Trusts spent public money on secret fund to sway voters
West Auckland trusts wanted voters to ‘make the right decision’ on booze monopoly – despite telling lawmakers that it would be an inappropriate way to spend public cash. reports.
Publicly-owned trusts, which hold a monopoly on alcohol sales in West Auckland, established a secret ‘‘fighting fund’’ explicitly aimed at preserving that monopoly and attacking a volunteer community group advocating for a local referendum on the issue.
The fund was, in the trusts’ own words, established to ensure ‘‘the public make the right decision’’ in any vote.
The trusts now say the fund has been closed, and deny they spend public money on keeping the monopoly. They are two of the just four remaining licensing monopolies left in New Zealand from a once-extensive network established in the 1940s to control alcohol supply.
Newly released documents show the trusts also massively increased advertising spend, their Facebook activity and professional services spending around the 2019 election for trustees in which the rival group, West Auckland Licensing Trusts Action Group (Waltag), ran candidates for the first time.
Waltag spokesman and anti-monopoly campaigner Nick Smale has complained to the auditor-general that the spending figures showed the trusts ‘‘used public resources for political purposes and have consequently used public funds inappropriately and undermined democratic processes’’.
Local government expert Dr Andy Asquith, from Massey University, agreed with Smale that it was wrong, saying: ‘‘It stinks, and the number of people I talk to about incidents like this beggars belief.
‘‘My big bugbear is the declining turnout in local elections, and people are turned off and disengaged precisely because of behaviour like this, where a few mates get together and look after each other.’’
Asquith said a major issue was the lack of accountability in cases such as this, suggesting the auditor-general was an inadequate policeman for local officials. The information was obtained by Smale as part of a huge information dump from the trusts, almost three years after requesting some of it under the Local Government Official Information and Meetings Act (LGOIMA) and only after a complaint to the Ombudsman, who delivered a provisional view that it must be released.
Board papers show the trusts were deeply worried, and considered a counter PR campaign, including floating the idea of even trying to recruit prominent West Aucklanders
such as Simon Dallow, Bob Harvey, Duncan Garner and Dai Henwood to make public statements of support.
Board minutes show the trusts’ chief executive Allan Pollard, a recent hire, spent ‘‘substantial time’’ on the requests, including commissioning a report from economists NZIER to try to ‘‘change the ombudsman’s mind’’.
Subsequent minutes said Pollard was ‘‘keen to front foot’’ the release and ‘‘not attempt any defensive communication strategies’’.
Pollard told the Sunday StarTimes that when he became CEO in June 2020 he realised it was a long-simmering issue that needed resolution, and he wanted to be as ‘‘transparent as possible’’. But the NZIER report showed despite the monopoly the trusts were in a highly competitive market, and he used this to successfully argue that releasing financial information would hurt their business.
The documents outline the trusts’ deep-seated fear of losing the monopoly.
In October 2018, a board report from the then chairman of the trusts’ shared operating company, the late Brian Corban, recorded the ‘‘fighting fund’’ had been approved to ‘‘meet the challenge from Waltag head on’’ and ensure ‘‘the public make the right decision’’.
Its existence conflicted with evidence given by Waita¯kere Licensing Trust president Linda Cooper, an Auckland councillor, at a parliamentary justice select committee hearing last July. At that hearing, MP Nick Smith asked Cooper: ‘‘Do you think it would be appropriate to spend trust funds to promote and support the ongoing monopoly?’’
She responded: ‘‘No, because we don’t do that. It isn’t appropriate to do that.’’
Asked about the conflict between those comments, Cooper told the Sunday StarTimes the fighting fund no longer existed, and she had gone on to tell Smith that the trusts spent money advertising their services, like any business.
Cooper said the trusts were simply advertising their business and their community funding programme. She diverted further questions to Pollard, saying: ‘‘Did Nick give you these questions? . . . I’m not quite sure what angle you’re trying to get at.’’
Pollard, too, ‘‘categorically denied’’ the fighting fund still existed, and said he wouldn’t support one: ‘‘What we do have is a marketing budget, like any business . . . my focus is on running the business, not protecting
the monopoly.’’
In a recent letter to Smale, Cooper wrote that the trusts would ‘‘continue to promote, advocate and advertise our benefits to our wider community, irrespective of the market conditions, monopoly or otherwise’’, and said the trusts would ‘‘vigorously defend a business model that was voted for, by our community, in 1972 and again in 2003’’. Cooper denied that was the same thing as protecting the monopoly.
Those two dates were the last time the monopoly went to a referendum. Waltag have been collecting signatures for several years to force another, and believe they are close to gathering the required 15 per cent of registered voters to trigger one. The trusts’ own polling suggests public opinion may be, for the first time, slightly in favour of ending the monopoly.
But Pollard said Waltag had had long enough to gather their numbers. ‘‘Five years dragging the trusts through the media is not great for anyone in the community.’’
Asked how they would respond if a referendum was called, Pollard said: ‘‘We will continue to put forward the benefits of our model, we do that now . . . if that’s campaigning, nothing is going to change.’’
Smale’s letter to the auditorgeneral argued the previous poll results didn’t justify the use of public money to ‘‘actively persuade the public to maintain support for that result’’.
Smale pointed the auditor-general to a rise in advertising spend from roughly $450,000 a year to over $1 million in the 2019-20 election year, with a peak in September (polling month); a huge increase in professional services fees ($500,000 a year in 2016-17 to $1.2m) which he believed was partly due to fighting his LGOIMA costs; a big increase in Facebook activity at election time and the trusts’ annual survey by pollsters UMR which had begun including questions directly quoting from Waltag’s campaign statements.
‘‘It’s OK to have some level of promotion of your business, but this is well over the line of what is acceptable and normal,’’ said Smale.
‘‘They are clearly fighting one side of a political argument ... We are their political opponent, and they are effectively acting as the campaign office for Team Monopoly. But the question of competition versus monopoly is one for the people, and their role should be to provide impartial, balanced information and let the people choose.’’
‘‘People are turned off [local elections] and disengaged precisely because of behaviour like this.’’ Dr Andy Asquith Local government expert