Auditor-General keeps check on scrutiny of mayor's possible use of council resources during two-year affair.

Auditor-General Lyn Provost is keeping a watching brief on Auckland Council chief executive Doug McKay's review of Mayor Len Brown's possible use of council resources during his two-year affair with Bevan Chuang.

Impeccable sources have confirmed to me that Provost has been in frequent close contact with McKay since he appointed top accounting firm Ernst & Young to undertake the review on his behalf.

It has clearly been a testing brief for McKay to effectively investigate his own boss. Insiders have correctly described the process as involving a good deal of "negotiation" between the mayor's office and McKay's executive suite to gain access to the information necessary for Ernst & Young to do a credible job.

McKay has been receiving advice from Crown Solicitor Simon Moore, whose warrant covers the greater Auckland area. Brown has his own legal adviser.


For two men who have worked closely together during Brown's first term as Mayor of Auckland to bring the new governance structure for New Zealand's largest city into operation, this has clearly posed enormous personal strains.

Difficult also for Provost, whose team reported in December 2012 - in largely positive fashion - on how the transition to the new Super City had been carried out. Although some tensions were identified by the Auditor-General, they were largely seen as part of the bedding-down process.

McKay will not be around to deal with the aftermath of the Ernst & Young report as he steps down as Auckland Council chief executive at the end of the month.

But it is a sad note for him to go out on after the enormous workload he has shouldered over the past three years following the merger of seven Auckland local authorities and organisations into the Auckland Council.

The Ernst & Young (now known as EY) report went to Brown's office at the weekend for factual accuracy checks under the usual "natural justice" provisions involving such inquiries.

It is not yet clear whether Provost's watching brief will end with the EY report's publication, which sources suggest is expected this week but might yet face another delay.

The report is already three weeks past deadline.

But the Auditor-General does need to take a close look at whether - given the controversy that will naturally attach itself to the results of the EY review whether it is positive or negative for Brown - it is appropriate in any future such cases involving major political figures in local government for them to effectively be investigated by council staffers and their appointed advisers, rather than by Provost's own team.


The Auditor-General has sweeping powers and in my view this is exactly the set of circumstances where Provost should have stepped in to short-circuit the "negotiations" process.

The EY review has been directed to examine whether Chuang received improper preferential treatment as an employee, contractor or adviser within the broader Auckland Council group.

And, if there was any use of council resources within the office of the mayor, in respect of the mayor's relationship with Chuang, that contravened council policies (for example payments and procurement).

There are the usual broad terms of reference opening the door for EY to probe any other other issues that "the reviewers or chief executive consider relate to, or arise out of, the above matters".

But when boiled down the fundamental issue is whether Brown has complied with the Auckland Council's own code of conduct. How he managed the obvious conflict of interest posed by his affair with Chuang, who was a member of the ethnic advisory panel and for whom he wrote a reference to help her secure a job with the Auckland Art Gallery. There is also the alleged use of freebies from hotels to hold his trysts with his former mistress.

It is fundamentally as simply as that.


There has been a great deal of speculation - some of it obviously unfounded - over a Hong Kong Government-funded trip that Brown took in January.

The Hong Kong trip should clearly have been disclosed by Brown and his office as it was an official visit. Bizarrely, it wasn't.

This has further damaged Brown as council policies require timely disclosure.

Brown's office provided me with a copy of his itinerary. It is abundantly clear that his trip was official in its nature.

It was a typical five-day visitor programme jam-packed with meetings organised by Hong Kong Government officials. Among items on the mayor's itinerary: meetings with Joseph Lai (Permanent Secretary for Transport and Housing), whom the mayor wished to talk with about latest developments in Hong Kong's transport system; Iris Tamm who is managing director of Hong Kong's Urban Renewal Authority; visits to the Legislative Council, the Hong Kong container terminal and airport authorities; talks with the director of planning; Andrew Wong (Permanent Secretary for Commerce and Economic Development); briefings by the solicitor-general on Hong Kong's rule of law; briefings on Hong Kong's position as an international finance centre; and a meeting with Julie Mu from the Independent Commission against Corruption on Hong Kong's anti-corruption policies.

Along the way there was a side trip to Shenzhen to visit Huawei.


As for Brown, in my view former minister Rodney Hide hit the nail on the head when he recently described him as a "busted flush". Hide was speaking with the authority of having been the central government politician who was in charge of the political orchestration leading up to the birth of the new Auckland Super City.

He also had the personal experience of having seen his own political capital and authority disappear when his brand as a perk-buster came under attack.

Brown has been sorely damaged by this affair, in my view fatally.