Former chair of the NZ Film Commission Kerry Prendergast told the Herald a confidentiality agreement prevents her from answering questions about costs during her tenure. Photo / Stephen A'Court
Former chair of the NZ Film Commission Kerry Prendergast told the Herald a confidentiality agreement prevents her from answering questions about costs during her tenure. Photo / Stephen A'Court
Kate MacNamara is a South Island-based journalist with a focus on policy, public spending and investigations. She spent a decade at the Canadian Broadcasting Corporation before moving to New Zealand. She joined the Herald in 2020.
The Public Purse is a fortnightly Herald opinion column focusedon the public sector and how taxpayer money is spent.
The New Zealand Film Commission’s flop productions – fiscal 21/22 and fiscal 22/23 – have left Kiwi audiences without a single character to cheer for.
The cast – notably the political appointees of the agency’s board – lurch from bumbling to backpedalling, as they spend the public’s money in a scramble for self-preservation.
But viewers should remember such stories come to light through the quiet courage of those off-screen, among the ranks of officials, and others who make their living around the sprawling machine of Government.
The opening scene is mid-2021 and the hiring of chief executive David Strong amid a glaring and declared conflict of interest, in the form of his (and his wife’s) ongoing ownership stake in a TV drama project called The Pilgrim, fronted by production company Great Southern TV.
Strong was hired to head the Film Commission (NZFC), which is first and foremost a funding agency. Its main job is to dole out, to the film industry, public money: Crown funds and grants from the Lottery Grants Board (a unit of the Department of Internal Affairs).
It’s worth knowing that just about all independent, commercial screen productions made in New Zealand receive public money from the NZFC and/or from its sister funding agencies.
In 2021 and 2022 the single largest pot of money the commission administered was the $50 million Premium Fund, contestable and open to both film and television projects.
The long tentacles of conflict and likely conflict, connecting The Pilgrim, the pursuits of Great Southern, and David Strong as head of the NZFC, were easily visible when he was hired.
The commission is an autonomous Crown entity and governed by a board, its members are appointed by Government ministers. In 2021, former Wellington mayor Dame Kerry Prendergast chaired the NZFC board, and with advice from MinterEllisonRuddWatts partner and fellow board member John McCay, the board concluded that Strong’s conflicts were manageable.
Prendergast was not reappointed as commission chairwoman and left the post in September 2022. She declined to answer Herald questions on the matter, saying she was bound by a confidentiality agreement between Strong and the NZFC. (In other words, she is bound by a silencing contract that she, as chairwoman, agreed to.)
The Strong situation was uneasy at the outset, but it took a very serious wobble before Christmas 2021. By early December, Strong was already meeting with other related public agency chief executives to decide on applications for the Premium Fund.
The three-person panel – Strong, and the chief executives of the funding agency NZ On Air, Cameron Harland, and of Te Māngai Pāho, Larry Parr – approved funding for projects including two Great Southern projects (not The Pilgrim).
Strong’s business partnership, through The Pilgrim project, with Great Southern was declared, and the other chief executives agreed he did not need to recuse himself from decision-making on the company’s other projects. The NZFC board, ostensibly managing Strong’s conflicts, was not informed.
The details are contained in an independent review of the Strong conflicts of interest management produced the following year (its terms of reference expressly excluded considering “‘other agencies’ management of conflicts of interest”). But we’re getting ahead of ourselves.
By February, Strong had called at least one meeting to prepare NZFC senior staff and contractors to help manage his conflicts through a forthcoming application by Great Southern to the Premium Fund for money for The Pilgrim.
Though this detail is not contained in the summary of the official review of the matter, produced later, the Herald understands some parties baulked, believing it was untenable that the head of a public funding agency should seek money for his own project from his own agency. Conversations were had with board members. (Ultimately, no application for The Pilgrim was made to the Premium Fund.)
The board turned, once again, to MinterEllision, this time for updated legal advice. The new advice came from MinterEllision partner Briony Davis; it cost $6720, including GST.
The Herald asked McCay (who left the board in the past year) if he thought his law firm could provide clear-eyed advice to the NZFC at that juncture, given McCay was a board member and had taken a key role in the management of Strong’s conflicts, including the provision of advice at his hiring. McCay declined to comment -- so far as the Herald’s questions related to his time on the NZFC board, he said the agency’s policy, when he served as a member, was that individual board members (past or present) did not comment on agency matters; he directed questions to the NZFC.
David Strong left the post of CEO at the New Zealand Film Commission in 2022 with severance of $438,700, which eclipsed his annual salary. Photo / supplied
In March, Prendergast briefly apprised the screen producer’s guild, Spada, of the Strong conflict and noted that it was being “appropriately managed”.
The guild dispatched back a list of “grave concerns” in the form of a lawyer’s letter, and threatened to call in the Auditor General.
The letter alleged many conflicts, including that Strong was presiding over funding decisions for projects that were elsewhere directly competing with The Pilgrim for funding.
The letter didn’t mince words: “Spada considers the fact that Mr Strong’s conflict of interest was ever considered to be manageable constitutes a major governance failure”.
The NZFC board finally blinked, and NZFC old hand Mladen Ivancic was deployed to take over chief executive duties, an arrangement that began in late March, and was formalised in April.
Along the same timeline, Strong was put on gardening leave, where he remained until August 5, when he stepped down. In the interim, he continued to collect his full salary, roughly $100,000 for the four-month period.
Strong’s August departure was facilitated by an extraordinary $438,700 severance payout – which eclipsed his $310,000 to $320,000 annual salary. It was negotiated with the board and its lawyers, as yet unknown. (The commission has not yet responded to the Herald’s request to identify the law firm and its fee, and neither has it yet confirmed what law firm drew up Strong’s 2021 employment contract.)
The spending, however, wasn’t over. The commission paid $70,000 for an independent review of the conflict of interest matters by Wendy Venter of Venter Consulting, only the executive summary of the report has been released (the total includes peer review work done by lawyer Robert Buchanan). A further $50,000 was spent on “conflict of interest management” by Venter.
The events, it appears to me, cast Prendergast as chair, and the board generally, in a decidedly dim light. Belatedly recognising the terrible optics, the board spent some $30,000 on Blackland Public Relations and help from its director, Nick Gowland (”corporate reputation specialist”), to manage the fallout.
Contacted by the Herald, Strong emphasised that his interest in The Pilgrim was “fully declared” before he was hired by the commission. He said the matter was “properly managed with the board” and that when “issues arose” he and the board “worked through them”.
“I moved aside as CEO when it became apparent that my continuing, growing private commitments were no longer compatible with the role,” he wrote in a statement.
He declined to explain why such a seemingly simple evolution of circumstances should cost $700,000 in public money to remedy.
The Film Commission has a new chairman in Alistair Carruthers, but five current board members – Paula Jalfon, Pania Gray, Ant Timpson, Sandra Kailahi, and David Wright – remain from the Strong era.
The terms of reference for the review show Venter was not asked if the Strong conflicts were unmanageable. But the NZFC’s updated conflict policy for hiring staff quietly suggests they were.
The policy now reads: “when recruiting, the right person for the job will be selected. However, if a candidate declares a conflict of interest that will significantly impact their ability to do the job, this will be taken into consideration”.
It was an expensive and circuitous route to some clarity of thought.
