The Heatley Report

March 30th, 2010 at 2:40 pm by David Farrar

The has published her 20 page report into spending from ’s Ministerial Office.

We found that a total of $1,402 of Mr Heatley’s expenditure – $608 in Vote and $794 in Vote Parliamentary Service – was outside the rules. In all cases, Mr Heatley thought that the expenditure was within the rules, but he did not understand the rules correctly. In the case of the expenditure in Vote Parliamentary Service, the Parliamentary Service was also administering a rule incorrectly for members of Parliament, and Mr Heatley is not the only member who will have been affected.

That is significant. There may be a few more reimbursements to come.

We found that Mr Heatley generally took care to account for his expenditure appropriately. His Senior Private Secretary took her responsibilities seriously in managing the ministerial office expenditure. On occasion, Mr Heatley’s ministerial office received a reminder from Ministerial Services to submit a late reconciliation of his expenses or invoices or receipts; these were standard reminders that are sent by Ministerial Services to many ministerial offices. The problematic expenditure that we discuss in this report was approved by the relevant officials and was never queried with Mr Heatley or his Senior Private Secretary. For some items of expenditure, it was not clear from the supporting documentation provided that it was outside the
rules, but it was for others.

As in the UK, there has been a culture of parliamentary officials not questioning claims.

We accept that the expenditure outside the rules was not deliberate on the part of Mr Heatley or his ministerial office, and that he had repaid a sum of money before we started our inquiry. He has also personally paid for expenses that are allowed under the rules.

And to be fair to MPs, many of them pay for stuff they could claim, but do not bother to.

Heatley has repaid $2,852, and the AG has ruled that only $1,402 was outside the rules. But

Notwithstanding deficiencies in rules or the systems for administering them, everyone spending public money – in this case Mr Heatley – has a personal responsibility to manage their expenditure appropriately with good judgement. In our view, even though Mr Heatley was sometimes operating under an incorrect understanding of the rules – for example, when his wife and family accompanied him on ministerial business – a more conservative approach that took greater account of how others might perceive his use of public money would have served him better.

I think that is a fair point.

They found five instances of spending outside the rules:

  1. $287 out of $929 spent travelling to Auckland And Queenstown accompanied by family
  2. $251 out of $2,677 spent travelling to Picton and Kaikoura
  3. $70 for wine out of $425 spent attending the National Party Conference
  4. $692 for a child’s travel between Wgtn and Queenstown
  5. $102 for a child’s train and ferry travel between Wellington and Kaikoura

This is a total of $1,402. Note a total of $2,852 has been repaid.

The OAG has clarified that a spouse’s meal and accommodation expenses should only be paid for, if they are attending official functions or meetings with the Minister, but not if they are just accompanying him. This soudns reasonable to me.

For the National Party conference, they ruled that accommodation and meal costs are legitimate expenses as that is part of the parliamentary role of an MP. There was no need to refund the meal. The wine explanation is:

He later wrote “food and beverage” on the eftpos receipt. This was his usual practice when it was not lunch or dinner – it was not necessarily a payment for food and beverage; merely his way of categorising food and beverage-related costs that were not technically lunch or dinner. His Senior Private Secretary assumed that the costs were for dinner and wrote “Minister and spouse – dinner” on the credit card reconciliation form. Mr Heatley certified this form as the card-holder. His Senior Private Secretary told us that there was no intention to misrepresent the situation on the reconciliation form – she had assumed that it was for dinner from what he had written and she did not check it with him. Mr Heatley told us that hedid not read the form carefully before he signed it and that it was a careless rather than dishonest act. …

From our review of Mr Heatley’s expenditure documentation, we can confirm his practice of categorising expenditure on his receipts as “food and beverage” when they were only for beverages such as coffee. However, in our view, Mr Heatley should have taken greater care in ensuring that the description of his expenditure was accurate.

The conclusion seems to be the description was inaccurate but not designed to be misleading.

As for the wine itself:

In our view, the two bottles of wine that Mr Heatley purchased for his table were more in the nature of entertainment costs incurred in the course of parliamentary business. We therefore concluded that the cost of the wine should not have been charged to Vote Ministerial Services. It would have been better to regard it as covered by the expense allowance.

Again I think this is a reasonable approach. This is partly what the expense allowance is for.

Notwithstanding deficiencies in rules or the systems for administering them, everyone spending public money – in this case, Mr Heatley – has a personal responsibility to manage their expenditure appropriately with good judgement. In our view, even though Mr Heatley was operating under an incorrect understanding of the rules when his wife and family accompanied him on ministerial business, a more conservative approach that took greater account of how others might perceive his use of public money would have served him better.

And that sentence is why it is unlikely, in my opinion, Phil will return to Cabinet immediately, or indeed probably this term.

UPDATE: I was wrong. Phil has been reappointed. While I am pleased for him personally, I actually think it is the wrong decision. The thing people hated about Labour was the revolving door nature of Ministerial stand downs.

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28 Responses to “The Heatley Report”

  1. Tim Ellis (251 comments) says:

    A very interesting report.

    The problematic expenditure that we discuss in this report was approved by the relevant officials and was never queried with Mr Heatley or his Senior Private Secretary.

