Cabinet minister Nanaia Mahuta and her husband Gannin Ormsby.
A third government agency is reviewing the process by which it engaged a consultancy wholly owned by Gannin Ormsby, the husband of Government minister Nanaia Mahuta.
The news follows the admission that, contrary to its policy, the agency followed no formal conflict of interest process in procuring the work.
Housing Minister Megan Woods has confirmed that Crown housing agency Kāinga Ora was deficient in its conflict of interest processes in awarding Ka Awatea Services a $66,846 (excluding GST) contract.
The agency awarded Ormsby's company the contract without seeking or receiving a conflict of interest declaration from either Ka Awatea Services or the Kāinga Ora contractor who recommended Ka Awatea Services for the work, Woods said in response to written parliamentary questions put by the National Party.
Woods said "this was an error" as Kāinga Ora has a policy that requires its employees and contractors to declare actual or perceived conflicts of interest. She said the agency has since improved guidance around these requirements.
Woods previously said that "a verbal conflict of interest was declared" when the contract was initiated, however that statement was corrected late last week with the clarification that no "formal" conflicts, written or verbal, were declared.
The Kāinga Ora review is internal and expected to be complete by late November, an agency spokesman confirmed.
There was no communication with ministers in the contractor selection process, he said.
A spokesperson for Mahuta has previously said: "The contract did not require ministerial approval so no conflict was raised [by the minister]."
For those areas where Minister Mahuta has ministerial responsibility, the spokesperson said, where there have been conflicts, "they've been disclosed to the Cabinet Office" and Mahuta "ensures that no conflict exists or appears to exist between her personal interests and portfolio responsibilities, in accordance with the guidance in the Cabinet Manual."
Gannin Ormsby has not responded to the Herald's requests for comment.
Ka Awatea Services was hired to "engage Māori and to understand Māori perspectives on Kāinga Ora urban development work".
Minister Mahuta was the Associate Minister for Housing (Māori housing) at the time Ka Awatea was engaged. Her responsibilities included ensuring that housing for Māori was appropriately catered for in Kāinga Ora work; however, the agency spokesman said the work fell under the ministerial purview of Housing Minister Megan Woods.
While the contract was between Kāinga Ora and Ka Awatea Services, it required the "facilitation" services of Rama Ormsby, a relative of Gannin's.
Until late 2019 Rama was employed by the Auckland Council as an expert in tikanga (Māori customs and culture).
Kāinga Ora said that no written work was supplied by Ka Awatea under the contract. Rather, Rama Ormsby "facilitated" 14 workshops and six hui with Auckland iwi.
The facilitation work began in August, 2020, however, a written contract was not signed until October, 2020, by which point fully half of the hui and workshops had already taken place.
Questioned about this timeline, Kāinga Ora's Te Ariki Pihama, deputy chief executive of the agency's Group Māori, said the agency had a verbal agreement with Ka Awatea to commence work in August. He said no money was paid before a contract was signed.
The National Party's Simeon Brown said he has twice written to the Public Service Commission and called for an investigation into the wider picture of government procurement, Gannin Ormsby, and other of his family members.
Both the National and Act parties say the "extraordinary pattern" of government contracts awarded of Minister Mahuta's husband and other family members requires comprehensive investigation by either the Auditor General or the Public Service Commission.
Kāinga Ora, the Ministry for the Environment, and the Department of Conservation, all contracted work from Ormsby's company, Ka Awatea Services, in October and November 2020. All of the contracts were awarded on a sole source basis, without competitive bids.
A recent Ministry for the Environment (MfE) review of contracts worth $90,000 (excluding GST) awarded to Ka Awatea Services and the consultancy Kawai Catalyst (owned by Ormsby's nephew and his wife Tomoko and Waimirirangi Ormsby) found no political involvement in decision-making.
However, it enumerated a litany of deficiencies in the process of awarding the contracts, including that legal advice was sought very late in the procurement process. The procurement and legal opinion specified that, given the "high" level of risk associated with the minister's "family connections", the work required the chief executive's approval. However, this step was not taken.
The Ormsby family members made up the majority of a five-member Māori group of advisers (rōpū) formed by the Ministry to contribute to a new waste strategy. The younger family members - Tamoko and Waimirirangi Ormsby - were added to the group at a later stage of the planning process (to provide "support services"), and at the request of the three original rōpū members, including Gannin Ormsby.
The review noted that the MfE project manager was surprised to see, in the draft agenda for the initial meeting with potential rōpū members, that it "included two extra people".
The reason provided for the addition of Tomoko and Waimirirangi Ormsby to the group was that: "they work closely with one rōpū member [Gannin Ormsby] in a family consultancy business, rangatahi presence [the presence of young people] is very important to the rōpū, and this was how the rōpū wanted to operate."
The review noted that the conflict of interest risk between Gannin Ormsby and Tomoko and Waimirirangi Ormsby was little discussed or managed outside the broader family connection to Minister Mahuta.
The pair were paid $65,000 (excluding GST) for the rōpū work, through their consultancy Kawai Catalyst.
Legal advice, including the advice of the Public Service Commission (PSC) was sought, albeit very late in the process and only the day before a contract was signed to engage Gannin Ormsby. It advised that being the minister's husband should not preclude Ormsby's involvement in the MfE work, but that "a conflict of interest is present" and a "robust management plan" was needed. Mahuta was Associate Minister for the Environment at the time, though she had no responsibility for waste.
MfE officials never sought PSC advice in relation to Tamoko Ormsby and Waimirirangi Ormsby, who, in procurement documents, were described as having "a close family connection" with Minister Mahuta.
Among the review conclusions was that: "a separate, but related, conflict of interest risk (between a rōpū member [Gannin Ormsby] and the support services provider [Tamoko and Waimirirangi Ormsby]) should also have been assessed."
The review did note sufficient evidence to conclude that all members of the rōpū were appointed because of their relevant experience; and that no reason to challenge the direct procurement method was found.
The review said a variety of changes and improvements have been made since the waste rōpū appointment process. These include enhancements of supplier conflict of interest processes and forms.
Brown noted the "significant failings" found in the report "by the Ministry for the Environment around the procurement of contracts with Nanaia Mahuta's family members".
However, he said it still doesn't answer the key question: "why three members of Mahuta's family were needed for a five-member working group."
In addition, the Department of Conservation is reviewing a $52,000 (excluding GST) contract awarded to Ka Awatea Services, for which a total of $11,800 (excluding GST) was paid out: a consideration that the contract document states was due "upon signing". The contract does not stipulate any deliverables required for the payment of this initial fee.
DoC has declined to say why, subsequent to signing, the contract was not fulfilled. A spokesperson said the review is expected to conclude at the end of October.
Further government-related work
The Criminal Cases Review Commission has confirmed that Ormsby has been working for the independent Crown entity since January 2021 as a "connector".
The commission was established in 2020 to review cases of possible miscarriage of justice. It has been asked whether Ormsby's criminal record was considered relevant in his hiring but has not yet responded. In 2003, Ormsby pleaded guilty and was convicted on one charge of assaulting a woman.
The Waikato Regional Council has also confirmed that it contracted Ka Awatea Services for consulting services, related to Covid-19, in September and October 2021. The work entailed identifying issues Māori were facing and the extra support required, the cost totalled $33,000 (excluding GST).
In April, 2021, Ka Awatea was also awarded a grant of $28,000 from a Ministry of Māori Development suicide prevention fund, in a period when Mahuta was the department's Associate Minister.
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