Kiwiblog

NZPA report that Chris Clarke has resigned as CEO of the Hawke’s Bay District Health Board.

I think this was inevitable and necessary. The inquiry into the DHB highlighted a number of inappropriate actions by Clarke, and he didn’t have the confidence of his Board.

The last straw may have been his plans to speak at a conference about how to deal with conflict in a board room. He claimed he never agreed to speak and it was a mistake. However the agenda actually listed not just him, but how his presentation would ahve four parts to it – what happened, why it happened, what a CEO can learn from it and Why it is working so much better now.

His agreement to do this, without even the knowledge of the Board Commissioner, is another example of flawed judgement.

Tony Ryall has delivered a nice win-win on the issue of the Hawke’s Bay District Health Board. Letting the judicial review continue of the sacking by David Cunliffe would have been costly. It would have been tempting to let it continue though as the local Councils would have almost beyond doubt won a ruling that the sacking was illegal, and the evidence would have been very embarrassing to the former Minister.

But more important was to move forward and the decision to transform Sir John Anderson from Commissioner to Board Chair, and reappoint the Board Members who were elected in 2007. This means it is not just going back to the past, but using the skills also of Sir John and his team.

Tukituki MP Craig Foss has been blogging a series of documents about the HB DHB, released under the OIA. These deserve some critical scrutiny.

The latest is fascinating.

• 14 months before the DHB was sacked, Peter Hausmann was suggesting future appointees to the Minister
• He was proposing a way to stop the Board Chair being elected to the Board
• He suggests an Ian Wilson be appointed Deputy Chair
• Ian Wilson, was appointed as Chair of the Review Panel which coincided with the Board being sacked

While WIlson may have been unaware Hasumann was promoting him, it certainly shows that Hausmann was plotting against the democratically elected Board for a long period of time, and presumably having a receptive ear in the Minister who eventually sacked them.

Craig Foss has some fascinating information on the Hawke’s Bay District Health Board sacking. One justification for the sacking was an allegation board members doctored minutes of an audit committee meeting. But, who really did the doctoring? Read what Craig says:

In this case the minute taker, who is also the HBDHB Internal Auditor, took notes, wrote up the draft minutes and sent them to the Audit Committee Chair and CEO for review prior to the draft minutes being sent to the other Audit Committee members.

This is normal practice in most organisations – the meeting chair and CEO see the first draft.

Then began a series of email exchanges between the minute taker and senior management. Essentially senior management challenged the first draft of the minutes, suggesting they needed to have significant changes made to them. The minute taker, who is also the internal auditor, resisted this and said that the minutes should reflect a balanced record of the proceedings. The minute taker stood his ground, and in the end it was suggested that if management wanted to make significant changes they should raise these concerns at the next Audit Committee meeting when the minutes were to be approved.

Now here you get into a real area of concern. The internal auditor was correct to stand his ground, if he did not feel the changes management wanted would fairly reflect the meeting.

The correct course of action would be for the senior management to talk directly to the meeting chair (who is the officer who legally has to sign off minutes after ratification by the committee) and discuss with the Audit Committee Chair any concerns they had over the minutes.

Even more disturbing is the fact that this is the Audit Committee which has a special role in scrutinising how management perform, and that senior management are trying to change the minutes without discussing it with the Audit Committee Chair.

Independent to the above, the draft minutes with some changes but nothing major, made by the Audit Committee Chair, were sent to the other members of the Audit Committee and CEO. That should have been the end of the discussion. But, an additional set of minutes, never seen by the Audit Committee Chair, that included changes made by senior management were sent direct to Minister Cunliffe, who then used them as evidence to sack the HBDHB.

Management do not have the power to change minutes. It is grossly improper. And in this case it seems these doctored minutes were produced by senior management against the desire of the internal auditor who actually was the minute taker for the meeting.

It is not clear of the Audit Committee formally ratified the minutes at their next meeting, but that is what should happen – the committee itself testifies as to their accuracy.

The first the HBDHB members knew of these “new” minutes was when they were released as part of the Ministers HBDHB sacking media pack labelled as “Document H”.

This sound like juicy fodder for the judicial review. It also sounds like a strong reason why the Auditor-General must review the management of the District Health Board.

Bill Ralston and Fran O’Sullivan both write in the HoS on the Hawke’s Bay DHB. We’ll let ladies go first, and quote Fran first:

Atkinson believes the inquiry should have addressed other issues that the former board recently uncovered. These include the secret emails between Hausmann and the executive, which Ryall told Parliament showed Hausmann changed tender documents to his advantage. Ryall said both parties withheld these and they came to light only after independent forensic analysis of the back-up tapes.

This also highlights why independent external inquiries with powers to compel evidence are preferable, to inquiries like Ingram and this one which are limited in what they can do.

And now Bill speaks:

When neither you nor your spouse is having an affair it is probably best that you do not write letters and make public statements denying any shagging is going on.

This is political common sense 101, yet former Health Minister Annette King has done exactly that in a breathtaking act of stupidity, neatly adding the missing ingredient of sex to the scandal surrounding the Hawkes Bay District Health Board.

I said much the same. An MP or spouse having or not having affairs is not a matter for the media, but by having written the letter (while Minister of Health), it has meant the issue does hit the public domain.

