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Environment Ministry boss Hugh Logan will be docked around 15 per cent of his salary as a consequence of his mishandling of the Madeleine Setchell affair.
State Services Commissioner Mark Prebble announced Mr Logan's penalty today, and at the same time said his own performance was sub-standard and had penalised himself 2.5 per cent of his $400,000-plus salary.
Mr Prebble also invited ministers to dismiss him if they felt his performance had been inadequate.
The affair ultimately led to the resignation of then Enivronment Minister David Benson-Pope. He was cleared by two reports into the ministry's brief employment of Ms Setchell released today.
They revealed Ms Setchell - whose partner is National Party chief secretary Kevin Taylor - had received a compensation payment after her departure from the ministry.
The confidential settlement was "not unreasonable" said one of the reports, from former State Services Commissioner Don Hunn. But Dr Prebble criticised the decision to keep the amount paid secret and added: "One of the real consequences of this poorly managed process was the expenditure of taxpayers' money".
Mr Logan told a press conference that he accepted the report.
He said he was sorry for what had happened and apologised to Ms Setchell. "I should have handled it better," he said.
Mr Hunn's report said both the ministry and the State Services Commisison had made "significant errors" in their dealings with Ms Setchell.
He said she had been open about the potential conflict of interest posed by her relationship with Mr Taylor, and that the issue had not been dealt with adequately by the ministry of Mr Logan.
The issue eventually made its way to the office of Mr Benson-Pope. Dr Prebble's report said it was understandable Mr Logan had spoken with Mr Benson-Pope about Ms Setchell and said the minister's responses were well within the norm of ministerial reaction.
Mr Logan had testified that he had reached his own views regarding the Setchell situation. Dr Prebble said he believed him.
"There has been widespread speculation suggesting that Mr Logan may have improperly sought to meet the minister's political priorities while making employment decisions," Mr Prebble said.
"There is no evidence of such behaviour, there is nothing in Mr Hunn's report that suggest that Mr Logan was in any way improperly influenced in his behaviours."
Dr Prebble said Ms Setchell had lost her job through no fault of her own. He said Mr Logan was not effective enough in involving Ms Setchell in a fair process arriving at an agreeable solution.
Dr Prebble said: "Accordingly I have decided there will be a monetary consequence for Mr Logan through the operation of the annual performance management system," Dr Prebble said in his report.
Dr Hunn's report noted differing accounts of how events unfolded and many lapses of memory by some of the significant players.
Mr Benson-Pope resigned as a minister after Prime Minister Helen Clark said he had misled the public over his involvement in the sacking.
One account said Mr Benson-Pope had "gone ballistic" when he heard of Ms Setchell's appointment.
Another version recalled Mr Benson-Pope expressing himself in just a robust manner, which was not unusual for him.
When the matter became public several months ago, Mr Logan came under fire for failing to pass on to deputy state services commissioner Iain Rennie that Mr Benson-Pope had told him he could not be as free and frank if Ms Setchell was the ministry's communications manager.
That meant an initial report Mr Rennie prepared for the then state services minister Annette King was incomplete.
Before Mr Benson-Pope quit, Dr Prebble wrote an article in which he stated that the minister had not been involved in the process behind her sacking.
It was also later revealed Dr Prebble was also told by Mr Logan that he did not want Ms Setchell in his office, a fact which Dr Prebble said he did not recall when writing the article.
The report said it was not unusual for state service commissioners to be put under a large amount of pressure, and to not recall some of the conversations they had had.
Both National and some unions heavily criticised the Government and senior public servants for the Setchell affair saying it would lead to the politicising of the public service.
Dr Hunn was called in to look at events because Dr Prebble was in effect inquiring into his own conduct.
The report has taken more than 14 weeks to complete after Dr Prebble had originally said it would take six weeks.
The report could have more ramifications for Mr Benson-Pope who is again seeking the Labour nomination for Dunedin South in the face of fierce opposition.
- with NZPA
