The resignation of the Auditor General last week should have been a big deal. There are so many outrageous elements to the whole story, and enough unanswered questions about all of the institutions involved, to make the public doubt that New Zealand really is as free of corruption as we often assume. As 1News's Peter Williams said about the latest chapter in the saga: it is "outrageous, extraordinary, staggering, appalling".

Anyone concerned about the health of democracy and integrity of the political system should take a close look at what has gone on. It suggests that there's a fair amount of rot in our political system.

Background to the whole rotten scandal

The Auditor General is one of the most senior positions in the governance of New Zealand. And the appointment of the Auditor General is a very serious role undertaken by a cross-party group of MPs - the Officers of Parliament Committee (OPC).

Early this year this group of MPs decided to appoint Martin Matthews, who had previously been the CEO of the Ministry of Transport, during which time serious fraud took place. I explained this in an earlier column in May, Can the Auditor-General be trusted to combat corruption?.

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The upshot is that Matthews is accused of being incompetent or soft on fraud and corruption. And despite widespread reservations, he was appointed by Parliament to the role by the politicians anyhow. But a public and media backlash, together with whistle blowers going public, led to an official investigation by Sir Maarten Wevers - see an update I wrote two weeks ago about the investigation - see: Expect an extraordinary report on corruption and whistleblowing.

And then, finally, on Thursday last week the Auditor General announced that he would resign over the issue - see Isaac Davison's Auditor-General Martin Matthews stands down, investigation remains a secret.

Investigation report suppressed by Parliament

The report was due to come out on Friday, yet at the last minute it was announced that it wouldn't be made public. This is what 1News' Peter Williams labelled as "outrageous, extraordinary, staggering, appalling" - see his excellent opinion piece, Secrecy over Auditor-General saga staggering and appalling.

Williams' article is worth reading in full, because it explains the role of the politicians in appointing Martin Matthews to the job, despite many reservations about him. But the most important part is his questioning about why the official report into the appointment has been suppressed by the politicians - and this is worth quoting at length: "But don't the public have a right to know just what went so badly wrong in the appointment and recruitment process last year? This is an appointment to one of the important jobs in the country, and it was royally stuffed up because the right questions were not asked of the right people last year. I suspect Sir Maarten has discovered this during his investigation, and has made some pointed comments to the OPC about how they got it so badly wrong. The OPC, under the chairmanship of the Speaker, has decided it does not need to have its blushes and inadequacies exposed in public - so it has shut the shop. Under law, we can do nothing except be outraged."

Parliament's reputation is at risk from the decision by the politicians to censor the report. That's the warning outgoing Labour MP Sue Moroney made yesterday in her valedictory speech to Parliament - see Ryan Boswell's Parliament's reputation at risk if report into fraudster Joanne Harrison not made public, says outgoing MP.

As this news report explains, "Moroney was instrumental in bringing the case to light, and pushing for an inquiry", and she said yesterday in her speech that the scandal has already wrecked many reputations, and she did not want "the next reputation wrecked to be that of the New Zealand Parliament." She explained that "The one major lesson I take from this episode is that transparency and accountability are the best disinfectants for fraud and dishonestly."

Moroney also said she'd had to fight the "old boys network and the Wellington mafia over the Auditor-General's appointment" - see Benedict Collins' MP fought 'Wgtn mafia' over Auditor-General's appointment.

Why has the report been suppressed?

The decision not to release the report has been made by the politicians. The cross-party group of MPs made the decision which, according to Speaker David Carter, was "unanimous". Jane Patterson reports that the Speaker was refusing to comment on the substance of the report, and he explains why it was being kept from the public: "subsequent to receiving the resignation... the committee determined there was no need for us to do further work on either of those reports" - see: Auditor-General was given resignation deadline.

She also reports that others on the parliamentary committee also spoke in favour of suppression: "Trevor Mallard, voted for it to be kept secret, saying once Mr Matthews had resigned, the process had come to an end".

The Speaker, David Carter, did go on Newstalk ZB to justify the suppression. His interview has been described by journalist Peter Newport as "extraordinary" and "alarming". You can listen to it here: Carter: 'No value' in releasing report after Martin Matthews resigned.

Carter's sympathy for Matthews is very clear in the interview. And he dodges a challenge about the lack of transparency caused by suppressing the report, simply saying "It's been transparent enough for me."