After the board was controversially sacked by new Health Minister David Cunliffe, King went public, alerting media to the sex rumours. Now, when confronted by reporters with questions about the letter, she accuses the media of being part of a “dirty tricks campaign” and refuses to confirm the letter exists, saying she cannot find it on the ministerial database, avoiding the question of whether she wrote it privately to the board employee.

Heh, I am trying to imagine the look on the face of the Ministerial Secretary if it had been done through the office and entered into the database. First of all how do you classify a letter which threatens someone over alleged affairs by the Minister’s spouse. I doubt it would fit in any of the standard categories!

The report is more interesting for what is not in it than what is. It doesn’t cover whether King should have appointed Hausman; it doesn’t comment on the fact that board staff gave Hausman tender documents ahead of rival bidders; it doesn’t look at Lind’s involvement with the whistleblower or Hausman’s company.

Yes, once again anything like the above was ruled out of the terms of reference.

Perhaps most of all, the report failed to acknowledge that the DHB became a “culture of mistrust and dysfunctional” only after King appointed Hausman.

And it was all predictable.  Appointing a board member against the advice of the Chair flies in the face of good governance. If you are going to do that, you should replace the Chair.

Meanwhile, Cunliffe continues to threaten the sacked board with further investigations of what it may have been up to, King burbles on about a dirty tricks campaign against her and the combined local bodies, and the sacked board prepares for legal action against the Government.

It is a mess that won’t go away until there is a full, transparent, independent inquiry into what happened.

Indeed. And if we don’t get one in 2008, maybe a new Government can order one in 2009?

There is a somewhat bizarre story in the Dominion Post about Annette King allegedly writing a letter to a HB DHB employee regarding rumours her husband was having an affair.

I’m only covering this because it is in the media. A couple of people have made comments in the past on this blog alleging such an affair.  I immediately deleted them, and will do so to any comment on this thread which makes accusations of that nature. I don’t really care if it is true or not and don’t see it as relevant.

What I find bizarre is if a warning letter was written to Jacqueline Parisi, because according to the story she is the one who alerted Ray Lind to the rumours. Now normally one would be grateful if someone informs you of rumours you are having an affair.  So, why would you write a letter to that person? Let alone send it to the CEO to give to the employee.

And if you are Minister of Health at the time, it appears unwise to write to a DHB CEO on a personal issue, asking him to deliver a personal letter to an employee.
I know a couple of high profile people who have had to put up with malicious gossip allegaing affairs with a particular person, and their response is to have their lawyer write a letter to the person spreading the rumour – instead of them personally writing. That is the safer course of action. Or of course not to put anything in writing at all is an option.

By having written a letter while Minister of Health to a DHB CEO and employee, King has given the media the excuse to write about the issue.   The media never need much of an excuse to cover an issue like that – the Brash alleged affair went public based on a report of a discussion at a private Caucus meeting.

Like with Don Brash and Je-Lan, Annette King and Ray Lind have my sympathies for their private life becoming a media issue.  Despite my policy differences with her, I have always regarded Annette King in a positive light, and she was a very likeable opponent in 1996 when I was part of the National campaign team in Rongotai.

But the letter (if it exists – it seems even that is disputed) seems unwise. As I said, it gives the media an excuse to write stories about it.  I do have to say that personally I fail to see the relevance – I can’t see how any of this is relevant to the issues around the Board and conflicts of interest in contracts.

There are numerous stories in the Hawke’s Bay District Health Board report.

First the main Herald story by Paula Oliver:

But it is what was missing from the report which will be the subject of ongoing argument.

The review did not canvas questions of whether former Health Minister Annette King should have appointed Mr Hausmann to the board.

The panel decided that topic was out of the scope of its report.

The report also did not delve into allegations that the board’s chief executive Chris Clarke colluded with Mr Hausmann over a contract.

The treatment of the whistleblower who drew attention to the conflict also was not canvassed in the report.

Yep, it all comes down to the terms of reference.  This is how the Ingram Report found Field had done no wrong, yet the Police have laid dozens of charges against him. Ingram was only allowed to look into Field’s actions as a Minister. Likewise this report was not allowed to cover Annette King’s actions or the actions of management.

John Armstrong writes the report vindicates David Cunliffe’s decision to sack the Board:

Health Minister David Cunliffe professes to be satisfied with the damning findings of the independent review of Hawkes Bay’s troubled district health board.

Satisfied? Cunliffe should be satisfied – deliriously so. If his Beehive office were not so cramped he would have been excused performing cartwheels across it.

But he notes:

While Cunliffe can claim to have been vindicated, King, however, cannot claim to have been cleared by the report in terms of the wisdom of appointing Hausmann to the board.

Determining that it was outside the scope of its terms of reference, the panel rejected the board’s request to examine King’s role.

Marty Sharpe in the Dom Post focuses on the former Chair, KevinAtkinson, calling it a whitewash:

Kevin Atkinson, sacked with the rest of the board last month, says the “weasel word” report is a “whitewash in every sense of the word”. He urges the auditor-general to investigate.

