• At a meeting to discuss payments between Team New Zealand and a taxpayer-funded event company, chief executive Grant Dalton spoke of the need to "boogie" the numbers
• A professional director suggested the syndicate's new finance boss write what he called a "clean-up" memo, adding later that "we're not going to call it a clean-up"
• The director, David Gibson, was advising on a memo to go to a board meeting, but couched the comments at one point as if they were an explanation of the accounts to "Mr Auditor"
• A recording of the meeting was offered to a forensic accountancy firm probing the arrangements between Team New Zealand and America's Cup Event, and the Ministry of Business, Innovation and Employment (MBIE). They both declined to take it, saying they did not need it
• A separate email shows Dalton and former Team New Zealand chief financial officer Greg Kemp discussing the $3 million fee in much more broad terms than that which it was justified to forensic accountants, and describing the money as "borrowed", arguably contradicting other evidence
• Dalton has responded by dismissing the evidence as snippets from disgruntled former contractors, with an audit finding no wrongdoing. Team New Zealand have issued a series of legal threats in a bid to stop publication
• A High Court judge has said the Herald is seeking to report on matters "which appear to be of public interest"
Grant Dalton discussed the need to "boogie" the numbers as Team New Zealand worked out how to explain charging a taxpayer-funded event company millions of dollars to design the boats to be used in next year's regatta.
At the same meeting in November 2019, professional director and corporate adviser David Gibson suggested Team New Zealand's new chief financial officer prepare a "clean-up" memo to explain why a series of payments - one made more than a year earlier - could be justified.
At that time the ACE (America's Cup Event) board had not formally seen details of the payment. It is not clear whether the board had formally met at all at that point, despite being established to host the America's Cup around 18 months earlier.
While the Government has pointed to an audit it commissioned earlier this year, which Team New Zealand say represents "total vindication", the Herald has obtained materials which appear on the face of it to be at odds with the findings.
For weeks the Herald has been trying to seek comment on the materials from ACE, Team New Zealand and MBIE, why they were not considered by the MBIE appointed investigators, and why establishing the appropriateness of a $3m payment of public money from ACE to Team New Zealand no longer appears to be a priority. To date, no substantive comment or explanation has been provided.
The Herald is publishing the materials despite threats from Team New Zealand and event company America's Cup Event. The syndicate and the Government are flatly refusing to answer questions about them, beyond claiming it is an attempt by former contractors to damage the team.
The governance of America's Cup Event, awarded tens of millions of dollars to run the latest iteration of the world's oldest international sporting competition in Auckland next year, came under further scrutiny this week when court documents saw Mayo & Calder, contractors to ACE who were fired after turning whistleblower, claim ACE had neither a written constitution nor a formal board when they took concerns to the Government.
Despite promising to provide up to $40m from the taxpayer, the bulk of the budget of the event, at no point has MBIE had representation on ACE's board. Both of ACE's two directors were previously Team New Zealand directors.
At the meeting last November, both Dalton and Gibson acknowledged the payments between the two companies were controversial, long before a storm over Team New Zealand's financial affairs would become public.
A recording of the meeting was offered to Beattie Varley, a firm of forensic accountants tasked with investigating whistleblower allegations, as well as to MBIE and its external legal advisers.
But they both declined to take possession of it, saying they did not need it, even though what was being discussed, the appropriateness of the $3m payment, was a central part of Beattie Varley's investigation.
Early in the investigation, Beattie Varley took materials and interviewed the whistleblowers, at the request of MBIE, while Team New Zealand and ACE largely stonewalled the probe.
In the course of the second part of the investigation, Beattie Varley appeared to have little or no contact with the whistleblowers, while Team New Zealand and ACE offered a far more detailed account. In the end Beattie Varley was not required to determine whether the $3m payment was an appropriate use of public money. MBIE and the syndicate agreed to send the dispute to mediation under the terms of the contract under which the public money was provided to ACE.
MBIE has refused to allow Beattie Varley to discuss its probe with the Herald.
The whistleblowers claimed the $3m design fee started out as a loan but was later reclassified into a fee for designing the foiling system for the yachts to be used in next year's event.
Team New Zealand have flatly denied there was ever a loan between the two organisations.
Beattie Varley's report found the claim that the money started out as a loan could "not be sustained". To come to that conclusion it demanded to interview Team New Zealand's former chief financial officer Greg Kemp, overcoming initial resistance from Team New Zealand.
Kemp told Beattie Varley he came up with the $3m fee and the timeframe over which it was charged, for work on the foil cant system, in mid-2018.
That explanation appears to be at odds with emails between Kemp and Dalton from November 2018, showing Dalton asking how much money had been "brought across" from ACE to Team New Zealand.
