Fran O'Sullivan: More than a storm in a champagne flute

Serious Fraud Office director Adam Feeley's investigative team drank a $70 bottle of bubbly left behind by directors of a failed company. Photo / Brett Phibbs

For an exercise in sheer effrontery, Serious Fraud Office director Adam Feeley's response to questions on why his investigative team drank a $70 bottle of champagne "left behind" by directors of the failed Bridgecorp deserves top marks.

To a standard inquiry by Herald journalist Jared Savage last week, Acumen Republic's PR flack Sarah Knowles responded this way on Feeley's behalf: "The investigation into Bridgecorp was one of the largest in the SFO's history, demanding long hours and great commitment from the staff. At the conclusion of the project, it was appropriate to acknowledge the efforts of staff on this matter. In that particular case, it involved a modest number of drinks on a Friday evening within the SFO offices."

No self-respecting journalist would be fobbed off by such ridiculous flannel.

Two hours later, Feeley responded to Savage, this time in a direct email.

"The explanation is quite simple. During the first six months of the Eden Park redevelopment, the redevelopment team was based in the former headquarters of Bridgecorp - John Waller being both the liquidator of Bridgecorp and the chairman of Eden Park Redevelopment.

"Three or four bottles of champagne were left behind after the sudden exit of the directors following liquidation. One bottle was kept with the expectation that it would be drunk at the conclusion of the project.

"By quirk of fate, I ended up at SFO before the completion of the project, and considered that - there being no better claimant to the bottle - it was not unreasonable to recognise the completion of a major investigation and the efforts of the staff with a drink.

"I would struggle to think that any reasonable person would consider a $70 bottle of wine an outlandish recognition. Equally, in the context of a $460 million failed company, I doubt that any reasonable person would take issue with the use to which the drink was put."

The standard PR rule in a case like this is to stop digging.

But the SFO director is so assured of his righteousness that he cannot see that he has brought his own office into disrepute by this misjudgment.

Clearly, Feeley also doesn't know his boss well enough.

When the Herald story broke, Police Minister Judith Collins promptly asked the State Services Commission to investigate the "employment" matter.

Collins - who is not known as the Crusher for nothing - is understandably furious that the SFO director, whom she personally hawked around town as the sheriff who was going to drive the fraudsters out of Dodge City in the wake of the multibillion-dollar finance companies sector collapse, would trivialise such an important issue.

Collins is a tougher bird than Prime Minister John Key or Finance Minister Bill English, who have each trivialised the matter. If I read her correctly, she will see this as a matter of character.

The full facts are yet to be disclosed.

The commission has to make full inquiries into just how Feeley came by the bottle of Gosset champagne. But clearly those inquiries must also involve the Bridgecorp receivers PricewaterhouseCoopers, given that Feeley's email directly mentions insolvency specialist John Waller.

There may be simple explanations why "three or four" bottles of champagne were left behind after the directors' "sudden exit". But Bridgecorp's investors are entitled to seek assurances that all the company's assets - however minor - were cashed up in the usual fashion and not purloined by the next inhabitants of their former offices.

What should concern Collins is other material now in circulation questioning just what is going down within the SFO.

Feeley's hired gun approach upset many of the SFO staff he inherited when he took over the office.

Many experienced forensic investigators left. He now has a new executive team in place and has shifted to new premises nearer the Auckland waterfront. That's part and parcel of change.

The State Services Commission investigation may conclude that Feeley was unwise to take the bottle of Bridgecorp champagne home with him.

But the real issue is whether Feeley has compromised the SFO's ability to prosecute the Bridgecorp directors.

The same day Rod Petricevic, the company's chief, was charged over alleged Bridgecorp payments of $5.2 million, Feeley emailed his staff saying "it's been a fantastic week" because of the prosecutions against Bridgecorp and other high-profile investigations including one of Five Star Finance.

"In light of the Bridgecorp charges being laid, there is a bottle of Gosset champagne [which] needs to leave the confines of my fridge at home and be drunk by those involved with the case," said the email on May 19 last year.

From what I have gleaned, the SFO has had drinks on previous occasions after laying prosecutions.

But celebrating the prosecutions with plonk that came from the alleged fraudster's company is not standard operating procedure.

Surely Feeley must have felt he was compromising his investigating team's independence by inviting them to imbibe the Bridgecorp booze?

Petricevic - who will defend himself in court - now says it was "vindictive" of Feeley to crack open a bottle of Bridgecorp's bubbles to celebrate criminal charges against him.

"I'm surprised and I'm really quite appalled to be quite honest. I wouldn't have thought this situation is one for celebration," Petricevic told the Herald.

He said the SFO was celebrating the "misfortune" of people being charged and it was an upsetting time for him, his co-accused Rob Roest and their families.

"It is not as if it was a win, it was people being charged."

Asked whether he would like the champagne replaced, Petricevic said that wasn't the issue.

"As an employee of the Eden Park Redevelopment Board, he took the bottle. And then, in a different position, he chose to celebrate with it? I mean it's surprising, quite vindictive and unusual."

There will be more of the same when Petricevic - who will be defending himself in court - questions the SFO's forensic accountants during his trial on why they drank the Bridgecorp champagne and whether celebrating the charges in such a fashion disclosed outright prejudice.

This whole furore smacks of a co-ordinated campaign to put pressure on the Bridgecorp prosecution.

But a "storm in a champagne flute", Prime Minister? I don't think so.