But Health Minister David Cunliffe says the report, which criticises the board for failing to meet basic conflict of interest procedures and highlights major rifts with senior management, justifies his decision to sack it.

There certainly was a rift with senior management. But if I was a director and my senior management had been secretly taping conversations, improperly allowing a fellow director preferred access to RFP details, not implementing board decisions etc then I might have a rift also.  Whose fault the rift is, is something that was out of bounds for the report as management were excluded. The Auditor-General is his report on one contract found much to criticise.

NZPA reports today that the Minister denies any political interference with the report, and that there is more information to come out.

Finally the Dom Post editorial says the report misses the big picture:

The report makes no comment on the wisdom of former health minister Annette King appointing Mr Hausmann, the managing director of a company with significant interests in the health sector to the board, no comment on the wisdom of board staff giving Mr Hausmann a tender document ahead of rival bidders for a district health board contract and no comment on the appropriateness of the board’s former chief operating officer Ray Lind, Mrs King’s husband and now an employee of Mr Hausmann’s company, secretly recording a meeting with the whistleblower who first questioned the appropriateness of an e-mail from Mr Hausmann to a staff member.

Mr Wilson says that is because the focus of the review was governance. But given the disquiet created by the sacking of the board just 72 days after it was elected, the existence of a substantially different draft report, the contents of which the National Party has begun dripfeeding in Parliament but which The Dominion Post has been prevented from reporting by lawyers acting on behalf of the director-general of health and Mr Hausmann, and the relatively narrow focus of the inquiry, the report will not be the end of the matter.

The board was clearly remiss in its handling of conflicts of interests. Quite possibly it deserved to be dismissed. But the wider question of whether or not Mr Hausmann should ever have been appointed to the board has not been addressed. Nor has management’s role in the debacle.

The region has been poorly served by the board, board staff and government ministers.The only beneficiaries are the National MPs campaigning to retain the Napier and Tukituki electorates later this year.

Indeed it is far from over. The number of unanswered questions remains high.

After days and weeks of the Minister and Peter Hausmann suggesting that the final MOH report would clear everything up, hey presto it is released today and by avoiding minor little issues such as why someone with such massive conflicts was appointed in the first place, it gives people a tick.

The report is on the MOH website and is a massive 190 pages. The report itself is very fine within its careful terms of reference (and has some very good recommendations).  Things people should note are:

• management’s conduct and performance was excluded.  Now recall there was a near civil war between the governors and management, and only the governors were reviewed.
• The deletion of e-mails is not covered
• The treatment of the whistleblower is excluded
• The taping of conversations by Ray Lind is not covered
• The Minister’s decision to appoint Hausmann is out of bounds
• Any disclosures by Hausmann prior to appointment are not covered

You see it all is like Yes Minister taught us.  Frame the terms of reference correctly and you are guaranteed a report which will not cause problems.  Clark did the same with the Ingram Report.  This casts no aspersions on the report writers, but shows the limitations of the type of inquiry chosen.
Despite that the report by no means “clears” Hausmann. On numerous occassions it states he should have acted differently. But in the end I don’t think Hausmann is the main issue here. Other board members are also slated.

The report makes clear Hausmann had been working with the DHB since 2003 on possible public/private joint ventures. It is exceedingly clear Annette King should never ever have appointed him to the DHB.  With all respect he was probably the most conflicted person in NZ with regard to that particular DHB.  Her decision went on to cause almost all the problems.   If she had left him off the board, his company might today be engaged in a happy partnership with the DHB.

Despite the criticism of Hausmann in the report, I’m prepared to give him some benefit of the doubt and say he did try to do the right thing most of the time.  But his company was so involved with the DHB at so many levels, it was always going to be near impossible – you had DHB managers asking him for advice all the time.  He probably should have been appointed CEO not a DHB member.

If one really needs to point fingers I think DHB management is a place to start. Numerous board decisions were not implemented, and it is the DHB CEO and senior staff who should have been providing the advice to DHB members on handling conflicts. The fact the CEO was tied up in the middle of all the problems made things worse.

Finally the report notes:

As such, the views contained in the draft reports were preliminary views expressed at the time that the drafts were provided. The Panel now considers that a number of these preliminary views were wrong.

That is an extraordinary change for a draft to final report.  I will be very interested in seeing the draft report when it comes out.

And the question once again I would ask if why did Annette King appoint Hausmann?  Officials in MOH and DPMC were concerned.   She did not follow best practice with an interview panel. She ignored the concerns of the current Board Chair. His conflicts were probably bigger than any other person in NZ for that DHB. She claims it is all because she chatted to him at some cocktail function and was impressed by him.