"We have the reimbursement amount of 'services provided by [Team New Zealand]' but we also 'borrowed' against Omega future payments - as they were a confirmed sponsor," Dalton wrote.
Kemp responded that at the time the only money paid by ACE to Team New Zealand was a $3m payment "which was a management fee charge for work done by [Team New Zealand] staff".
He did not mention boat design, saying the fee was for "setting up the crucial event related documents (Protocol, Class Rule) and initial discussions/work regarding the venue, potential challengers and team base/event village location options".
Kemp has not responded to repeated requests for comment.
The recording of the November meeting includes discussions between Dalton and new chief financial officer Shane McAlister about how to work out what time period and which personnel should be included in a schedule to support the charge.
We're not going to call it a 'clean-up' memo
The underlying theme of the meeting appears to be about creating an explanation for payments from ACE to Team New Zealand for the purposes of convincing the board of ACE to sign them off, knowing that the accounts might later be audited.
ACE chairwoman Tina Symmans was present during the entire discussion. ACE's only other director, Greg Horton, was not.
Gibson explained to McAlister that "what we're doing is to say we're having a clean-up, right? And so it's a board paper. You know, we're not going to call it a clean-up but, you know".
McAlister responds: "Yeah yeah, no no no."
David Gibson: "So what we're doing is the following thing. We've gone back to March. We've done, here's these things, these invoices, here's the things that are controversial. These are the reasons why we think it's in, it's all squeaky clean now, right? That's kind of what the board paper should read."
Gibson adds later: "So that's all it is, is a board paper saying 'clean-up' without using the words 'clean-up'."
Earlier, McAlister had asked Gibson about what the memo should look like, saying: "Okay. Have you got any template or any design of what one of these is going to look like?"
Gibson replies: "No. Haven't done this before."
Boogie that number
The recording, obtained by the Herald, gives an insight into Dalton's thinking on the circumstances of the makeup of the $3m design fee.
He discusses with Gibson the $5m given to Team NZ straight after they won the cup in Bermuda with the $3m fee eventually paid from ACE to Team NZ.
"You've got to boogie that number [the $3m design fee] from the time that five million ran out, otherwise, you're double dipping."
Elsewhere in the meeting, Dalton describes the process under which Team New Zealand was planning to draw $684,000 from ACE to cover the shared costs of staff which worked across the two organisations.
"It's a boogie, but it's actually, it's actually more real than the other one, in reality."
Dalton asked the meeting why the companies had decided to make the charge in December and not February next year?
Tina Symmans responds: "Because we're going to run out of money."
Dalton: "Exactly. That one is way more defendable than the first one."
Symmans: "Don't say that. The first one's got to be defendable or not."
Gibson: "Well, they've all got to be defendable."
Days after Beattie Varley refused to take further evidence from the whistleblowers, MBIE, America's Cup Event, Team New Zealand and Auckland Council issued a statement welcoming the findings of Beattie Varley's final report.
That report would say that ACE's management and governance deserved criticism for its lack of records - in such a state that Beattie Varley could not test whether ACE's account of events was correct.
But Beattie Varley concluded it had not seen evidence that ACE had breached the HVA, the contract through which the company was given the public money and free use of land on the Auckland waterfront.
A little over a month earlier ACE rushed to court to prevent the Herald from publishing details of an earlier, interim report by Beattie Varley.
When a summary of the second report was released Team New Zealand chairman Sir Stephen Tindall said it amounted to "total vindication".
The comments prompted a round of mostly uncritical media coverage.
But ever since Team New Zealand have been less forthcoming.
Dalton and Symmans have refused to answer any specific questions or make themselves available for an interview.
They issued a short statement rejecting allegations of a cavalier attitude towards health and safety and accused former contractors Mayo & Calder of a campaign to undermine the team. Symmans claimed that health and safety was on the agenda at "every" board meeting.
Tindall has not responded to a series of emails.
Even Hamish Hooper, who handles media queries for Team New Zealand, did not respond to questions about ACE's governance for weeks.
On Thursday, when the Herald put it to Team New Zealand that Dalton and Kemp had discussed money borrowed from ACE and had discussed the fee in far more broad terms than foil cant design, Dalton issued a short statement, framing the revelations as an attempt by Mayo & Calder to hurt the team.
"It continues to be clear that snippets have come directly or indirectly from Mayo & Calder who, it is well known, are disgruntled former contractors to ACE and were sacked for collecting confidential information and surreptitiously taping conversations over many months attempting to build a destructive narrative in an effort to inflict serious damage onto ACE & [Team New Zealand]," Dalton said.
