A damning report into how the Environment Ministry handles employment matters was released today just hours after its chief executive Hugh Logan resigned.
The report by Deputy State Services Commissioner Iain Rennie found no evidence Climate Change Minister David Parker directed the ministry to hire Labour Party activist Clare Curran for a May to July, 2006 contract worth $30,000 but showed the ministry had not followed proper processes and was not tendering contracts.
He said the ministry did not appear to have learned and would probably act the same way again.
Former ministry public relations contractor Erin Leigh quit her job telling media the Curran appointment was political interference.
The scandal followed another where Madeleine Setchell lost her ministry communications job because her partner works for the National Party.
Today's report praised Ms Curran's performance and she told NZPA she felt exonerated by the report.
However, National says the report is a white wash and Mr Logan - who has apologised three times over controversies this year - the fall guy for Mr Parker.
Mr Rennie said Ms Curran was hired through a non-competitive process. He discovered 84 per cent of contracts - worth between $10,000 and $50,000 in 2006-07 - did not go out to tender.
"These practices raise significant value-for-money, legal and probity risks for the ministry."
The report painted a picture of a ministry under pressure with an increased work load as climate change became a priority for the Government.
Seventeen people including Mr Parker, Ms Curran, Ms Leigh, former communications manager Neal Cave and Prime Minister Helen Clark's adviser Heather Simpson were interviewed under oath for the report.
It detailed how Mr Parker suggested Ms Curran for the role because she had done work for him before and that his private secretary Justine Daw described Ms Curran as his "right-hand woman" in a email to set up a meeting with Mr Logan. She also gave the impression Ms Curran was replacing Ms Leigh, which was not the case.
State Services Commissioner Mark Prebble said Ms Daw used the right-hand term to sell the meeting and "overcooked" the relationship.
Mr Rennie questioned whether it was wise for the minister's office to be involved in the meeting at all. He said subsequent emails made it clear Mr Parker understood hiring decisions were up to the ministry.
There was a conflict between what Ms Leigh and others said.
"My assessment of the evidence is that it suggests that there was no direction from the minister to the ministry to engage Ms Curran."
He criticised the ministry for briefing the minister on progress of the contract process which had nothing to do with him and said it could have taken action to counteract rumours about Ms Curran's role.
Mr Rennie said the contracting process was poor in other ways - offered verbally and only signed a fortnight before it ended. He also said potential conflicts of interests were not checked out.
"The fact that the work produced by Ms Curran does not indicate any apparent conflict is more a matter of good luck rather than good management by the ministry."
Dr Prebble was asked if there was a culture problem in the ministry but said he could not speculate.
However, the issue of consulting the minister was generally clear; "you just don't".
Dr Prebble defended the senior management team but said he shared Mr Rennie's concerns.
"I know that team will be able to work to get things right in the future."
He said coming up to an election neutrality had to be protected.
"Of course I will talk about that with whoever is the acting chief executive and the new person taking on the job."
Mr Logan was not in charge when Ms Curran was appointed. However, he was at the helm during the Setchell saga which concluded with David Benson-Pope resigning from Cabinet. His ministry gave advice to Environment Minister Trevor Mallard who later apologised for criticising Ms Leigh's performance.
Dr Prebble would not say if he asked Mr Logan to stay - he was 18 months into a five year contract - but agreed with the outgoing chief executive that a "fresh start" would be good for the ministry.
"I do hugely value the work that he has done, we will miss him."
Dr Prebble has offered Mr Logan research work on a salary about a quarter of his $320,000 annual pay.
His notice period starts from February 1 because he was taking leave before then and needed two weeks to finish up.
Dr Prebble said there was not a direct link between the report and the resignation.
"Mr Logan has decided it's time for a fresh start."