Politicians against suppression

Although it was a cross-party group of MPs that voted to suppress the official investigation report into the Auditor General, there are a number of politicians dissenting from the decision. Winston Peters is the most critical, being reported as saying "You cannot have an inquiry that goes to that level at some significant expense into such a high office and then keep the findings secret from the taxpayer" - see Benedict Collins and Craig McCulloch's Auditor-General resigns over fraud investigation.

The same article cites Peter Dunne calling the report a "full and devastating critique". And elsewhere Dunne has said "Given the extraordinary nature of the circumstances and the fact that the Auditor-General's chosen to resign, I think it's pretty difficult for it not to be made public frankly."

But other MPs are either wanting the discussion to go away, or justifying the suppression of the report. Sam Sachdeva reports: "Green Party co-leader James Shaw supported the decision not to release the Wevers report, and said he trusted the committee's process" - see: Auditor-General resigns but report stays secret. Shaw says "I think now we can move on".

Labour leader Jacinda Ardern also had very little to say about the Auditor General and the report: "Look in my view he's made a decision, it's obviously something that he's now dealing with with his family - I don't have any further comment to make on it."

However, former Prime Minister Geoffrey Palmer has spoken out today about the issue, expressing his unease over how the scandal has been handled, and why the report has been suppressed - listen to his 15-minute interview on RNZ's Nine-to-Noon: Former PM 'concerned' over departure of Auditor-General.

Media voices against suppression

The media played an important role in asking questions about the whole scandal and pushing Parliament to launch an inquiry, and unsurprisingly there are now plenty of media voices unhappy about the report being kept from the public.

The Dominion Post rejects the politicians view that this scandal can simply be pronounced to be over: "If only it were that clearcut. The convenient timing of Matthews' resignation does not tie this scandal up with a nice, little bow. The Wevers review was to look into Matthews' suitability for the auditor-general's position, yet none of the details look like they will see the light of day" - see the editorial, Auditor-General Martin Matthews right to quit.

The editorial also adds: "Sadly, and somewhat ironically, that detail will not be accessible under the Official Information Act. Hardly a shining example of transparency that this case desperately needed for any real resolution to be reached."

Newstalk ZB's Barry Soper makes the same complaint: "The organisation that oversees Parliament, and is now custodian of the report, isn't subject to the Official Information Act" - see: Withheld report only prompts more questions. He argues for the report to be released: "In the interests of political transparency though, surely the public has a right to know what the investigation uncovered and it's simply not good enough for the politicians to bury it."

Nadine Higgins agrees with this, arguing that "Sunlight, as they say, is a great disinfectant, and you can't learn anything from a report that no one is allowed to read" - see: Sunlight is a great disinfectant.

Left, right and others against suppression

Unsurprisingly, Transparency International New Zealand has opposed the suppression of the report - see RNZ's Releasing Auditor-General report a 'no-brainer'. And so has the PSA, who have said "It's vital that public trust in the integrity of the Office of the Auditor-General is maintained, and the reluctance to release this report could call that into question and invite all manner of speculation on the case."

Leftwing bloggers have reacted strongly, too. Martyn Bradbury says: "the report must be released! We must know what the bloody hell happened here! It is an outrage that they will hide the report, we the public deserve to know how a man like Matthews managed to become the Auditor-General when his incompetence at the Ministry of Transport was so egregious! We have all waited for this report, that it's been hidden is unbelievable" - see: Government Corruption Outrage! Report must be released to NZ voters!.

And the No Right Turn blog says: "The committee's cosy secrecy robs us of that, and prevents the public service from making the necessary changes to ensure that fraud is stamped out. And while that might suit arse-covering politicians who want this all to just go away, it fundamentally betrays the public. That report needs to be released. If its not released, it needs to be leaked. And if anyone wants to send it, my mailbox is always open" - see: We have a right to know.

And, voice of the right, David Farrar seems to agree, saying: "This is a very bad decision. The public deserve to know the full facts about what happened, especially if it has led to the Auditor-General's resignation" - see: Auditor-General resigns.

Finally, the best coverage of the whole Auditor General scandal has come from Peter Newport, and he's now published the most critical reaction to the resignation and suppression of the report. His article should be read in full, especially because it raises further questions about how far the rot goes in the political system, and whether fraud and corruption are generally being suppressed in New Zealand - see: After Martin Matthews: Who audits the auditors?.