David Fisher puts his investigative skills to good use in the latest issue of The Listener. The article will not be online for a week or so, so I really recommend people interested buy a copy.  Some key points I noted:

• The e-mail between Hausmann and CEO Chris Clarke in January 2006, discussing details of the contract Hausmann was tendering for, was only accessed by Board Administrator Deborah Houston as she was filling in for his PA. Hence there may have been many more e-mails like that.
• King’s appointment of Peter Hausmann was at whim, and while legal (she can appoint anyone she wants) failed to follow best practice by having the potential appointee go before an interview panel.
• The Cabinet Appointments and Honours Committee staff alerted King’s office to the extent of Hausmann’s conflicts of interest
• A senior Ministry of Health staffer wrote a letter describing Hausmann’s appointment as posing a “huge risk”.
• Peter Hausmann asked for an inquiry not just into his own actions, but for a full review of the Board’s performance and governance. The Ministry of Health advised there was no need for this, and that it should be into Hausmann’s conflicts only as they believe “these are prima facie serious matters”.
• Pete Hodgson ignored the Ministry advice, and by making the review so much wider, meant the review took much much longer to complete, which in itself led to greater dysfunction.
• Ray Lind recorded several conversations with staff and board members, without telling them at the time.
• These secret recordings were only discovered when PWC audited the e-mail system and found Lind had e-mailed himself a copy – the e-mail had been deleted but was on the backup tape.
• Hausmann had access to the RFP months before his ten competitors did, and at least one of them complained about the lack of time to respond when it went public
• The e-mails to and from Hausmann regarding the RFP were deleted from the DHB’s e-mail system. This is arguably illegal under the Official Information Act.
• The only backup tape which had the e-mails was May 2005, and of the 12 backup tapes given to PWC, it was the only one damaged.
• DHB Management were severely criticised by the Audit Office for another (Wellcare Education) contract they gave to Hausmann’s company.
• An e-mail from Hausmann, after he was appointed to the Board, was sent to a senior manager extensively advocated on behalf of Wellcare Education, which Hausmann’s company’s owned.

The failings of both King and Hodgson, but also Lind and Clarke seem numerous. Deleted e-mails, official advice ignored, preferential treatment, secret recordings, appointments without interviews, to name a few.

What Annette King has yet to answer is why she appointed Hausmann? She says she just met him and as impressed with him.  But why did she ffail to follow best practice? She says she was not legally obliged to do so.  Fine, we know that.  But the question is why did she not have an interview panel as normal?

And has Pete Hodgson explained why he ignored the advice from Ministry officials who had no political interest in the outcome? Did he talk to King before making that decision? Did he talk to Hausmann, Clarke or Ray Lind?

And why did DHB management not once, but twice, fall over themselves to give preferential treatment to Hausmann?

The above advertisement was paid for personally by several former DHB members. And unlike former member Peter Hausmann, they won’t be sending the taxpayer a bill for $511,000 for legal fees.

Hat Tip: Whale Oil

A good thing may emerge from the sacking of the Hawke’s Bay District Health Board just a couple of months after they were elected. A questioning of the whole DHB structure.

Up until these events, people like myself who advocated DHBs should not be elected, were a very quiet minority. A month ago Matthew Hooton wouldn’t have been able to joke that he thinks Cunliffe should sack all 23 DHBs.

But by showing how DHBs are there to do as the Minister tells them, and that they have little control over important stuff such as funding, the Emperor’s new clothes are displayed.

So we see the Dom Post today saying:

Before Labour formed the government in 1999, health spokeswoman Annette King promised to return democracy to public healthcare, writes The Dominion Post. She argued people were agitating to get back around health board tables so they could have a say in what services their public hospital should provide.

Enter, in 2000, 21 district health boards, each with its own government-appointed chair.

The boards are a cruel hoax. Just how cruel was underlined last week when a King successor, David Cunliffe, sacked the board Hawkes’ Bay voters elected just months earlier and installed a “commissioner” instead. …

The need for a commissioner in the Bay reinforces the health management trick perpetrated on the public. Since DHBs were born, this Government has pretended that their seven-elected, four government-appointed members are those who decide local healthcare priorities. It has also deflected criticism of government funding and priorities their way.

What it has deliberately downplayed is the fact that it, via the Health Ministry, still pulls the strings by setting board budgets and circumscribing their activities. It has also glossed over the reality that, though communities go through a three-yearly charade of half-heartedly electing board members, they serve at the minister’s plea sure. That brutal fact has now come home to Hawke’s Bay voters. …

Mr Cunliffe’s strong faith in his own ability will be no more than self-aggrandisement unless he has the courage to tell the prime minister Labour’s fatally flawed health board model needs fundamental, albeit gradual, overhaul. He won’t. National, if it forms the next government, apparently plans no change, either. Because the electorate doesn’t trust it over public healthcare, it will tread lightly. …

They are indeed a charade and a hoax. The Minister should appoint the DHBs (and there should be less of them) and the Government should be accountable to the publci for their performance.

Some quotes from Hansard relating to yesterday’s question time in the House:

Hon Tony Ryall: Is the Minister aware of the email that shows that chief executive Chris Clarke instructed staff to send draft tender documents to Mr Hausmann—who had indicated he would be a bidder—some weeks before the tender process opened, and before any other bidder saw the documents; and is this acceptable behaviour?

Surely this is a joke. No CEO would have draft tender documents sent weeks early to a potential bidder, and even more so if they are on your Board.

Hon Tony Ryall: Is he aware of this email that shows that Mr Hausmann, appointed by the Labour Government, having received this confidential draft tender document, proposed changes that would benefit his company, and is that what he would expect of someone being appointed to the board of that very district health board?

If I got inside information on a government tender, I wouldn’t suggest changes to it. I’d delete it unread.