    I really do have to wonder whether the culture of the last Labour Government, which bullied parliamentary officials to pay for unlawful expenditure, may have led to an environment whereby officials don’t question Ministers’ expenses.

    I await with glee the details of the last Labour Government’s ministerial expenses.

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  2. IHStewart (388 comments) says:

    “And that sentence is why it is unlikely, in my opinion, Phil will return to Cabinet immediately, or indeed probably this term”

    I am not aware of his housing role but he was developing into a very respected Minister of Fisheries and with the bickering between commercial, recreational and customary that is no small achievment. I would advocate him returning as a minister outside cabinet with the fisheries portfolio for the remainder off this term.

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  3. Barnsley Bill (983 comments) says:

    “And to be fair to MPs, many of them pay for stuff they could claim, but do not bother to.”

    I now have a qwerty mark on my forehead after reading that line.
    Calling BULLSHIT on that one David. If there is one thing we have come to understand about those who strive to rule us. They learn to trough early. And trough hard.
    I don’t for one moment believe Heatley is the worst we have seen in the last decade. Fuck, I doubt he even makes the top 50. But resign he did, and it was the right thing to do. If he cannot be trusted not to trough piss how can he be trusted with a ministry or three.

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  4. krazykiwi (9,186 comments) says:

    I await with glee the details of the last Labour Government’s ministerial expenses

    Such a review is planned? If so, I hope the report is released this side of the next election.

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  5. tvb (4,415 comments) says:

    But he thought he could bend the rules to suit himself. He whole attitude seems to be – “what can I get away with”. He went because he lost the confidence of his colleagues. He was a good enough Minister but not so good as to be essential. So he went.

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  6. Lipo (229 comments) says:

    DPF says “That is significant. There may be a few more reimbursements to come.”

    Why is it when Politicians get caught out they repay the money, enough said.
    When Joe Public get’s caught out they face prosecution, SFO etc.

    Seems like a double standard

    Why no prosecution for fraud or theft as a servant

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  7. berend (1,708 comments) says:

    So we’ve spend $500,000 on a guy who misspend $2,000? What about the guy in charge who spends $250 million a week we don’t have?

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  8. berend (1,708 comments) says:

    Lipo, you need to prove intent. That will be hard. But I agree, in the real world if you get caught, you face penalties. In politics it means a promotion.

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  9. big bruv (13,880 comments) says:

    “Phil will return to Cabinet immediately, or indeed probably this term.”

    God I hope not.

    Heatley is a trougher who has been caught, there is no other way to spin this.

    It is all well and good to go on TV and blubber like a child (only because he got caught) but do you really want a man like that running a ministry?

    Kick him to the curb, he is politically dead.

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  10. serge (108 comments) says:

    The point is that a minister resigned before the expense account was verified by the OAG, and now he should be re instated immediately. However, real mis behaviour such as the unmentionable maori member of parliament who commited serious offences not befitting his position was let go. The problem is that we have a weak leader, and this will become more and more obvious as time goes bye. I have always voted national (40+ years) but this time I am beginning to regret it.

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  11. Chris2 (766 comments) says:

    Several times in her report the AG writes of Heatley: “but he did not understand the rules correctly”. It is not clear if this a statement of fact or opinion, but surely if a person has been an MP since 1999 (as Heatley has) then a decade is more than enough time to familiarise oneself with what the rules are for (a) an MP, and more latterly (b) a Cabinet Minister.

    If Heatley was incapable of making the transition from nine years of Parliamentary expense claims (where presumably he knew the rules), through on up to understanding Ministerial expenses rules, then he really has no business being a Cabinet Minister again.

    If he did not charge up family holidays or his children’s travel when an MP for nine years, why did he think he was entitled to do so as a Cabinet Minister?

    Whether or not the rules entitled him, I think any person who charges up a $9.50 hamburger meal to his Government credit card whilst he is in receipt of a $1/4 million Cabinet Minister’s salary, is a pretty money-grubbing sort of person.

    We all accept as reasonable people, there must be some “give and take” with the policy, but we only ever hear “take, take”. I am sure if Heatley had been able to show there were regular occasions when he paid for something out of his own pocket rather than the taxpayers, then he would have made it known to the Auditor-General and it would have been mentioned in her report. That this is not reported suggests it never happens.

    This is not the sort of person who should be in Cabinet, or Parliament. And there will be others like Heatley, represented through all the parties in Parliament.

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  12. GJ (329 comments) says:

    Personally I agree that Phil Heatley made a mistake, but who amongst us has not also done that. It is from our mistakes that we learn far more from rather than from our victories.
    Phil Heatley obviously has a conscience and that is why he resigned. Good on him, we need more like him.
    However its time now for him to return to Cabinet and I hope that he does as hewas proving to be a very good Minister.
    The people of Whangarei also appear to be standing strongly behind their Man showing that he must be doing a good job for them also.

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  13. Blue Coast (165 comments) says:

    Very simple in my view. If you are spending some one elses money you make bloody sure you know the rules. No exceptions.

    Lack of knowledge is no excuse.

