Parliament's Speaker David Carter says he has had to accept that New Zealand First MP Denis O'Rourke is not in a relationship with his taxpayer funded employee and housemate Stephen James.

NZ First's justice spokesman Mr O'Rourke was the subject of a complaint to Mr Carter by Queenstown man David Simpson who claimed Mr O'Rourke and his out of parliament assistant Mr James were in a long term relationship. Parliamentary rules forbid MPs from employing their spouses.

But in a response to Mr Simpson yesterday, Mr Carter said the pair, who share a home in Christchurch, had denied they were partners when asked by Parliamentary Service.

"Based on the information made available to me I have to accept that Mr O'Rourke and Mr Jones are not spouses or partners and as such the decision by Parliamentary Service to employ Mr James did not contravene... the Speaker's Directions", Mr Carter told Mr Simpson.


Mr Simpson had also raised issues about Mr James' travel to Wellington but Mr Carter noted the terms of his employment required him to work in Wellington, " and on two occasions he travelled to Wellington at the Parliamentary Service's expense".

"However, Mr James' travel on both occasions was for parliamentary business and was in connection with his job."

Read the letter here:

Mr Carter said he was "assured that there has been no misuse of parliamentary funds to meet the costs of Mr James' travel to Wellington.

Responding to Mr Simpson's claims that Mr O'Rourke had also been involved in placing a bogus testimonial for his classic car hire business on Trade Me, Mr Carter noted that was "outside my area of responsibility".

"In closing, without further substantial evidence to allegations that have been made, I can take this matter no further", Mr Carter said.

Mr Simpson this morning said he was "absolutely disgusted because it didn't pass the sniff test in the first place."

He confirmed he had laid a complaint with police over the bogus Trade Me testimonial placed by Mr James three months before Mr O'Rourke became an MP in 2011.

Mr O'Rourke has said he knew Mr James had placed the reference but, because it was done before he was an MP, he did not need to apologise to the public. "It's probably not proper but it's no big deal, I wouldn't have thought."

Mr O'Rourke last week said Mr Simpson's complaint was "just politically motivated nonsense."

While he initially told the Herald he and Mr James lived at separate addresses, Herald investigations revealed both addresses applied to the same property - Mr O'Rourke's home.