Hon Tony Ryall: Is he aware from this email that the chief executive agreed to alter the tender documents in precisely the terms proposed by Mr Hausmann, at a time when no other bidder had such access, and is that a proper and ethical process?

Now Tony must be kidding again. Surely no CEO would actually let the party planning to put in a bid for the tender, rewrite the tender document to better suit them.

Hon Tony Ryall: Is he aware that the final document that went out to all tenderers incorporated the changes proposed by Mr Hausmann, whose company was the eventual successful party, and does he think that all potential bidders were fairly treated equally in this process?

Maybe he isn’t kidding.

Hon Tony Ryall: I seek leave to table the emails and documents mentioned in my questions.

Leave granted.

Well if the e-mails have been tabled, I guess we can judge for ourselves if Tony was just making this up or these e-mails do actually show what is claimed.

But wait that isn’t all. In the next question, we learn that these harmless e-mails (move on move on nothing to see here – read the official report when we are happy with it) may not quite have been voluntarily handed over the the inquiry team:

Hon Tony Ryall: Is the Minister aware that the material revealing secret emails between Hausmann and the executive, in which Hausmann changed the tender documents to his advantage, was withheld from the inquiry by both parties and came to light only after independent forensic analysis in London of the back-up tapes; and what does that say about the balance of truth in this inquiry?

Now this must be incorrect. Surely a DHB with obligations under the Official Information Act wouldn’t simply delete embarrassing e-mails.

Hon Tony Ryall: Would the Minister have confidence in the chief executive of the Hawke’s Bay District Health Board if it was confirmed to him that this information was withheld and came to light only because of specialised forensic analysis in Britain of the back-up tapes, which were mysteriously damaged?

The back-up tapes were damaged? What an unfortunate coincidence. Please do not connect the dots. The dots have nothing to do with each other.

 There is a very useful article in the Dom Post with Annette King commenting on her appointment of Peter Hausmann to the Hawke’s Bay District Health Board:

Former health minister Annette King is standing by her decision to appoint Peter Hausmann to Hawke’s Bay District Health Board, and says she was not advised against doing so.

That is a peculiar thing to say when it is later reported:

Former board chairman Kevin Atkinson, who was sacked with the rest of the board last week, told The Dominion Post he advised Ms King on two occasions – in person and over the phone – to delay the appointment of Mr Hausmann till the tender process was completed.

and

An internal ministry e-mail from a senior analyst to the ministry’s DHB governance manager, Bruce Anderson, dated August 28, 2005, and obtained under the Official Information Act, identifies the ministry’s concerns.

The ministry advised that Mr Hausmann’s position on the board, even if he did not take part in discussions about the contract, would not address the public’s perception of fairness and might deter other companies from bidding for the tender.

King goes on to say:

Ms King said Mr Hausmann was appointed with the expectation that his conflicts of interests would be managed.

“Most potential board members do have potential conflicts of interest,” she said.

“That is not the issue. It is how they are managed and the disclosure of them.

“If handled at a governance level appropriately, these are not a problem.”

The issue of conflicts of interests is a vital one for DHBs. If they do not manage them well, then you can end up with what happened in Auckland with a massive laboratory testing contract cancelled by the High Court. So this is not a minor issue.

But Annette misses the major point. Yes many DHB members have conflicts of interests – but these are generally the result of DHB elections. Voters tend to vote for anyone with Dr in front of their name. The whole point of the Ministerial appointees is to balance the Board up with people not conflicted. And sure some Ministerial appointees may have minor conflicts but this was the largest possible conflict one could have – heading up a company which would tender for a $50 million contract.

Managing such a conflict is always going to be very very tough, even if everyone behaved perfectly (and there seems to be some evidence they did not). You see it is not just about having the DHB select the best company for the contract, but being able to manage that contract afterwards. If the contractor doesn’t perform as well as expected, it is a awful situation to manage if the contractor’s CEO sits on your own board.

I don’t subscribe any evil ulterior motives to Annette King in her appointment of Hausmann. I just can’t understand why she would have done it. The Board Chair was advising against it (and it is very very rare to appoint a Director against the wishes of a Chair), the Ministry of Health raised issues about it, and she knew he was going to be tendering for a major contract. Why create all these problems which could have been avoided by simply not appointing Hausmann or appointing him to another DHB where he wouldn’t have been conflicted?

Let me put it another way. If Annette King had not insisted on appointing Hausmann, does anyone think the DHB would have ended up sacked as has now happened?

This is not to say Hausmann himself is to blame (I do await the reports with interest though), for he was placed in a position by King where fallout like this was almost inevitable.

UPDATE: Tony Ryall has read in the House from some explosive e-mails, and has also alleged they were not given to the inquiry but recovered by forensic experts in London. I’ll blog the Hansard when it is available.

