The Serious Fraud Office won't pursue criminal charges against Nigel Murray because most witnesses in the case are in Canada. Photo / Christine Cornege
The Serious Fraud Office won't pursue criminal charges against Nigel Murray because most witnesses in the case are in Canada. Photo / Christine Cornege
Criminal charges against Dr Nigel Murray for his use of taxpayer money while in charge of a district health board were abandoned by the Serious Fraud Office because of the cost involved in interviewing witnesses in Canada.
In July, after a 19-month investigation, the Serious Fraud Office announced it wouldnot pursue a case against the former Waikato DHB chief executive and closed its investigation, raising the ire of those who complained about his spending.
During his time in the $560,000 a year job Murray spent $218,000 on travel and accommodation to the United States, Canada, Australia and in New Zealand. In one year he spent a total of six months out of the office travelling.
A State Services Commission investigation found $120,000 of the spending was either unauthorised or unjustified. Murray paid back $74,000.
The case was referred to the SFO in November 2017 and last month director Julie Read said proving criminal charges would have required extensive investigation in Canada and the public interest did not warrant that cost.
In a letter to the Herald on Sunday, written under the Official Information Act, SFO general counsel Paul O'Neill said the matter was "unusual" in that almost all of the relevant witnesses in the case were in Canada.
The SFO did not have the ability to compel witnesses outside New Zealand to participate in an interview or come back to New Zealand to give evidence at trial, he said.
"We would therefore have been relying on the voluntary co-operation of witnesses in Canada."
State Services Commissioner Peter Hughes said Nigel Murray's behaviour was an affront to the taxpayers of New Zealand. Photo / Mark Mitchell
It's unclear if the SFO would have to compel Murray himself, who was fired from his job at a Canadian health authority before returning to New Zealand in mid-2014.
"In determining whether to proceed with an investigation or prosecution, the SFO must always decide whether it is in the public interest to spend public money in doing so," O'Neill said.
"In this case, it found that it was not."
O'Neill said without incurring the time and cost of travelling to interview the witnesses and paying to have them present for a trial, the SFO could not have satisfied the evidence required to bring the criminal proceeding.
"Within this context, the investigation into Dr Murray was not closed because of a lack of funds on the part of the SFO," he said.
"Rather, it was not considered appropriate or proportionate to expend the significant amounts of public money required to provide even a reasonable prospect of a criminal conviction in respect of the spending of Dr Murray."
He said that once the case became a Crown prosecution, which would have followed if a not guilty plea had been entered, the cost of the SFO's counsel came out of Crown Law funding, not the SFO budget.
"Witness and court costs for any trial would lie with the Ministry of Justice, but all other costs would remain with the SFO."
He added proving criminal charges against Murray required a different standard than applied in the State Services Commission inquiry.
"Establishing criminal theft is very different from showing that expense claims were improper."
Sue Moroney says the Serious Fraud Office's explanation for dropping the pursuit of criminal charges against Nigel Murray is "flimsy". Photo / Andrew Warner
Murray's lawyer did not respond to Herald inquiries following the SFO announcement it would not pursue the case, or again yesterday.
Former Labour MP Sue Moroney, who laid a complaint against Murray to the SFO, said the explanation did not stack up.
Interpol and other international agencies were available to help in cases where witnesses lived overseas, Moroney said, and she pointed to the case of Ministry of Transport fraudster Joanne Harrison who fled the country and was returned by police to face charges.
In addition, witnesses could be interviewed and give testimony at court through video and didn't need to be in New Zealand, Moroney pointed out.
Canadian police could also help locate people and much could be done by phone and email, she said.
"It's just not good enough. If we've got a Serious Fraud Office that actually can't bring people to justice because they lack the ability to investigate overseas then I just think that's open slather for the misappropriation of public money."
The role of the SFO was important in addressing complex fraud, Moroney said.
"I really do think it needs a close look at, if they haven't been able to do this why not? And how can they protect the public interest properly if they are effectively saying that if a fraud occurs offshore they won't follow it up.
"That's the message that it's sending and I don't think that's acceptable from the public point of view."
Former Waikato DHB board member Dave Macpherson and senior doctors' union boss Ian Powell also questioned the decision in July.
It's unclear exactly how much the SFO spent on its 19 month investigation but 719 hours were logged by operational staff. This did not include work done by salaried staff.
There were also external fees totalling $6485 spent on external legal counsel, transcription services, document management and road travel.
Waikato DHB previously said it would not comment on the outcome and did not answer questions yesterday about whether it would seek the other $46,000 of the "unjustified" expenditure.
