Former Cabinet Minister Shane Jones signed off on a $1.5 million application for Provincial Growth Fund money for a project developing Northland land, some of which is co-owned by a former staffer of his.
National Party leader Judith Collins says this raises serious questions and the application should be reviewed.
But Jones says all the right boxes were ticked and the Government says there is no evidence that due diligence wasn't followed.
Jones was one of four New Zealand First Ministers in last term's Labour/NZ First Coalition Government and, as Regional Development Minister, was in charge of the $1 billion-a-year PGF fund.
On January 28 last year, he and other ministers - including Finance Minister Grant Robertson, Economic Development Minister Phil Twyford and Trade Minister David Parker - approved an application for funding for the Ngā Whenua Kaikohe project.
The total funding was for $1.532m, the delivery of which would be conditional on certain risks being addressed. Currently only $80,000 has been paid out.
The application, from the Omapere Rangihamama Ahu Whenua Trust, was on behalf of the owners of four blocks of Māori land to develop five hectares of vineyards under the Whenua Māori allocation of the PGF.
One of the blocks of land, according to trust documents, is a two-hectare block and is owned by Kenneth and Tracy Dalton.
Tracy Dalton worked for Jones for three years in his Kaikohe office when he was a Labour MP in the 2000s. She later worked for Te Tai Tokerau MP Kelvin Davis, who is now the party's deputy leader.
Jones and Prime Minister Jacinda Ardern announced PGF funding for several projects, including Ngā Whenua Kaikohe, while in Northland on February 2 last year - five days after ministers had approved it.
Jones declared two potential conflicts of interest over that period relating to his Regional Development portfolio, but they are from April and May 2020 - months after the ministerial approval.
He may not have known about Dalton co-owning a block of land in the application; the document ministers signed off doesn't appear to list the landowners, though some sections have been redacted citing commercial sensitivity.
Jones told the Weekend Herald he couldn't recall if the conflicts of interest he declared were about Ngā Whenua Kaikohe, nor could he remember if the document he signed off included the landowners' names.
"A person who worked for me in 2005 to 2008 shouldn't be stigmatised if they've gone through a process with the bureaucracy and ticked all the boxes," Jones said.
"Those decisions have been fleshed out by the bureaucracy, and I have no interest in examining the bureaucratic bed bugs."
Collins said the fact that one of Jones' former staffers stood to benefit from his approval of PGF funding was enough to warrant a review of the application.
"This is an opportunity for Jacinda Ardern to order a review of this project and publicly release the findings so that taxpayers can see whether it was above board.
"There are serious questions that need to be answered. It definitely needs to be investigated."
Regional Development Minister Stuart Nash appeared lukewarm on reviewing it.
"The minister is not aware of any evidence that any PGF project did not go through rigorous due diligence or project benefit analysis," a spokesperson for Nash said.
Collins also raised questions about Ben Dalton, who hails from the same hapū as Tracy Dalton, and who is chief operating officer for the Provincial Development Unit (PDU).
Before ministerial approval, ministers were given advice by the PGF's independent advisory panel, which met to discuss the application on December 12, 2019. Notes from the meeting show that the project had the support of the PDU.
Four days later, Ben Dalton declared a potential conflict of interest relating to the project.
"Mr Dalton noted that he is a member of the same hapu as the applicants, although none are siblings, parents' siblings or first cousins," said Robert Pigou, head of Kānoa - Regional Economic Development & Investment Unit.
"Consequently Mr Dalton recused himself from all decision-making processes related to the application."
Asked why a potential conflict of interest wasn't declared before the December 12 meeting, MBIE said Dalton wasn't involved in assessing the application.
Dalton would have been involved as part of the PDU senior leadership team meeting on December 16 - which was when he made the declaration and recused himself.
Any issues around PGF conflicts of interest involving MBIE employees were for MBIE to manage, the spokesperson for Nash said.
"MBIE has robust processes in place to manage conflicts if and when they arise."
MBIE confirmed that $80,000 so far has been provided for a detailed project plan. No funding has been provided yet for the next stage of the project. Five jobs in total have been created so far.
The trust did not respond to a request for comment.
This is not Jones' first brush with conflicts of interest allegations around the PGF.
Around the same time as ministerial approval was given for the Ngā Whenua Kaikohe application, Jones was fending off criticism for a perceived conflict of interest to do with NZ Future Forest Products (NZFFP).
Brian Henry - close friend and lawyer to New Zealand First leader Winston Peters - and his son David Henry are involved in the company.
Jones denied having any prior knowledge of the NZFFP's application despite meeting with each of the Henrys on different occasions before it was lodged.
"Was I ever in a position to influence the outcome of this particular application? No," Jones said at the time.
"Was any public money received by them? No."