Just been listening to yesterday’s politics segment on Nine to Noon:

•  Matthew Hooton spoke on how Maori Party may have overhang of six seats, and well placed to help choose the next Government
• Laila Harre says Labour can not form Government without the Maori Party and without an overhang for the Maori Party. That will doom MMP in my opinion if a Government only gets a majority because of the overhang
• Harre  says if there was a credible alternative to Clark her leadership would be under threat, but there is no credible alternative
• Hooton points out Goff is 0% in preferred PM polls, and he will be grateful for that because if he was at 5% or so, then he might be pressured to stand.
• Best lines were Hooton saying “I always support any sacking of any District Health Board” and “if he wants to be bold, he should sack them all”
• But went on to say that sacking a board just 72 days after it was elected seems unwise, especially with allegations which involve another Government Minister.
• Also funny was when Matthew asked Kathryn Ryan and Laile Harre who the voted for on their local DHB and let’s say there were no quick answers. Hell I doubt I can even recall who I voted for without checking.
• Harre doesn’t support DHB amalgamations

Always my favourite Nine to Noon segment – but I am a politics junkie.

What I find interesting is I listen to half a dozen Nine to Noon items a week – but none of them live – all from their website.

Marc Ambinder at The Atlantic blogs on the numbers showing how tough it will be for Hillary Clinton to pull back Obama’s lead. He finds that even a rosy scenario has Clinton only reducing Obama’s lead by 60 – 80 delegates.

Colin Espiner blogs on the latest polls.

Keeping Stock blogs a quote from Helen Clark on the sacking of the Hawke’s Bay District Health Board:

“But my view is that I don’t really care what the rights and wrongs of what was going on within the board are – I don’t believe that you can run a decent health service for the people of Hawke’s Bay while that is going on.”

I should think the PM should deeply care about the rights and wrongs.  The members of the DHB whose reputations are affected by this sacking certainly care.

Russell Brown comments on his blog on the context around the photo of him at the Hero Debate.

Whale Oil has a video on Labour’s health problems.

Paul Walker has a hilarious video on economics.  Yes seriously it is funny.

Donna Chisholm in the SST quotes from an Audit Office report on the Hawke’s Bay District Health Board. Now I can’t find the Audit Office report online, but it doesn’t look great for the Government which has effectively sided with Peter Hausmann and the management, by dismissing the entire Board.

Chisholm states the Audit Office reports finds the following:

• There was a contract to Wellcare Education, a subsidiary of Hausmann’s company Health Care New Zealand, for a pilot project to train 16 long-term beneficiaries as homecare workers in a partnership with the Ministry of Social Development.
• A total of 11 failings were found in the process.
• The $1.1m contract included a $256,000 payment to Wellcare, over two years. Board members say they have never been able to establish the reason for this.
• Management kept the Board unaware that the contract had been proposed until one month after it had been agreed and signed – despite the fact it involved on of their own board members
• It is understood Hausmann’s discussions with senior staff about the contract began as early as August 2005, six months before he declared his conflict of interest.
• The contract processes did not comply with either the board’s procurement policies or public sector good practice and there was no evidence of formal conflict of interest procedures being undertaken.
• Management could not explain why an open tendering process had not been used.
• No reasons or justifications for the selection of Hausmann’s company were recorded in files.
• The contract was signed without evidence of a completed approval process.
• Payments were made before services under the contract were delivered when they should have been tied to milestones which reflected completed work.

Now bear in mind this is only a report into the $1.1 million contract. We are yet to see the report into the $50 million contract.

UPDATE: Local MP Craig Foss has several relevant blog posts on this issue, citing board minutes and written questions about the fact the contract was not tendered, and how the CEO told the Board initially it had been.

Michael Laws in his column (and he is on a DHB) describes the true nature of DHBs:

Every piece of legislation that governs DHBs essentially says the same thing.

Your arse is mine. The minister drives policy and everybody else, whether elected or not, is simply there for show. Kevin Atkinson and his Hawke’s Bay DHB forgot that simple truth. They were never in charge; they were elected/appointed to do the minister’s bidding.

But by having some of them elected, it gives the illusion of local control, and gives the Minister scapegoats.

Expecting Cunliffe to “sort out” health would be like asking Winston Peters to sort out the Middle East. It’s not a case of where you would start so much as a case of the complete system is stuffed. Just like the Middle East. You would need a neutron bomb and the sure knowledge that only starting all over again would have any impact.

That’s a fair call. The demand for health is unlimited, so there will never be a truly sorted out health system.

Ministers don’t have that luxury. Instead they get the dubious privilege of managing all the major and mini crises until some other poor bugger gets allocated the portfolio. So they don’t need stroppy DHBs who think that their primary aim is to expose health contract corruption, run deficits and generally deliver way more health services than they are funded for.

Ouch he used the c word.

The truth is that until New Zealand has just four or five DHBs, with the necessary economies of scale and integrated services, and until the public health sector starts paying internationally competitive salaries, then no remedy will be possible. Health ministers know this. But one of their sacred cows is letting the locals labour under the illusion that they are really running their own health services. Reducing, combining or even co-ordinating the current DHBs is essential but too politically difficult.

Illusion is the right word.

Bill Ralston thinks National hasn’t done a good enough job with the Hawke’s Bay District Health Board sacking, and that what happened there is a bigger scandal than anything to do with Owen Glenn.  He paints a nice succinct picture:

A wee while back, Annette King was Minister of Health. Her husband, Ray Lind, was the chief operating officer of the Hawke’s Bay District Health Board.

