The Am Cup parties need to clear air

Suspension of further funds to the America’s Cup, announced on Thursday after disclosures this week by the Herald, is the appropriate course as it should provide the parties with the impetus to focus on answering questions swirling over next year’s regatta.

Team NZ and America’s Cup organisers are the subjects of a Ministry of Business, Innovation and Employment (MBIE) inquiry over the spending of public money.

The Government is spending $136.5 million — including a $40m host fee — on hosting the 36th America’s Cup. Auckland Council has also committed $113m to the event.

The halt on cashflow was a swift change of tack from the Government after Economic Development Minister Phil Twyford said, only the day before, there was no freeze during MBIE’s review.

Disconcertingly, Twyford also said this week the Crown contribution had been set aside to be spent from now until the event, but he did not know how much had been already spent. “I’ll get advice on that,” he said when pressed on whether he should know.

Disappointingly, any answers within a Beattie Varley report on America’s Cup Event Limited (ACE) cannot now be made public after the Herald and NewstalkZB were blocked by a High Court injunction filed by Team New Zealand and ACE.

Team NZ has repeatedly denied any impropriety and said no public money had been misused.

“Emirates Team NZ and America’s Cup Event categorically deny any wrongdoing and consider that they have already addressed the concerns of MBIE and [Auckland] Council, and their adviser Beattie Varley,” a Team NZ statement said.

Team NZ said a $3m payment from ACE for event-related matters was a “legitimate” transaction but confirmed ACE had been defrauded by scammers into sending money to Hungary.

Grant Dalton, who heads both the Emirates Team NZ syndicate and the ACE company organising the regatta, said a hacker had gained access to material belonging to a European-based television contractor, including details of contracts and when payments were due to be made.

ACE received an email, which appeared to have come from the contractor, advising of a new

Hungarian bank account to which the payment should be made and a seven-figure sum was subsequently paid into the account. The alarm was only raised weeks later when the contractor asked about the missing money, and police were alerted.

Dalton said he personally approved the invoice but did not “check the noughts and the ones on the bank account”.

Concerns have been raised in the past about the organisational tiers of Team NZ, and the revelations this week will only fuel more.

"Any answers within a Beattie Varley report . . . cannot now be made public after the

Then Economic Development Minister Steven Joyce noted as such in 2014 when releasing an independent evaluation of the Government’s investment in the San Francisco regatta.

“One of the things I have made clear to team representatives is that the Government must have confidence that a strengthened governance structure has been put in place before it will consider a further investment of taxpayers’ money in another challenge,” Joyce said.

At that time, Joyce said he believed Team NZ needed five or six directors, including one or two the Crown had endorsed. Team NZ Ltd currently has four directors in Dalton, Robert Field, Kevin Shoebridge and Sir Stephen Tindall.

For the sake of public confidence in continuing to invest in the event, full disclosure is now more essential than ever.