America’s Cup warning
Dalton dismisses safety risk
Team New Zealand boss Grant Dalton dismissed warnings that cost cutting on America’s Cup Event staff could lead to injuries or deaths, saying only that there may be less “dunnies” around Auckland’s waterfront for the event and that “we better hope there’s not an earthquake”.
In another email, he declines an invitation to a seminar to identify risks for next year’s event, saying “I would rather staple my c*** to a burning building [ than] attend a health and safety briefing — are you kidding me, that would be the most f****** boring arse- covering load of mind- numbing bullocks [ sic] ever invented”.
The Weekend Herald can also reveal that in June Auckland’s Harbourmaster accused America’s Cup Event of trying to renege on aspects of an agreement under which it was given $ 40 million of taxpayer money around water safety management for the upcoming regatta and associated events.
The emails have been revealed while Team New Zealand are in dispute with the Ministry of Business, Innovation and Employment ( MBIE) over a $ 3m fee which the syndicate charged ACE, saying it was for designing the boats to be used in next year’s regatta.
ACE was promised up to $ 40m of taxpayer cash to put on the America’s Cup. MBIE says a design fee was never envisioned in the host venue agreement ( HVA) under which the Government agreed to provide the bulk of the funding for the event. It says the payment from ACE to Team New Zealand was not communicated to it or accurately described in budgets or spending updates.
“MBIE’s position is that the hosts ought to have been consulted on such expenditure before it was charged to ACE,” MBIE told Beattie Varley. The timing of mediation on the dispute is still to be determined.
Dalton told the Weekend Herald the material was provided by “disgruntled former contractors” who had embarked on a campaign to damage Team New Zealand. He said a probe by forensic accountants had cleared the syndicate of wrongdoing.
Tina Symmans, ACE’s chairwoman, said the company took health and safety seriously. “[ It] is on the agenda as an extremely important topic of discussion at every board meeting.”
While the final Beattie Varley report concluded it had not seen evidence that ACE or Team NZ misapplied the taxpayer money, it said the record keeping of both bodies meant the validity of the payments could not be objectively verified.
It also said management and governance of the organisations deserved criticism, in particular because so much taxpayer money was being spent.
The $ 40 million event investment
After winning the 35th running of the America’s Cup in Bermuda in 2017, a company run from within Emirates Team New Zealand’s base — America’s Cup Event — was promised $ 40m to run the America’s Cup in 2021, as well as a series of lead- up events.
While Dalton is chief executive of both companies, under the terms of the agreement through which it was given the money, ACE and Team NZ ( TNZ) have distinct purposes.
“ACE shall be responsible for all costs and expenses in relation to its delivery of the Events and [ Team New Zealand] shall be solely responsible for conducting the sporting campaign for the defence,” states the host venue agreement between Team NZ, Auckland, and the Government.
Elsewhere the agreement states that TNZ established ACE “to undertake its event management responsibilities” in relation to the sailing competitions.
Governance experts have questioned the wisdom of the structure, with Dalton’s dual roles creating possible incentives to focus on one role rather than the other.
In interviews, even Dalton appears to have acknowledged the structure had its problems.
Emails show Dalton pressuring for aspects of the budget for next year’s event to be cut back, as he questioned whether he would be able to get the amount of money budgeted from the challenger of record for the event.
“Obviously we need to get the budget down,” Dalton wrote to staff of event management company Mayo & Calder, as well as several Team New Zealand staff and Tina Symmans, the chairwoman of ACE, in April.
“My over- riding opinion is that there is not enough ‘ multitasking by employees’ ( ie there needs to be less people which has a positive budget impact),” Dalton wrote of the proposed costs, requesting a breakdown of staffing costs and details of expenses ranging from big screens to temporary toilets.
Michael Choy, a Mayo & Calder employee, sent back a lengthy response, explaining the costs and providing a series of quotes, some based on the company’s handling of the Volvo Ocean Race stopovers in Auckland.
The email concluded with a warning about the potential risks of cost- cutting.
“We all have a huge level of responsibility and tasks already
— and to be frank, when the event comes on, if we are all still juggling too much then something will go horribly wrong,” Choy wrote.
“Our biggest concern is we will be working on a building/ construction site for three weeks before and three weeks after the event and we have seen it before with time pressure and not enough qualified/ skilled people and then injuries happen.”
Choy wrote that the Government had “already sent a warning” via a report by PWC that ACE and the challenger of record ( COR) for the event were under- resourced, “so they