America’s Cup funds halt pending inquiry
AUCKLAND: The Government says it will not make further payments to America’s Cup organisers as it investigates claims over the spending of public money.
The announcement came shortly before The New Zealand Herald and NewstalkZB were served an injunction in the High Court by America’s Cup Event Ltd (Ace) and Emirates Team New Zealand to stop them from publishing details of a report commissioned by the Crown into the spending of public money.
The newspaper and radio station owner NZME, which was not represented in court, said it would fight the injunction, on the grounds of public interest, given the level of public money involved.
A lawyer representing ETNZ and Ace advised NZME that Justice Christine Gordon had ruled: ‘‘This court orders that NZME Publishing Ltd and any other persons served with this order are restrained from publishing the interim Beattie Varley report into
America’s Cup Event Ltd or any part of the contents of that report or any part of the recordings referred to in that report until further order of the court.’’
ETNZ chief executive Grant Dalton emailed his lawyers with the comment ‘‘nice lads’’ after he was advised of the decision.
NZME was copied into the email. The Ministry of Business, Innovation and Employment confirmed, in a statement yesterday afternoon, it had suspended public funding.
MBIE said $40 million has been set aside for the event fee.
To date, $29 million has been paid to Ace in line with contractual funding milestones.
‘‘While Crown and council work through this process regarding the claims made relating to the organisation of the 36th America’s Cup, we are not intending to make further payments to Ace,’’ MBIE tourism general manager Iain Cossar said yesterday.
‘‘This will be revisited pending the outcome of the process.’’
ETNZ and Ace are at the centre of an inquiry commissioned by the Crown over the spending of public money, including allegations of a ‘‘reclassified’’ $3 million loan and claims of fraud involving a Hungarian bank account.
Dalton has confirmed the team lost a sevenfigure amount, but said that it was the victim of an international scam.
A confidential June 22 letter written by MBIE and the Auckland Council reveals allegations concerning the handling of public money, the operation of the Cup itself and worries about public safety. It notes officials’ concerns that Ace and ETNZ, are in breach of obligations.
A multinational police investigation is under way into how a hacker posing as a European TV contractor convinced ETNZ to send a large financial payment to a Hungarian bank account.