Government waving $20m stick, says wananga

Accused: Te Wananga o Aotearoa

The troubled tertiary institute Te Wananga o Aotearoa believes the Government is using financial pressure to force its head to resign.

The wananga held a crisis meeting last night, and is investigating taking legal action against the Government, which in turn told the Herald yesterday it plans to appoint a Crown observer to the wananga council.

Chief executive Rongo Wetere is understood to have told wananga kaumatua this week that the Government was withholding $20 million he believed the wananga was entitled to as a result of a 2001 Treaty settlement.

He told them he believed the Government was doing this to force his resignation, and said he would resist.

Some sources suggested council members might seek a compromise to defuse the tension last night, encouraging Mr Wetere to stand aside on full pay until allegations were resolved.

But no one would speak publicly to the Herald before the meeting, and Dr Wetere could not be reached. Mai Chen, a partner for public law specialist firm Chen Palmer and Partners, said the wananga had instructed her to advise it on whether the settlement reached with the Crown was being honoured.

One source said the wananga would have serious financial difficulties starting a new academic year without the money, but others have said its bank balance is healthy.

A wananga spokeswoman last night refused to comment on the financial issue, which is understood to involve access to a suspensory loan.

But she said a meeting was taking place to discuss a letter sent by Education Minister Trevor Mallard seeking to appoint a Crown observer to the council.

This was one of several options Prime Minister Helen Clark said this week the Government was investigating.

Mr Mallard said last night he had written to tell the chairman of the wananga council his intention and seeking a response by Friday.

Parliament resumes on Monday after a week's recess, and the Government wants to ensure it is seen to have taken further action as it awaits the results of the Auditor-General's investigation into the wananga.

Two other polytechnics have Crown observers appointed to their councils.

Such a move is not the highest level of intervention the Government could have sought.

But a source said the wananga feared it was just the first step.

Mr Mallard last night said that under a $40 million deed of settlement signed in 2001 "there is a suspensory loan facility and the wananga, under the deed, has to meet certain conditions to access this facility".

The loan is understood to be worth $20 million which would convert into a permanent grant if conditions were met.

Mr Mallard denied there was any connection between the fact the loan had not been approved and Dr Wetere's position.

The Cabinet had not received a report for approval and officials were "working through the process".

"This issue has nothing to do with Dr Wetere's position. His employment is a matter for the wananga's council, not ministers."

The Government signed the agreement with the wananga after a Waitangi Tribunal report on capital works financing.

The payment was spread over three years, with a suspensory loan facility for three years after 2003.

Then the Government said the settlement depended on "outcomes in student growth, student retention and infrastructure development that have been agreed in the negotiations between Te Wananga O Aotearoa and the Crown".

Allegations of financial extravagance and misuse of taxpayers' money have been made against the wananga.

Act MP Ken Shirley made accusations in Parliament last week of rorts and conflicts of interest at the wananga, New Zealand's largest tertiary institute.

Dr Wetere has denied any wrongdoing and has challenged Mr Shirley to repeat his allegations outside Parliament.

Disputed funds

* The Government and wananga signed a $40 million deal in 2001 for money owed.

* An additional $20 million in establishment funding is now in dispute.