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  14. Chris2 (766 comments) says:

    GJ @ 3:47pm – using your logic you would be arguing that since Mary-Anne Thompson has now, after 22 years, finally admitted her “mistake” in claiming to have a PhD (yes she used that same word, too – funny how it’s always a “mistake”) then she should be reappointed CEO of Immigration?

    The point is, there are many, many other honest people with integrity who want to be Cabinet Ministers or CEO’s of Government Departments, there’s no shortage of them, so why would you want to re-employ someone who has already demonstrated poor judgment?

    Here’s a novel idea, instead of rewarding the cheats and financial liars, lets reward the honest ones!

    You know, if the Rugby Unions had a policy of dismissing players convicted of crime, the number of drunken All Blacks committing criminal assaults would stop overnight.

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  15. GPT1 (2,121 comments) says:

    To be fair this report was required although I suspect it cost more than the money was about. Although some principles go beyond the cost factors and this is one of them.

    Pleased to see mistake rather than intent. I suspect anyone who knows Heatley or as dealt with Phil would have expected the same.

    Pathetic response from Goff: Labour leader Phil Goff said Mr Heatley had demonstrated a sense of entitlement in his use of his ministerial credit card.

    That’s the same Goff who was a minister in a government who used taxpayers money to overspend in the 2005 election. It’s called hypocracy Goff.

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  16. Bevan (3,924 comments) says:

    Looks like you are wrong DPF – Heatley is returning to cabinet according to the Herald.

    GPT1 – Fuck Phil Goff, once his Credit Card details are made available for all an sundry, those words can be used against him.

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  17. GPT1 (2,121 comments) says:

    Bevan – that was my original draft!

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  18. big bruv (13,880 comments) says:

    Heatley being reinstated is bad on so many levels, however, the message it send to the people is this, if you steal and pay it back then that is OK.

    You could not get away with that in the private sector so why the hell should these bastards get away with stealing our tax dollars.

    Key is in danger of becoming as arrogant and corrupt as Klark.

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  19. GJ (329 comments) says:

    Chris2: No I wouldn’t be advocating that. The evidence is now out on Heatley and I think he has paid a huge price for a lesson that would certainly have been well learnt. Just look at the evidence that came out on Mary-Anne Thompson. Absolutely no comparison in my books.

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  20. Bevan (3,924 comments) says:

    Bevan – that was my original draft!

    Yeah, but you have more tact than me.

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  21. first time caller (384 comments) says:

    To Phil’s credit he stood down during the investigation, so took a massive pay cut plus the risk of not getting back. This is a huge difference from the previous govt. They were forever standing down and having a holiday on full pay!

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  22. jaba (2,141 comments) says:

    at a risk of being pillared, I think Phil’s behaviour (not his lax accounting) is pretty minor and he will learn from it .. he has had his 1 and only strike.
    His talk in Puke last year about housing and fisheries was good and in fact, his knowledge of his fisheries showed a very great understanding. A local fisherman had spent time with him and showed faith that Phil was someone he/they could rely on in the future .. sorry but there you go

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  23. dad4justice (8,208 comments) says:

    All that sit in the Beehive are corrupt. How long can they continue to deny the terrible lies and actions of the inner circle pollies and their wayward partners!

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  24. Muzza M (291 comments) says:

    Possibly snother pre-determined outcome, in other words a complete and utter bullshit cover up.
    Big Bruv @ 5.25pm, Amen to that. Try telling the IRD you were confused about the rules, prepare to bend over and get the rogering you may or may not deserve.

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  25. dad4justice (8,208 comments) says:

    Key and his comrades are just like the Liarbour freakshow, that is, expert cover up bullshit artists. I would trust a snake before a politician.

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  26. menace (402 comments) says:

    The sooner these fegs realise they are public servants the better, enough of these large salaries, slaps on the wrist. what we need is much smaller salaries until they prove they understand what there position is and respect it, when they fucking lie its bloody obvious they don’t have the interest in kiwis/NZ in there heart as they are suppose to. Sack the muthafecker cants when they cheat and make room for those that have true sincere interests in our country FFS !!!!!!!! how bloody obvious is it that when they are cheating they are not of any benefit to us?

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  27. V (719 comments) says:

    And what was the cost of this absurd investigation to the taxpayer?

    More that $1200/$2400 I suspect. No matter we’ll just borrow more money.

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  28. Robert Black (423 comments) says:

    “UPDATE: I was wrong. Phil has been reappointed. While I am pleased for him personally, I actually think it is the wrong decision. The thing people hated about Labour was the revolving door nature of Ministerial stand downs.”

    Totally agree this looks more than bad for National.

    Along with the drastic welfare cuts we may just see their quick demise which is a pity.

    John Key had promise just a few bad decisions.

    Maybe he should have consulted the likes of Guyon Espiner (is that how you spell his name?) and Paul Henry before making such decisions.

    Let’s face it a few talented media individuals pretty much run the country now in one way or another.

    Re-run the tapes of Heatley saying he should spend a lot of time in the back benches, you may just see some very good acting.

    Well, not bad.

    But perhaps not good enough.

    Bad decision all round by National.

    Winegate.

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