Carter summons Housing NZ chairman to explain

Helen Fulcher

The chief executive of Housing New Zealand Corporation, Helen Fulcher, may have approved a hush deal to a former contractor who has made allegations of accounting irregularities involving $2.1 million.

The senior manager who wrote the letter setting out the deal, Gerard Coles, has been stood down on full pay following publicity over the arrangement and Housing Minister Chris Carter has summoned corporation chairman Pat Snedden to Parliament this morning for a "please explain" meeting about the allegations.

But the fall-out could extend further if higher levels of management were found to have approved the deal.

The contractor left in August last year and in a December settlement, he was paid $3000 on condition he did not communicate with any minister, MP or journalist.

The deal also required him to keep his concerns confidential from any other Housing NZ employees and said that if he was required to help in the internal investigation into the issues, he would do this in his lunch breaks.

Among the more serious of the contractor's claims is that $2.1 million of overspending was hidden in the accounts and reintroduced in a later period when additional funds were available to balance the books.

Mr Carter said last night that his ministerial and electorate staff were looking into a suggestion by Housing New Zealand that the contractor had attempted to contact him through a secretary but he had no memory of that and they were searching records.

He also believed the complainant was a constituent of his and from the Indian community "but I can't recall him and if I have met him at cultural events he hasn't raised these issues with me".

Mr Carter said that at this morning's meeting he would want to know who else signed the letter, whether the chief executive knew about it, what the board knew about it at the time and what it is doing about the allegations.

The letter from Mr Coles, the general manager of assurance services, to the former contractor obtained by the Herald on Sunday, was signed on December 14 last year and says "the suggested settlement with you is as follows (subject to the Chief Executive approval) ..."

Next to the bracketed phrase about needing the approval is a handwritten note saying ("now given") and an illegible signature.

The settlement said that matters of concern outlined by the contractor in an email of November 25 would be the subject of a review and that the contractor would be paid $3000.

Further emails obtained by the Herald on Sunday between Mr Coles and the complainant written before the final settlement indicate that Mr Coles was keeping the chief executive well briefed on negotiations.

"Helen Fulcher is reviewing the letter you and I have agreed," an email from Mr Coles says. "I met with her yesterday and discussed key points with her and don't expect any difficulty in getting the green light to just get on with it."

Mr Snedden would not say last night whether Helen Fulcher had approved the settlement, which he had found out about in the past week.

Act leader Rodney Hide yesterday called for forensic auditing specialists to be brought in and said Helen Fulcher should be stood down as well.