Ryall Tony: Questions for Oral Answer — Questions to Ministers 
Ryall Tony: Questions for Oral Answer — Questions to Ministers 
[Volume:635;Page:6625] 
4.  
Hon TONY RYALL (National—Bay of Plenty) 
 to the  
Minister of Health 
: What reports if any has he received on an alleged $16 million case of fraud at the Otago District Health Board and what do these reports say? 
Hon PETE HODGSON (Minister of Health) 
: 
 I have had a number of oral briefings on this issue all consistent with the no-surprises policy we have in place. A number of the matters are likely to be dealt with in court in both a civil and a criminal context. As a result I cannot comment on them as freely as I might otherwise. 
Hon Tony Ryall 
: Can the Minister confirm that the alleged fraud which involves the board’s former information technology manager Michael Swann and which is now being investigated by the Serious Fraud Office relates to $16.9 million of contracts over a 5-year period with a single company supposedly for computer maintenance and software licence agreements; and is he concerned that the chief executive officer has now admitted that none of these multimillion-dollar contracts were ever tendered? 
Hon PETE HODGSON 
: I can confirm some of those facts but I cannot confirm all of them. I will just say to the member that this issue is under very close scrutiny from the Serious Fraud Office. There is a story to be told and I am confident that it will be told. 
Hon Tony Ryall 
: Is the Minister aware that Michael Swann bought a former marine research vessel in Hawaii berthed it in Dunedin—where it underwent a massive refit becoming a 50-metre luxury launch reportedly with a plasma television set in each room—and despite this high-profile activity is the Minister telling the House that no one at the district health board asked how a former bankrupt and hospital manager on $200000-a-year could afford such extravagance over such a period of time? 
Hon PETE HODGSON 
: The alleged extravagance is actually greater than the member portrays and I cannot confirm that there was no earlier investigation—I cannot confirm that. 
Hon Tony Ryall 
: Have you asked? 
Hon PETE HODGSON 
: I most certainly have. It is not in the public interest for me to reveal more than I have and the reason is that we have a serious investigation before us and I am determined that the investigation will be allowed to proceed utterly unmolested. 
Hon Tony Ryall 
: Is the Minister aware the Otago District Health Board has now secured asset-protection orders over property that Mr Swann has an interest in—including 30 vehicles mostly luxury cars; several boats including the 50-metre luxury launch  
Townsend Cromwell 
; a substantial home and other property in Wanaka; a residence in Dunedin with a Government valuation of $1.1 million; and a property in Central Otago; and is the Minister telling us that no one ever asked about how a former bankrupt and district health board manager could afford such a lifestyle with no one ever asking about it over the 5 years he was doing it? 
Hon PETE HODGSON 
: Let me just repeat that the first part of the member’s question and its content are substantially correct. I will not confirm that no one ever asked questions in earlier years and I will not reveal—because it is not in the public interest at this stage—what questions were asked in what year and by what persons. 
Hon Tony Ryall 
: What eventually prompted the Otago District Health Board to sack its chief information officer Michael Swann “for gross mismanagement of the district health board’s IT procurement including failure to comply with delegation of authority and purchasing policies”; and what action is the Minister taking now to assure the people of that region and this country that district health board information technology procurement policies and other such policies are safe and to ensure that the public’s money is protected despite what appears to be 5 years of extravagance when a district health board did nothing? 
Hon PETE HODGSON 
: I say gently to the member that the issue of extravagance may exceed 5 years. District health boards around the country need no further incentive to ensure that what has happened in Otago does not happen elsewhere. 
Paula Bennett 
: I raise a point of order Madam Speaker. I just thought that there might be something wrong with the Minister’s microphone because we are having a lot of trouble hearing him back here. 
Madam SPEAKER 
: I think there might be trouble with a lot of microphones today. 
Hon PETE HODGSON 
: I repeat for the member that the issue about 5 years of activity might actually be short of the mark. Secondly district health boards need no further incentive to ensure that they take care with their information technology contracts or indeed any of the other contracts of any size in district health boards. 
Hon Tony Ryall 
: Have you told them how it happened? 
Hon PETE HODGSON 
: I say to the member that they do not need to be told by me because the story has spread very quickly—well before it became available to the member who asks the question. Finally—in case the member wants to ask—I cannot give an assurance that there are no issues of fraud elsewhere in the health sector. There are some 16500 active contracts in the health sector. There was serious fraud about 10 years ago in the New Zealand health sector involving about $5 million. I say to the member that that is why we have law against fraud. 
Jo Goodhew 
: Can the Minister confirm that he has just told us that he does not know whether there are perhaps some Mr Swanns still lurking in the system who are misusing highly sought after health dollars? 
Hon PETE HODGSON 
: I have just proactively said that I will not give an assurance that there is no other case of fraud in the health sector. There are about 16500 contracts that I know of in the health sector. I remind the member that about 10 years ago there was a significant fraud case in the health sector. Unfortunately fraud occurs from time to time in this society which is why there are laws written against it. I say to the member that this investigation will be completed will be thorough and will become public as the months go by.