"They were very upset. These [crashes] are awful to go to," Oliver said.
"The passenger saw the woman before the driver did, and tried to yell for her to stop."
Police said they interviewed Graham, but a decision to lay charges has not been made. The Serious Crash Unit was investigating.
The elderly woman's name had not been released last night as family were yet to be informed.
Liz Graham is a teacher at Te Aute College. She also is chairwoman of the local sports club and is actively involved with committee at the Hawke's Bay Regional Council.
She was also involved with Treaty negotiations in the area. Her late son Stacy Edward Graham, 34, was killed when his car collided with a power-pole nearby on State Highway Two.
He was not being officially pursued by police - but a patrol car was following him with lights flashing.
He was described after his death as a "pretty awesome guy".
A colleague told the Hawkes Bay Today: "You'll find the whole region, Otane, Waipawa, the whole lot, all really liked this young man."
Meanwhile, in Taranaki, one person was killed when a car crashed into a powerpole on Mountain Rd, Stafford at 9.20pm.
Two passengers were trapped - one inside and one under the car. A fourth person was also taken to Taranki Base Hospital.
Police said the group were all aged in their 20s.
