Auditor-General asked about her Sky City conflict of interest

Auditor-General Lyn Provost has been asked to explain a conflict of interest between her private investment in Sky City casino shares, and her November 2013 decision to turn down a request for an investigation into aspects of the Sky City casino convention deal controversy.

Public finances and accountability watchdog Penny Bright, who polled fourth in the Auckland super-city mayoral campaign, sent an email to the Office of the Auditor-General on 8 November last, seeking an investigation into whether the Police organised crime agency OFCANZ “could or should have carried out some work to assess the effect of the [convention centre Bill] on the risk of money laundering in New Zealand”.

OFCANZ had previously stunned commentators by revealing it had failed to investigate the money laundering implications of the deal, despite having a statutory responsibility.

Bright complained to the Audit Office about the failure of a public agency to do its job, and her letter was answered by Controller and Auditor General Lyn Provost who wrote, “the Auditor-General’s power to carry out an inquiry is a discretionary one. Large inquiries involve a substantial investment of resources by this office and the entity we are inquiring into.

“We receive a number of requests for inquiries each year and must choose carefully which matters warrant that level of detailed scrutiny. Our focus is on the use of public resources, and significant financial, accountability or governance issues in a public entity.”

Having set the context, Lyn Provost then declined to investigate, despite the ‘accountability’ issue, saying it  intruded on government policy and was therefore beyond the scrutiny of her office.

What Ms Provost did not declare in her letter to Penny Bright is that she held shares in Sky City casino. Ms Provost had previously recused herself from involvement in a prior case involving Sky City for that reason.

Provost is also a former Deputy Commissioner within the New Zealand Police who worked alongside the team responsible for OFCANZ.

InvestigateDaily has sought comment from Ms Provost. Late today she responded with the following:

“The particular inquiry request fell outside my mandate in the Public Audit Act as I cannot inquire into matters of policy.  As the reason for declining to inquire was a matter of law not judgement, I replied myself.  I also took the opportunity to reinforce our criteria for inquiries.

“I have and will continue to stand aside on appropriate matters.”