Kiwiblog

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.

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?

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?