"This resulted in an audit being commissioned by MBIE to look at all allegations made by Mayo & Calder. As already widely reported, these allegations have been proven to be completely incorrect in the final Beattie Varley report where no financial impropriety or wrongdoing was found."
Dalton has refused to say what he meant by the need to "boogie" the numbers.
Gibson, who appears to have been brought in to assist ACE by Symmans, has also refused to engage with the Herald.
A former investment banker, Gibson now sits on the board of a number of listed companies, including NZME, the owner of the Herald.
He has not responded to calls, emails or text messages about his comments at the meeting or what he observed at ACE. He did forward one set of questions from the Herald to ACE's lawyers, Lee Salmon Long, who used it to accuse this Herald journalist of breaching a High Court injunction.
The letter from Lee Salmon Long was just one of a series the firm has been sending on behalf of ACE.
Team New Zealand have pleaded with the court to allow them to keep information about how they had conducted their affairs secret.
In an affidavit which tried to convince the High Court not to allow media to access documents submitted in their legal battle against Mayo & Calder, Russell Green, their "legal and rules adviser" urged the court not to allow confidential information to be made public.
"If such material enters the public domain it can be reported on out of context, or we could be forced into a position where we have no option but to comment on that material," Green wrote.
"We are not seeking anything remarkable - we simply want to be treated fairly and on the same footing as any other business (or sports team) who is entitled to confidence over its operations, finances internal communications and meetings."
Green's statement went to some length to attempt to detail the Herald's reporting efforts, suggesting that the application may be a misuse of court process.
Justice Matthew Palmer was dismissive of Green's argument about the propriety of the Herald's application.
"The Herald is clearly seeking to report on issues which appear to be of public interest and will no doubt co-ordinate with whoever assists in that," Justice Palmer wrote. He was not "about to second guess the Herald's bona fides in reporting in a fair and balanced manner on these proceedings".
MBIE has also been trying to slow the release of information.
When it initially released a summary of the Beattie Varley report it flatly refused to make anyone available for comment.
Most of its answers to specific questions have simply restated the conclusions of the Beattie Varley report.
When it did eventually agree to an interview, Carolyn Tremain, MBIE's chief executive, became upset when the Herald asked whether the Beattie Varley report was really an attempt to determine whether wrongdoing had occurred.
"I feel like you're inferring something that hasn't occurred here, and it really, I'm sorry, I just don't feel like we've got a constructive line of questioning here."
At this point, MBIE communications staffer Anthony Bull cut across Tremain, making a comment which appeared to suggest Beattie Varley's report was a full examination of the whistleblowers' claims.
"There were claims, we looked into it, the report's come back. I don't know how many other times we can point that out."
MBIE had refused further interviews and selectively treated some of the Herald's questions as Official Information Act requests, slowing the reporting process.
A later statement from by MBIE revealed Beattie Varley's job was not to test the accuracy of statements made by ACE or Team New Zealand.
"Beattie Varley's role wasn't to test the veracity of specific statements," said MBIE's general manager of tourism, Iain Cossar, but only "whether ACE and [Team New Zealand] had complied with their respective obligations in regards to the event expenditure" as prescribed under the terms of the HVA.
WE SAY: By Stuart Dye, Weekend Herald editor
The America's Cup holds a special place in Kiwis' hearts.
New Zealand teams have never been far from the headlines for the best part of 35 years, from the plastic fantastic KZ7 in 1986-87, to Michael Fay's big-boat challenge in 1988, to the glorious Team New Zealand-winning exploits of 1995 (San Diego), 2000 (Auckland) and in Bermuda in 2017. Who can ever forget the sight of Team NZ's "cyclors" helping power the Kiwi catamaran to glory over Jimmy Spithill's Oracle three years ago.
The NZ Herald and our owner, NZME, are proud supporters of the America's Cup - we've invested in the event on many fronts, including sending reporters, photographers and commentators to the event across the globe. It's dominated front pages and news bulletins since 1987, and - more recently - website homepages.
Our sister radio stations have the audio rights for next year's event. It promises to be an incredible spectacle.
That does not, however, mean we neglect our obligation to ask questions that arise in the strongest public interest. Around $40m of public money has been invested in the Auckland event - and taxpayers have a right to know a) that that money is being spent appropriately and b) that the official oversight of that funding - at Government and council level - is being conducted properly.
Team NZ and ACE have denied any issues around the way public money has been handled. Today, we reveal more details and insights into how the two organisations explained a $3m fee - part of the $40m taxpayer funding. We will continue to ask questions, seek answers, and report our findings in a fair and balanced manner - even in the face of heavy legal threats. We will continue to probe MBIE and other Government officials around their own roles and actions. Our readers, we believe, expect no less.