Rescue helicopter probe centres on pub billboards

By TONY WALL

The Serious Fraud Office investigation of the Auckland Rescue Helicopter Trust is focusing on payments totalling millions of dollars for advertising billboards on four pubs.

The Herald has learned that the payments were for helicopter and Child Flight advertising billboards and signs placed on four Auckland pubs co-owned by a member of the trust.

The pubs are the Strand, Birdcage and Palace Taverns and the Cazino Bar.

They are linked to the helicopter trust through poker machine money from a hotel-based charity called Goldtimes Foundation.

The SFO raided the helicopter base in Mechanics Bay and staff members' homes in February. A spokeswoman said yesterday that the investigation was continuing.

Trust chairman Malcolm Beattie yesterday said there were no hidden transactions and no missing money. All money had been accounted for and repeated audits had cleared the operation.

He was confident the SFO probe and an independent audit commissioned by the trust, to be carried out by Deloitte Touche Tohmatsu, would clear all individuals of any wrongdoing.

The Herald spoke this week to a source who saw the trust's accounts and raised concerns with senior management about the amount of money being spent on the advertising with the four pubs, co-owned by long-serving helicopter trust member Wayne Porter.

The source alleges that poker machine money would arrive each week from Goldtimes, and each month a cheque for half the amount of the grants would be sent back to the source pub for advertising.

The source saw a financial report for 2000 which showed Child Flight and the helicopter trust had spent hundreds of thousands of dollars on advertising. A manager asked why this was so when she had been given no advertising budget.

Mr Beattie said the average annual expenditure on the 12 billboards and signs over the past three or four years was $700,000.

He showed the Herald a report stating that was about $44,000 below market rates.

When asked for copies of the monthly budgets and accounts detailing the advertising expenditure over the past four years, Mr Beattie said he could not make them available until next week.

This week, Peter Pharo, a co-owner of three of the pubs and also a Goldtimes trustee, said the pubs had been charging the trust "30 to 40 per cent below the commercial rate" for the billboards, but he did not know the total cost.

The trust's financial controller, Tom Romley - also the secretary of Goldtimes - wrote an email to general manager Scotty Watson in December after Internal Affairs investigators requested the trust's cheque butts, receipts and financial transaction lists.

He wrote: "As an ex-auditor you will realise the implications of the information now requested.

"No problem supplying the cheque butts but a cursory examination is going to show monthly cheques paid to various recognisable names like Tavern Casino Ltd, Cazino Bar, The Palace Casino Ltd, Strand League Promotions (Birdcage Tavern) and Goldies Casino & Sports Bar."

Mr Romley wrote that the financial transaction lists showed "every transaction that has gone through our accounts including the advertising payments".

"They are accounted separately from the revenue as advertising costs but obviously are a substantial figure. Malcolm [Beattie], Wayne [Porter] and I have now put in place a system to regularise these payments as fixed monthly amounts."

Mr Romley summarised: "The audit following this track will very quickly lead to the advertising."

Under the heading "Plan", he wrote: "We need to contest their [the department's] right to our financial information or all of it anyway. They should be restricted to viewing information that is pertinent to their audit."

He wrote that there was no problem with providing receipt of gaming machine grants and consequent purchases, but "they are not I believe entitled to complete access to all financial information relating to the trusts". Mr Romley and Mr Watson yesterday referred all comment to Mr Beattie.

Mr Beattie said he had only recently seen the email. The SFO had all the trust's receipts and accounts.

"There has been no money hidden, that is the key issue - there is no money missing ... It's all traceable."

He said the billboards were vital for the helicopter to keep a high public profile as competition for the charity dollar was fierce.

The helicopter trust raises about $17 million a year from donations and sponsorship which goes to the maintenance and operation of the helicopter and the Child Flight service, a fixed-wing aircraft that ferries children to hospital.

About $3.8 million comes from gaming machines, and $2 million of that from Goldtimes. The helicopter has done more than 10,000 rescues since the service was established in 1970.

While the advertising issue is a focus of the SFO probe, the Department of Internal Affairs has raised concerns about the roles of Mr Porter and Mr Pharo as trustees of Goldtimes.

The foundation pays a fee to pubs co-owned by the pair for poker machine site rental.

"We see a conflict of interest between trustees making decisions about purchasing machines and site rental and that kind of thing and then being the beneficiary of the site rental at the other end," said the department's manager of gaming licensing, Lois Markland.

The department was still considering the foundation's application for renewal of its gaming licence. She had a letter from Mr Porter and Mr Pharo saying they were happy to stand down as trustees.

Asked about the billboard issue, Mr Pharo said the advertising arrangement was strictly monitored and had been cleared by repeated audits.

Mr Porter, who has been involved with the rescue helicopter service for 30 years, said the billboards were a successful marketing tool.

He would not say how much he charged the trust for the space because it was commercially sensitive.

Mr Porter said the helicopter rescue service was an "icon" of Auckland. "Some person who has left has decided to try and destroy it - it's a very sad point we've got to but we just have to work our way through it."

The trust has launched a hunt for the person who made the allegations to Internal Affairs and later rang media organisations.

It has hired a private investigator, at what Mr Beattie calls "mate's rates", who claims to have a recording of the whistleblower.