SFO called in to investigate Tamihere aide

By AUDREY YOUNG

The Serious Fraud Office will be asked to look at dealings allegedly approved by John Tamihere's former financial manager at the Waipareira Trust, Mike Tolich, after a secret forensic investigation of its affairs, it was reported last night.

The findings of an investigation by Paragon Risk will be handed to the office today after it concluded that there was a problem of "a serious nature", 3 News reported.

Mr Tolich, who is Mr Tamihere's electorate chairman, said he would defend any allegations.

The Paragon investigation was a closely guarded secret around the trust and was separate from the audit conducted by Deloitte.

Mr Tamihere has stood down from the Cabinet while issues raised by the Deloitte audit are investigated by Wellington Queen's Counsel Douglas White.

Acting Prime Minister Michael Cullen urged that all allegations be put into the public arena so they could be dealt with by the inquiry.

The Government had been expecting at least one more allegation about the Waipareira Trust and the TV3 story about Mr Tolich last night is thought to have been it.

Paragon's investigation centred on the payment by the trust on six invoices totalling $95,000 to five organisations in June 1999 - when Mr Tamihere was in his last month as chief executive officer.

The cheques were not made out to those organisations but to cash. All were cashed at a BNZ branch near the trust's base in West Auckland.

Paragon found all the cheques had been authorised by Mr Tolich, 3 News said. The report had not found out who had cashed the cheques.

None of the companies had been at the addresses listed on the invoices, none had GST numbers and none were limited-liability firms.

The invoices of the different companies had been typed in the same font and type and some had similar spelling errors.

Mr Tolich said in a statement yesterday that he would "vigorously defend any allegations" and advised them to be taken to the appropriate agency.

He said the trust's chief executive officer, Reg Ratahi, telephoned him yesterday and told him, "You are going to jail".

Mr Tolich said he was a chartered accountant and was the trust's chief financial officer from 1989 to 2000.

He said that people making allegations against him should "stop colluding" with Act leader Rodney Hide - who had early access to some of the Deloitte's audit findings.

Paragon managing director Ron McQuilter would not comment last night on the inquiry, nor would Mr Tamihere.

Mr Ratahi could not be contacted about the Paragon report but earlier had said Mr Tolich's statement was "rubbish".

The Government is bracing itself for an attack by Act in the House today but is thought to be planning a counter-attack on Mr Hide.

"There are a lot of glass houses around this issue at the present time," Dr Cullen said at the post-Cabinet press conference.

He also accused Mr Hide of being "an agent" for TV3 and said that he had twice challenged the Act leader in Parliament to deny that he had received outside payments while being an MP. "He has failed to respond in both cases. I will deal with that further in the House."

Dr Cullen would not comment on Mr Tamihere's prospects of getting his Cabinet post back.

He said the Government wanted all the facts out as quickly as possibly to come to a considered judgment, "then we'll see what happens after that".

But he pleaded for people not to rush to judgment.

"We don't live in an Alice in Wonderland world in NZ. The sequence is not sentence, verdict, evidence but the other way around, evidence, verdict and, if appropriate, sentence thereafter."

The Queen's Counsel's inquiry will look at the $195,000 payments made to Mr Tamihere after his departure from the trust, its tax status, election expenses and any other payments of interest.

The terms of reference given to Mr White are so broad that he could look at virtually anything he considers is pertinent.

Dr Cullen said on Newstalk ZB yesterday that Mr Tamihere had told him he had not paid tax on the exit payment. "He had good reason to believe the tax had been paid by the employer, which of course would normally be the case."

Dr Cullen also suggested that it might not have been declared to Inland Revenue for the same reason.

Inquiry's terms of reference

* Investigate and determine the full circumstances surrounding the payments made by the trust, including their timing, nature, tax characteristics and to whom they were made.

* Identify whether appropriate tax was paid on the payments, and if so, by whom that tax was paid.

* Examine any other payments that may have been made by the Waipareira Trust to John Tamihere at or after the end of his employment in 1999.

* Establish what Mr Tamihere believed to be the tax status of the payments and what the basis for his belief was.

* Examine the return of election expenses made by or on behalf of Mr Tamihere and determine whether it was in conformity with the requirements of the Electoral Act.

* Investigate any matter referred by the Prime Minister with respect to the relationship between Mr Tamihere and the trust or any organisation to which the trust is or was connected.