact that legal advice was sought very late in the procurement process. The procurement and legal opinion specified that, given the “high” level of risk associated with the minister’s “family ties”, the work required the approval of the chief executive. However, this step was not taken.
Members of the Ormsby family formed the majority of a group of five Maori advisers (rōpū) formed by the ministry to help with a new waste strategy. The younger members of the family – Tamoko and Waimirirangi Ormsby – were added to the group at a later stage in the planning process (to provide “support services”), and at the request of the original three rōpū members, including Gannin Ormsby.
The review noted that the MfE project manager was surprised to see in the draft agenda for the initial meeting with potential rōpū members that it “includes two more people”.
The reason given for adding Tomoko and Waimirirangi Ormsby to the group was that: “they work closely with a rōpū member [Gannin Ormsby] in a family consulting business, presence of rangatahi [the presence of young people] is very important to rōpū, and that’s how rōpū wanted to work.”
The review noted that the risk of conflict of interest between Gannin Ormsby and Tomoko and Waimirirangi Ormsby was little discussed or managed outside of the extended family bond with Minister Mahuta.
The pair were paid $65,000 (excluding GST) for the rōpū work, through their consulting firm Kawai Catalyst.
Legal advice, including the opinion of the Public Service Commission (PSC), was sought, albeit very late in the process and only the day before signing a contract to hire Gannin Ormsby. He said being the minister’s husband should not prevent Ormsby from getting involved in the work of the MfE, but that “a conflict of interest is present” and that a “sound management plan” was needed. Mahuta was the associate environment minister at the time, although she had no responsibility for waste.
MfE officials never sought the PSC’s opinion regarding Tamoko Ormsby and Waimirirangi Ormsby, who in the procurement documents were described as having “close family ties” to Minister Mahuta.
Among the findings of the review is that “a distinct but related risk of conflict of interest (between a member of the rōpū [Gannin Ormsby] and the helpdesk provider [Tamoko and Waimirirangi Ormsby]) should also have been evaluated.”
The review found sufficient evidence to conclude that all members of the rōpū were appointed because of their relevant experience; and that no reason to dispute the direct purchase method has been found.
The review indicated that a variety of changes and improvements have been made since the rōpū waste nomination process. These include process improvements and vendor conflict of interest forms.
Brown noted the “significant shortcomings” found in the report “by the Ministry of the Environment regarding obtaining contracts with Nanaia Mahuta’s family members”.
However, he said that still didn’t answer the key question: “why three members of Mahuta’s family were needed for a five-member task force.”
Review underway at Department of Conservation
Additionally, the Department of Conservation is reviewing a $52,000 (excluding GST) contract awarded to Ka Awatea Services, for which a total of $11,800 (excluding GST) was paid: consideration which, according to the contract document, was due “on signature”. The contract does not stipulate any deliverables required for the payment of this initial fee.
DoC declined to say why after signing the contract was not fulfilled. A spokesperson said the review is expected to be completed by the end of October.
Other government-related work
The Criminal Cases Review Board confirmed that Ormsby had worked for the Independent Crown Entity since January 2021 as a “connector”.
The commission was set up in 2020 to look into cases of possible miscarriages of justice. He was asked if Ormsby’s criminal record was considered relevant to his hiring, but has yet to answer. In 2003, Ormsby pleaded guilty and was found guilty of a charge of assaulting a woman.
The Waikato Regional Council also confirmed that it had engaged Ka Awatea Services for consultancy services, related to Covid-19, in September and October 2021. The work involved identifying issues facing Maori and additional support required, the cost totaling $33,000 (excluding GST). ).
In April 2021, Ka Awatea also received a $28,000 grant from a suicide prevention fund from the Māori Development Department, at a time when Mahuta was the department’s associate minister.