Against the wishes of many on the health board, King appoints Peter Hausmann to the board. Hausmann runs a company called Healthcare New Zealand and many on the board fretted that he, as a supplier to health boards, would have a conflict of interest as a board member. King appointed him anyway.

It is still a mystery to many why King insisted on appointing someone who would be so conflicted.  Was there no one else?

In a very short time, the chairman of the board discovered Hausmann was involved in email discussions over a tender for a multi-million-dollar contract from the board he was a member of.

Which he had promised he would not do.

A woman whistleblower in the board’s administration brings this to the chairman’s attention.

She alleges Annette King’s husband, Ray Lind, as a senior manager put pressure on her because she blew the whistle. She ends up being restructured out of her job and an employment dispute ensues.

And don’t forget the secret taping on conversations. Also do not forget the DHB CEO is a former staffer for Helen Clark.

Meanwhile, Ray Lind quits and goes to work for Hausmann.

And as the inquiry goes on, Hausmann I think tried to bill the Board $500,000 or so for his legal fees.

Flak flies, King is reshuffled out of the portfolio, her successor dithers about sorting out the rolling brawl between the board and its managers over various contracts being awarded, and the people of Hawke’s Bay respond by backing the chairman and his board supporters by resoundingly re-electing them.

Normally the good people of Hawke’s Bay will disagree on whether the week starts on a Saturday or a Monday, plus every other issue known to man.  One should not under-estimate how rare it is to be able to unite every local body in the region against you (for sacking the board).

An inquiry into the murky goings on at the DHB rumbles away while there is yet another cabinet reshuffle and two-gun David Cunliffe takes over the job and refuses to confirm the chairman in his job.

Then, just 72 days after the re-elected board takes office, Cunliffe sacks them. He says the organisation is “dysfunctional” and it has a “rapidly deteriorating” financial situation. Actually, it’s only $7.7 million in the red, within its target range of coming out plus or minus 1 per cent of its revenue. David Cunliffe might not have noticed, but there is not a DHB in the country that hasn’t had financial problems and the Hawke’s Bay board’s problem is minor.

Indeed it is not clear at all why this Board was sacked when there are other boards who deserve sacking more.  There was no intermediate step taken such as a Crown Monitor. And also unknown is how many of the problems were caused by the Government’s own review taking so long to resolve, and the failure to confirm the Chair.

Cunliffe whinged to me that the board had publicly criticised him and the Health Ministry. Diddums. When you are in politics sometimes people have a go at you.

And he had attacked them publicly.  It must be a new rule that criticism can only be made public in one direction.

He accused the board of having a dysfunctional relationship with its management. Hell, if the management had been getting up to half the shenanigans the board alleges, no wonder the place was dysfunctional.

The concept of allowing staff to choose their governors is a new one for me.

Cunliffe added another reason for sacking the board was that hospital clinicians were critical of it. When are doctors ever happy with their DHB? Besides, only two out of 120 clinicians at the DHB have ever publicly had a go at the board and one of those has since quit.

And the local head of the doctor’s union publicly backed the Board Chair.  This is very unusual for a union head.

Sorry, David Cunliffe sacked the democratically elected Hawke’s Bay DHB because it was causing his Government grief and the board was exposing something rotten that began with the disastrous mistakes of Annette King.

One has to ask once again, why appoint someone to a board who you know is about to have a major conflict of interest with that board?

A very perceptive and balanced article from John Armstrong on Cunliffe in health. Extracts:

Sure, Annette King must take some of the blame as a former Health Minister for the appointment of the board member whose alleged conflict of interest sparked the ructions that have seen the board at war with that member and the DHB’s chief executive.

Indeed.  And it was known at the time he would probably be tendering for a major contract.  Why on earth would you appoint somone about to be so conflicted?

Cunliffe knew what was expected of him: neutralise health as a political issue in election year.

He is also smart enough to know that being effective required a radical change in style in the way the portfolio was handled.

Cunliffe’s approach has been in vivid contrast to that of his predecessor, Pete Hodgson. And presumably deliberately so.

In a portfolio where a political irritant at lunchtime can become a political headache by dinnertime, Hodgson had a tendency to stand back and wait for the relevant DHB to do something.

Cunliffe is far more hands-on and in-your-face. He is a new broom. He conveys a sense of urgency.

Just as well for Labour. For the floodgates opened after his appointment.

This is a fair point.  Cunliffe is at least attempting to manage his portfolio, unlike Hodgson. I do think the conflict of interest issues which tie back to Annette King both professionally and personally, should have made him hold off sacking the entire Board as it looks like protecting King (even if it is not).  I would have just removed the board member with the conflict of interest and then given the Board say three months to gets it shit together.

Cunliffe has not pretended the catalogue of mishaps and errors contained in those reports never happened. But they did not happen under his watch. He is painting himself as a break from the past rather than someone who got the job just because he was next in the queue.

And he is doing things differently, for example, breaking the unwritten rule that ministers keep well away from wage negotiations.

Again I am not absolutely convinced that was a sensible thing to do (sets a precedent) but again at least it is a Minister not drifting along.

The strong community backing for the board and the accompanying backlash against the Government have obliterated any faint hope that Labour might have had of recapturing the Napier and Tukituki seats.

