The iwi was also "deeply offended that there was no discussion with the iwi in advance of decisions being made.
"Reactions to lobby groups in the media are not how the Crown and iwi normally operate and it set a dangerous precedent to do so. This approach is likely to reflect the culture and poor understanding of the Corrections Department.
"Corrections just continue to get it wrong with a strong right wing approach by Judith Collins" she said.
She said "the commissioner visit was benign, there was no Terms of Reference of the review submitted and Iwi were completely shut out of any opportunity to provide feedback of a role that they have committed too for the last 6 years."
Radio New Zealand reported Mr Smith said Mr Nui had declared his gang connections at the time of his application, but had only stated he was a patched member of Black Power more recently.
Mr Smith said gang membership was a conflict of interest, and the department would be more explicit about that in the future.
The department was now working with the cross-agency Gang Intelligence Centre to review all of its volunteers for conflicts of interests, he said.