Grant stalled over link to probe

A planned West Coast waste-to-energy scheme with links to discredited public officials has had Government support since 2016.

New National Party leader Simon Bridges yesterday criticised the current Labour-led Government for approving $350,000 for the scheme as part of its $1 billion provincial growth fund.

However, it has emerged the previous National Government had already made payments to Renew Energy, the company behind the waste-to-energy initiative.

Gerard Gallagher and Murray Cleverley are former directors of Renew Energy and Gallagher remains a shareholder.

Both men, along with their colleague Simon Nikoloff, were investigated by the State Services Commission (SSC) last year after a Press investigation into their private dealings while employed by the now-defunct Canterbury Earthquake Recovery Authority (Cera).

Gallagher and Nikoloff were found to have engaged in serious misconduct in trying to earn fees for property sales and other services while operating as Cera investment facilitators. Cleverley’s judgment was deemed to have been below the expected standard.

Yesterday, Economic Development Minister Shane Jones announced the $350,000 grant for Renew Energy, previously known as Waste Energy, had been suspended after it was revealed Gallagher remained the subject of Serious Fraud Office (SFO) inquiries.

Jones said officials had let him down and people receiving the regional development grants were expected to pass good character tests.

Officials had apologised for not making him aware of Gallagher’s background, he said.

However, he said he had been unaware $50,000 of the grant had already been paid by the previous government.

A National spokeswoman said the previous payments were for a feasibility study. According to invoices, she said both payments were approved on August 31, 2016.

Feasibility work was completed before the SSC investigation began in February 2017 and before the ongoing SFO investigation began in April 2017.

A $21,143 payment was made to Waste Energy in March 2017. Another payment, of $24,281, was made on April 11, 2017.

The second payment was made on the same day the SSC investigation’s findings were released.

Jones said he wanted to distinguish between the proposal and its salesmen who might not have been the ‘‘best people’’ to promote it.

‘‘When it became evident this gentleman had these investigatory difficulties I had to be absolutely confident if going to spend [money] on behalf of the Crown it’s going to stack up.

‘‘I don’t want the West Coast to think I have lost my bottle.’’

He had asked the officials to check all other directors involved in the project, he said.

Proponents of the plant say it could provide 100 jobs and boost the struggling region’s economy.

Gallagher last year went on a fact-finding trip to England with Buller District Mayor Garry Howard and council economic development officer John Hill. The trip cost Buller ratepayers $6500.

The SSC inquiry, conducted by Michael Heron QC, found Gallagher and Nikoloff had tried to insert their private company into property deals in the hope of earning personal finder’s and project management fees.

Heron said they did not disclose their activity to Cera, or in one case to a property owner, which amounted to serious and sustained breaches of the public service standards and would have warranted dismissal.

State Services Commissioner Peter Hughes then referred Heron’s findings regarding Nikoloff and Gallagher to the SFO.

‘‘I don’t want the West Coast to think I have lost my bottle.’’ Shane Jones, Economic Development Minister