Housing New Zealand paid an investment banker $1.6 million to help it sell state houses, official documents show.
Low-profile Auckland banker Andrew Body gave advice to the Minister of Housing and secured lucrative contracts to implement the policy while also advising potential buyers of state housing stock - a dual role attacked by the Labour Party as a conflict of interest.
Housing New Zealand (HNZ) and Mr Body say correct procedures were followed, and conflicts were declared where required.
Mr Body was appointed in 2010 by then-Minister of Housing Phil Heatley to the housing shareholders advisory group, then later to an advisory panel to help form government policy on social housing.
Part-way through these appointments, at the end of 2011, HNZ contracted his company, Andrew Body Ltd (ABL), to conduct work in the "asset transfer workstream".
Its job was to "provide advice in regard to scoping the transfer of social housing stock from HNZ" to non-government and private sector parties.
ABL produced two reports for HNZ, including one in February 2012 titled "Viability of social housing provision and the role of stock transfers in New Zealand".
According to answers HNZ gave in reports to Parliament's social services committee, ABL received $431,905 for "specialist social housing advice" and $1,174,138 for "professional services" during the 2012 and 2013 financial years.
Housing New Zealand said this week ABL was paid another $71,272 in the 2014 financial year.
The amount paid during the 2013 financial year made ABL the sixth-highest earning consultant or contractor engaged by HNZ during the period. Only large consulting companies such as Oracle and Deloitte were ahead of it.
A HNZ representative declined to disclose ABL's hourly rate "to avoid prejudicing the commercial position of that supplier" and said the work was untendered as this was not required when work needed specialist skills or was on tight timeframes.
Labour's housing spokesman Phil Twyford, whose party made the initial Official Information Act requests, described the consulting deal, particularly the amount paid, as "distasteful".
"Housing NZ, whose job it is to provide decent housing for some of the poorest people in New Zealand, is throwing millions of dollars at highly paid consultants to tell it how to sell off state houses," he said.
The selling of state houses to "social housing providers" has become flagship government policy, and publicly owned real estate worth up to $5 billion has been tagged for possible sale over the next two years.
Questions asked of Social Housing Minister Paula Bennett about Mr Body's advice and ABL's consulting were forwarded to Finance Minister Bill English.
He issued a one-line statement distancing himself from the matter. "Questions about Housing New Zealand contracts are matters for Housing New Zealand," the statement from Mr English's press secretary said.
The HNZ representative defended the work done.
"Andrew Body Ltd - and the staff the company employs - was uniquely placed with its skillset, experience and knowledge of Housing New Zealand to undertake the work required."
According to the Companies Office, Mr Body is the sole director and shareholder of ABL.
The company does not list employees other than Mr Body on its website, and no individuals have listed work for ABL on professional networking site LinkedIn.
Asked for comment, Mr Body was unwilling to discuss his work for clients, but said his company was a "specialist property and infrastructure corporate finance and asset adviser" that had been operating for more than a decade.
Mr Body declined to give details about the work he did or who did it.
"I don't comment on work that we do for our clients," he said. "But when I talk about 'we' I mean it."
Twyford wants probe into 'clear conflicts of interest'
Phil Twyford has called for a state housing investigation.
The Labour Party's Phil Twyford is calling for an investigation into the Government's handling of Housing New Zealand consultants, claiming "clear conflicts of interest" where they simultaneously formulated the policy to sell state houses, as well as advising potential buyers.
According to documents released under the Official Information Act, investment banker Andrew Body had declared in June 2011 when appointed to a ministerial advisory panel that his company Andrew Body Ltd was an adviser to the United Kingdom-based investment fund John Laing that "may seek to become involved in the provision of social housing".
John Laing is also part of the SecureFuture consortium that built and operate the new privately-run prison at Wiri.
This declaration was not made to Housing New Zealand, even though at the same time ABL was earning more than $1 million under a contract to scope state house sales.
A spokesperson for HNZ said Body and ABL were not required to disclose the interest.
"The work Andrew Body Ltd carried out for Housing New Zealand was separate to [the work on the advisory panel] and therefore no conflict of interest was required to be declared," the spokesperson said.
Body was unwilling to discuss his work, citing commercial sensitivity, but said he followed all guidelines and had done nothing wrong.
Twyford said the HNZ response was "pure spin" and the interest should have been required to be declared and should have disqualified Body from the contract.
After his work with Housing New Zealand ended in late 2012, Body is understood to have advised other organisations considering buying social housing stock from the Government, and his company ABL had advised Treasury on the partial sale of state-owned power companies.
Twyford said the role of consultants in the state house sell-off, including probing declared conflicts of interest, should be investigated.
"The Office of the Auditor-General should look into this," he said.