By VANESSA BIDOIS and JAMES GARDINER
In the eyes of his West Auckland disciples, urban Maori messiah John Tamihere can do no wrong.
Ten years as leader of Te Whanau o Waipareira Trust have elevated the champion of the poor to the status of sainthood among those followers.
So financial failings and allegations of mismanagement during his time as chief executive of the powerful pan-tribal authority have been a bitter and divisive blow.
Following so closely behind news of the financial disaster that has hit arch-rival the Tainui tribe, the Waipareira situation provides more ammunition for critics of Treaty of Waitangi settlements and Maori desire for self-determination.
The trust and its various businesses get more than $8 million a year of taxpayers' money to fulfil state contracts in health, welfare and education.
Herald inquiries have found that companies under the trust's economic development arm have exposed the Waipareira whanau (family) to huge financial risk.
Millions of dollars have disappeared from Westland Ltd, a property company of which Mr Tamihere is a director and which Waipareira half owns.
Accountants have identified serious flaws in financial reports and accounting policies. As a result of their work, a trumpeted $5.8 million surplus for the 1998-99 financial year was revealed as a $2.3 million deficit.
It was also recommended that $10 million be slashed off the $62.5 million valuation given to the new Westgate shopping centre at Massey North.
Westland is the majority owner of Westgate but may decide to sell that stake to cover its other losses.
These include about $330,000 loaned to cash-strapped associate entities Onix - a security firm of ex-SAS soldiers - and Craftworld, which may have to be written off. Another Westland investment, Solidwood, is in liquidation.
Waipareira is trying reduce its stake in Westland from 48.8 per cent to 40 per cent. It is asking for $1.3 million for those shares and some of that money will be used to repay debt.
Although Westland is the largest business in Waipareira's economic development unit, it is by no means the only one.
According to the Waipareira banker, the BNZ, the trust lost $830,000 through ownership of the security firm NZ Guard Services and the rubbish enterprise Mantech.
Waipareira's chief executive for the past seven months, Ian Mackintosh, says he inherited the mess, which he blamed on the management during Mr Tamihere's time in charge.
He cited an example of a last-minute decision to refurbish the Wai Health premises at Henderson, which includes a doctor's clinic.
The cost, which had not been put in the budget, was expected to be $300,000. It was nearly $500,000.
That had to be paid off with cash allocated for daily operating expenses.
Waipareira's 1998 annual report said the business investments were a source of income for the trust, but then added that most of the profits being made were being "reactivated against ongoing opportunity, building up the asset base of the whanau."
Another interpretation could be that the money was needed to cover the losses of the companies that were not performing. Whether any of the money from the Government contracts was regularly channelled into trust businesses is not clear. Some trustees are adamant it did not happen, others are less sure.
The trust has acknowledged that $200,000 from the Health Funding Authority was placed in the account of Aotearoa Maori Rugby League, but said that was a one-off clerical error and the money had been repaid.
Whether it was one-off is a matter now under investigation by the Auditor-General.
Waipareira's former financial controller Mike Tolich - who resigned this year - says hundreds of thousands of dollars in profits from Government contracts were regularly paid back into trust coffers by its social services and health arms.
Waipareira has openly acknowledged running many of its operations on a shoestring budget. Allowing just $30,000 per employee and relying on loyalty and volunteers to make up the difference meant it could undercut competitors for contracts.
In recent weeks, several former employees have contacted the Herald saying lack of resources and failure to get appropriately qualified staff into the right positions made failure inevitable.
Several state agencies have launched investigations into the delivery of contracts, including the Corrections Department and Work and Income New Zealand.
Top-level inquiries by the Maori affairs select committee and Prime Minister Helen Clark are also under way.
Mr Tamihere has staked his political future on nothing untoward being found. Many of his followers have more at stake than that.
Maori trust faces questions over finance
AdvertisementAdvertise with NZME.