Hodgson Pete: Protected Disclosures Amendment Bill — In Committee 
Hodgson Pete: Protected Disclosures Amendment Bill — In Committee 
[Volume:653;Page:2753] 
Hon PETE HODGSON (Labour—Dunedin North) 
: 
 I have had enough of this. I have heard the Government speakers talk a little bit about the Hawke’s Bay District Health Board I have heard the Government speakers talk a little bit about the Otago District Health Board and I have heard the Government speakers talk a little bit about the Ministry for the Environment. I am going to pick one of those three points and tell my story. I will not talk about the Hawke’s Bay District Health Board even though I was the Minister of Health at the time when the chair of the district health board rang me on the whistleblowing issue one January. I will not talk about that because I have information regarding folk who are unable to defend themselves. The information involves employees of the district health board which is why it is not proper. 
For the same reason I will not talk about the Ministry for the Environment even though I know David Benson-Pope rather well of course and even though I know the Secretary for the Environment at the time and even though I was the witness to the investigation that was carried out by the Solicitor-General. I was a witness to those hearings that he carried out with David Benson-Pope. The reason I will not comment is that that information also involves private individuals—not Mr Benson-Pope or the chief executive of the Ministry for the Environment—and it would not be proper. But I can talk about the Otago District Health Board. 
I can talk about the Otago District Health Board for several reasons. First of all the board is in the area that I happen to represent—Dunedin North. I was Minister of Health at the time I know Richard Thomson and I know the chief executive Brian Rousseau. I know most of the board members; they are either friends or acquaintances. Some of them I do not know well but most of them I do. I have never met Michael Swann by contrast. The story is that Michael Swann set up what was to become the biggest fraud in public history before Mr Thomson became chair of the board. Mr Swann did so in a series of techniques that were revealed in court and are on the public record. They are no great secret. But those techniques were regarded by the Serious Fraud Office and others who were involved in the investigation as clever—sufficiently clever that Audit New Zealand when it looked at the Otago District Health Board on six separate occasions in the intervening years did not see anything. 
The fraud was not seen when the district health board as a matter of ordinary managerial behaviour decided to do a quick run on its information technology expenditure and found it to be a little below normal—not above normal. It was not found when the major contracts of the Otago District Health Board in another ordinary managerial activity were taken aside and one by one they were sent out and inspected by independent folk to make sure that they were all on track. The reason that the information technology contracts were not covered in the 10 biggest contracts is that they had been atomised by the fraudster so that they could not be seen as one contract. 
It is a matter of fact that the fraudster had big flash cars in the car-park. One very clever Minister of Health was heard to ask only a few months ago: “How come nobody noticed the Lamborghini alongside the Toyota Corollas?”. People did notice; the previous chairman noticed. He said to Mr Swann: “What are you doing with that sort of car on the salary we give you?”. Mr Swann’s reply was: “I’ve developed some software which I have licensed to Microsoft. I am independently wealthy. I come to work because I love my job not because I need it.” So the idea was born that this guy was clever. It was later discovered that Microsoft was not very keen on licensing software and that that was a manufacture as well. But those are the sorts of techniques that the gentleman used. 
There was therefore no way of knowing that the fraud had taken place—until one day the chairman of the Otago District Health Board received a tip-off. It was not firm but it was sufficiently concerning so that the chair of the district health board took a number of actions. He advised the police who did nothing. He then ran using some very clever techniques involving the chief financial officer of the time a series of— 
The CHAIRPERSON (Eric Roy) 
: We are getting away from the bill. I know there has been a kind of political debate on either side of the Chamber but I think we have concluded that. I would like to draw the debate back to relevancy to protected disclosures— 
Hon PETE HODGSON 
: Let me offer to knock it off in 2 minutes. 
The CHAIRPERSON (Eric Roy) 
: I will give you 2 minutes. 
Hon PETE HODGSON 
: Let me speed up. At the point that the chairman became aware a series of activities took place that led to the fronting of Mr Swann. He was subsequently released from his duties that day and the information technology system in the Otago District Health Board was then secured There was an investigation by the Serious Fraud Office a series of court cases and Mr Swann was found guilty on all charges and now is in a jail in Dunedin where I hope he spends some time. After that the incoming Minister of Health decided—years later—that he wanted someone to be held accountable. So what he did in response— 
Colin King 
: I raise a point of order Mr Chairperson. I believe that the speaker on the other side of the Chamber is now departing from the tolerance that we were affording him on this side and he is starting to attribute blame. I would call the member back to the bill or to be seated. 
The CHAIRPERSON (Eric Roy) 
: I am in some difficulty here. The member is giving an explanation and I gave him another 2 minutes for that. I do not want to have a political situation arise where I have to give someone on the other side of the Chamber the same. I really want to get back to the bill. I ask the member to contain himself to detail—and this is a bit of an unusual step for me. 
Hon PETE HODGSON 
: I understand this very well. I make one simple point: that if one has protected disclosure legislation in front of the House then one needs to be very careful about the whole idea of sacking the person who did the disclosing.