Grant Dalton, chief executive of Team New Zealand and America's Cup Event. Photo / Jason Oxenham
A top commercial lawyer with long links to Team New Zealand has launched a scathing attack on the government's handling of allegations made about its use of taxpayer funding for the America's Cup.
Greg Horton detailed his concerns in a lengthy statement - sent to Prime Minister Jacinda Ardern and Auckland Mayor Phil Goff - accusing government officials of making misleading claims, the former solicitor general of offensive conduct and of a campaign to have Grant Dalton fired.
Horton, a former director of Team New Zealand, now sits on the board of America's Cup Event, which is receiving up to $40 million of taxpayer funding to run the regatta.
Hours after the Herald revealed that the Serious Fraud Office was showing interest in the taxpayer funding of the America's Cup, Team New Zealand issued a statement attacking MBIE, accusing it of inappropriate behaviour.
Later, MBIE defended its handling of the allegations against ACE, but also disclosed that upcoming mediation would also cover whether the parties acted in good faith.
Accompanying the short statement was a series of documents the syndicate, formed by the Royal New Zealand Yacht Squadron to chase the America's Cup, had sent to both the Ministry of Business, Innovation and Employment (MBIE) and a string of top politicians including Goff and Ardern.
Included was a statement from Greg Horton, a director of America's Cup Event (ACE) of epic scope and proportions, at almost 5000 words. Horton is a founding partner of commercial law firm Harmos Horton Lusk.
The statement was dated September 17. It is marked confidential and recipients at the time were asked not to share it - but Team New Zealand has now made the document public.
It makes a number of claims about an audit ordered by MBIE to look into complaints made by whistleblowers "regarding a range of matters essentially alleging serious dishonesty and even fraud by ACE and [Team New Zealand]," Horton wrote.
"The allegations have all [been] concluded to be untrue, by the Hosts' appointed auditor Beattie Varley," Horton added.
Beattie Varley's conclusion was that it had not seen evidence that proved money for the America's Cup had been misappropriated.
Horton complains almost bitterly that MBIE chief executive Carolyn Tremain had refused to tell the Herald whether she believed ACE had deceived her organisation.
ACE and [Team New Zealand] are not perfect, and we do not pretend to be," Horton said.
"But we are honest."
Horton accuses MBIE of taking a pre-determined approach to the investigation and that even after an interim report, were seeking to have Dalton - and other personnel - removed immediately from ACE.
The desire, Horton said, was communicated when MIE sent ACE an escalation notice, which indicated ACE could be stripped of the rights to host the regatta.
On June 23, in a phone call with Tremain and Team New Zealand chairman Sir Stephen Tindall, MBIE's general manager of tourism Iain Cossar advised the call that "Grant Dalton and other named personnel has to be replaced at ACE".
Cossar "separately advised [ACE chairwoman] Tina Symmans on a phone call on Monday 29 June following a meeting between the Hosts and [Team New Zealand]/ACE where we outlined our position on the allegations (which we had also undertaken in part in writing on 26 June), that Mr Dalton and other personnel needed to be replaced and that was 'non-negotiable'," Horton wrote.
"I have no doubt that MBIE will explain these away as potential outcomes, matters for exploration if the investigation found wrongdoing or similar, but that would be completely out of context with how the messages were delivered and the force with which they were delivered."
Horton went on to appear to accuse Cossar of misrepresenting the position of former Economic Development Minister Phil Twyford.
In August, MBIE, Auckland Council and Team New Zealand issued a statement welcoming the final Beattie Varley report. The statement noted record keeping concerns but overlooked Beattie Varley's criticism of ACE's governance.
Horton said the agreed statement was "substantively agreed on the weekend before release, but on the day of release Mr Cossar sought to introduce wording that was inappropriate and had been agreed to exclude".
Horton added that Cossar "explained to Sir Stephen that the language was included as it was a "bottom line" for Minister Twyford, however when Sir Stephen called the Minister he found out that Mr Cossar's statement was untrue".
Horton said MBIE used the statement in response to media questions, but does not disclose what the disputed statement was.
"I do not see that as being consistent with good faith."
Horton makes detailed criticisms of the communication, accusing MBIE of wrongly claiming legal privilege over documents, slowing the release of Official Information Act requests (it publicly reveals ACE demanded to know who was making OIA requests about it), while prioritising requests by the media.
The letter details a confrontation between Horton and Mike Heron QC (the former Solicitor General) who had been engaged by MBIE.
Horton claimed in a "without prejudice" meeting he proposed a timeline "to create some structure in the Hosts' unstructured process" proposing a timeline in July for the rest of the audit.
"Mr Heron QC was extremely angry at this proposed timetable, calling it an "ambush", and he later stated in writing that I was seeking to "control" the investigation in a way he had never experienced before," Horton wrote, adding that the meeting "degenerated" with the pair becoming angry.
"This led to Mr Heron QC talking over me in a sustained and deliberate fashion, and thereby not allowing me to speak. By way of context, I have an impaired and weak voice from Motor Neuron Disease, which Mr Heron QC knew due our relationship outside of this matter, including our sons going to school together. This caused a severe reaction in my impaired nervous system, with uncontrollable shaking in my legs. Despite that obvious reaction, Mr Heron QC persisted until I angrily managed (with the assistance of our lawyers) to get him to cease his inappropriate behaviour and reinforced that he needed to listen."
Horton said Heron offered an apology which he did not believe was sincere, later claiming the actions were "inadvertent".
"Mr Heron QC's conduct, which was and remains deeply offensive to me, was raised with Ms Tremain of MBIE by Sir Stephen Tindall when he learned of the behaviour."
Elsewhere, Horton claims the Herald's reporting of the handling of a disputed $3 million fee, purportedly for boat design, was inaccurate.
However over several months ACE and Team New Zealand have refused to discuss the fee with the Herald, even about material which appears on its face to contradict what Beattie Varley was told about it.
Heron declined to comment this afternoon.
Team New Zealand has not responded to requests for comment. According to a report by Stuff, Sir Stephen Tindall telephoned Tremain to ask her about the nature of her discussions with the SFO, but she refused to say.
MBIE has not responded to requests for comment.
Stuart Nash, the Minister responsible for the America's Cup, has not responded to requests for comment.
The Prime Minister's office has said it is a matter for MBIE to deal with.
In a statement, Tremain said after receiving allegations about matters at ACE, the ministry "used the contractual provisions of the Host Venue Agreement to engage Beattie Varley to undertake an audit".
Tremain noted Horton's comments that ACE's initial approach to the audit was unhelpful.
"MBIE has at all times treated all parties involved in the process with due respect and strongly refutes many of the issues raised in the letter(s) from ACE," Tremain said.
She revealed that the mediation that had been initially announced would cover the dispute over a $3m design fee had been broadened to cover "issues of the parties acting in good faith".
The mediation is finally expected to start in December. "MBIE looks forward to the conclusion of this process."
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