And having local Labour MP Russell Fairbrother come out proclaiming that the only local people complaining about the decision are those with private health insurance is a contender for most stupid statement of the year.

The main worry now for the party is what Cunliffe’s wielding of the axe in Hawkes Bay will do to Labour’s party vote not just in that province, but in provincial New Zealand as a whole.

However, rather than being Cunliffe’s fault, the backlash springs from a fundamental weakness in the DHB model. DHBs are accountable to the Minister of Health for a simple reason. They are funded by central Government. Their assets are owned by the Crown. Yet they are supposed to be responsive to their local communities. At some stage the board of a DHB was bound to end up torn between having to be accountable to the minister but preferring to be accountable to its local community.

This is why I do not support elections for DHBs.  The dual accountability actually means no accountability.  Minister gets to blame the DHB.  The Minister should appoint the entire DHB (but consult widely on the appointments) and in turn be held accountable for how they DHBs do.

NZPA reports:

Hawke’s Bay Regional Council voted on Wednesday to seek a judicial review of the ministers decision and yesterday three more councils — Napier, Hastings and Wairoa — voted to join the action.

Central Hawke’s Bay District Council will vote on the matter today …

National’s health spokesman, Tony Ryall has described the move as “appalling political manipulation” designed to get rid of the board so it could not put its case in a conflict of interest inquiry.

“One conclusion is that there’s a wider political agenda,” Mr Ryall said.

“He kept the Capital and Coast District Health Board despite widespread public opposition, yet he has sacked the Hawke’s Bay board in spite of community support.”

Green Party MP Sue Kedgley said she had “grave concerns” about Mr Cunliffe’s action.

“It appears to be a politically motivated act driven by the minister’s irritation at a chairman of a district health board who was prepared to speak his mind,” she said.

Also read this editorial in HB Today:

Sacking the district health board is a disgraceful betrayal: It abuses the confidence the people of Hawke’s Bay placed in the board, which is only three months old, and it reveals the principle of public participation in health governance to be a sham and at the whim of political convenience …

The region’s mayors plan a legal challenge. The minister says he has been advised it will not succeed. He may well have the whip hand … until November. In the meantime questions need to be answered and in the open. If there are issues then let’s put them on the table. No more smoke and mirrors.

Mr Cunliffe has shown contempt for Hawke’s Bay people. In nine months’ time we will be able to return the favour.

Goodness me, that almost looks like an advertisement under the Electoral Finance Act.

I’ve not had time to do as detailed a post as I would like to on this, and the media have covered the issues well.  So I’ll just ask a few questions:

1. Why would the Minister not sack the Capital Coast DHB (which would probably be met with universal support) but instead sack the HB DHB – something the local community is dead set against?
2. Isn’t it rather perverse to go public with anonymous criticisms of the Board by anonymous surgeons, and then complain when the DHB Chair responds in the media also?
3. Will the majorities of local National MPs Chris Tremain and Craig Foss increase by 25%, 50% or 100%?
4. The Govt is trying to suppress the draft report and the former DHB members the final report.  Why not release both the draft and final and let the public form their own views.  Plus lets face it – they will both end up on the Internet anyway I suspect.
5. Why is the Government apparently punishing the DHB for acting to prevent a conflict of interest in a contract, when the Auckland DHB got lambasted by the High Court for not being diligent enough in dealing with conflicts of interests?
6. Why did Annette King appoint someone to the HB DHB when it was known he was likely to bid for a major contract off them?
7. How bad is it for the Government to have the local Councils taking the Minister to health over the sacking?
8. Has a doctors union ever before praised a DHB Chairman? Don’t they normally refer to all Chairs as cheap bastards who won’t pay us enough.

I look forward to seeing both the final report and hopefully the draft report.

Cactus Kate celebrates the Hong Kong Government giving out NZ5.5b of tax cuts because they took in too much tax.  And that is on top of the fact the top marginal tax rate is 17%.

Craig Foss is outraged over the sacking of the democratically elected Hawkes’ Bay District Health Board after just 72 days in office.

Liberty Scott has the top ten reasons why lefties should hate Castro.

Russell Brown covers the issue of some favourable parliamentary edits in Wikipedia to National MP’s pages. I agree with his conclusion that if you do more than one or two minor edits you should register a profile rather than just do it from your IP address.

A friend gave me an article in New Scientist a couple of weeks ago, about how political persuasion may have a genetic basis.  They found identical twins has more similar political views than fraternal twins, which is quite fascinating.  I had been planning to blog it, but Kiwiblogblog have covered it with links to an extract of the original research.

Daily Tech finds that a 12 month drop in world temperatures has wiped out a century of warming.  From what I can tell this doesn’t mean that human activity is not contributing to warming, just that other factors such as solar activity still have far more influence. Comments from those more up to date with the science here are welcome.

Tim Selwyn at Tumeke has a post on Oliver Driver’s interview with Helen Clark’ and how she seemed unsure how to handle questions criticising her performance not from a right wing perspective but from the left. He also compares how Helen Clark was unable to come up with a single nice thing to say about John Ke, while Key had no problem supplying an admirable quality of Clark’s the previous week. If someone can get the Alt TV interview onto You Tube I’ll link to it.