Three key executives employed by America's Cup Events Ltd, the company responsible for mounting the world's most fabled yachting regatta, have turned whistleblower and are assisting the Ministry of Business, Innovation and Employment with the investigation into the use of public money to run the event.
BusinessDesk has confirmed that Tom Mayo, Grant Calder, the principals of sports event management firm Mayo & Calder, and their accountant Michael Choy, have made protected disclosures to MBIE under the Protected Disclosures Act.
MBIE on Thursday afternoon announced it was suspending further payments to ACE "pending the outcome of the process" to investigate claims it had received. Some $29 million of $40m has been paid to ACE under "milestone" payments relating to the race fee for the event.
BusinessDesk had already independently established that all three were no longer at work at ACE.
"Our clients cannot make any comment," MinterEllisonRuddWatts partner Richard Wells said in an email.
Mayo & Calder were contracted to work for ACE, reporting directly to Grant Dalton, who is chief executive of both ACE and Emirates Team New Zealand, the defender of The America's Cup, which will be raced next year.
This week's suspension of funding followed earlier claims by Dalton that the team had uncovered "informants" within the organisation who had made "entirely incorrect" allegations which had forced MBIE to investigate "despite our belief that the motives of the informants were extremely suspect".
Numerous calls by BusinessDesk to a range of highly placed observers to The America's Cup process point to a serious falling out between the Mayo & Calder team and Dalton, who is legendary for his competitiveness and demands for intense loyalty, and whose pursuit of The America's Cup goes back to the early 2000s.
ETNZ is chaired by the founder of The Warehouse, Stephen Tindall, and has former Toyota NZ managing director Bob Field on its board. ACE is chaired by Tina Symmans, one of NZ's most respected communications and lobbying specialists.
The show must go on, but...
Ministers, officials and close observers of the regatta expect the current issues to be resolved and for the event to proceed.
However, questions are being raised about whether the current programme of three separate events running between December 17 this year and March 21 next year should be condensed into a shorter format.
A condensed programme is seen as improving the likelihood of full international media coverage for all three events - the America's Cup World Series, the Prada Cup challenger series and the 36th America's Cup regatta itself. They are currently running pre-Christmas, from mid-January to mid-February, and from March 6 to 21 respectively at present.
In normal circumstances, international media would routinely fly in and out of New Zealand to attend each phase of the events.
However, there are fears that fortnight-long quarantine requirements may reduce appetite for three separate stints by media, risking reduced coverage of the earlier parts of a racing series that has attracted combined Government and Auckland Council funding of more than $250m in expectation of a major boost to the country's international profile.
International coverage, particularly television broadcasting, has assumed far greater importance now the international visitor component of the regatta will be so greatly reduced.
A spokesperson for the Minister responsible for the Cup, Phil Twyford, said "any decision on shifting the event is for Emirates Team New Zealand and the Challenger of Record to make".
But BusinessDesk understands that officials are considering whether they could claim a "force majeure", citing the impact of Covid-19 on the regattas.
Total Government funding for the event runs to $136.5m, including the event fee, with Auckland Council committing $113m and having another $20m available to assist with crowd management and other public-good activities to ensure crowds watching the racing are well-managed.
Sources close to the council suggest most of that spending has already occurred, but other sources suggested there might be opportunities for the Government to make savings on an event that will inevitably attract only a fraction of the previously anticipated high-rolling international visitors who will avoid travel if Covid-19 quarantine protocols are still in place.