7. Hon TONY RYALL (National—Bay of Plenty) Link to this
to the Minister of Health
Has he discussed the circumstances of the “serious conflict of interest” involving his appointee as deputy chair of the Capital and Coast District Health Board, Ken Douglas, with the chair of the board; if so, when?
Hon PETE HODGSONWhy does the Minister think that the chairwoman of the district health board was concerned enough about Ken Douglas’s involvement to get two legal opinions, but this Minister will not even raise any concerns with her?
Barbara StewartWould Mr Douglas receive any pecuniary advantage in the event of a contract being awarded to Healthcare of New Zealand Holdings Ltd; and how does his situation compare with that of Dr Bierre?
A pretty interesting question! Mr Douglas stated in a letter to the chair a month or two ago—before he was deputy chair, actually—that he does not have any direct pecuniary interest arising from his shareholding as a non-executive director in Healthcare of New Zealand, and that he has no contractual—
Madam SPEAKERWould the Minister please be seated. Members wish to hear the Minister’s answer. Would the Minister please start again.
Let me quote from a letter that Ken Douglas wrote to his chair on 29 March, where he says: “As a non-executive director I do not have any direct pecuniary interest arising from Healthcare of New Zealand Holdings Ltd’s contracts, and I have no personal contractual relationships with Capital and Coast DHB or any other DHB.” I would contrast that with National Party member and good mate of Jackie Blue, Dr Tony Bierre, who had a 15 percent shareholding in Labtests Auckland, and therefore a 15 percent share of the profits of a half-billion-dollar contract, when his contribution to the working capital of that company was zero—or zilch, or diddly squat—and that pecuniary interest was acquired through what Justice Asher labelled an improper use of knowledge. So there is the contrast: upfront honesty from a member of the Order of New Zealand, versus insider trading from another Tory.
Is it appropriate for a district health board member to participate in discussions on a proposal to later contract out services, knowing that a company of which he is a director is going to bid for those contracts, without declaring that specific interest at the time—or does the Minister not care?
The management of conflicts of interest remain the problem and property of the boards. That is the law.
Hon Dr Nick SmithThat is the law—the law. That is the law. You see, black-letter law—that is what I follow. I follow the letter of the law. Let me give the House another quote from the letter from Ken Douglas to his chair of 29 March: “It would be helpful for the management to inform me of all possible areas of conflict, both current and in the future.” This is a man who not only declares his interests but who wants help from the management in managing his interests proactively—and that compares with a dirty Tory who decided that he would not tell all the truth, and therefore a half-billion-dollar contract went to ground.
Why will the Minister not answer the question of whether he would approve of a district health board member participating in a discussion on the later contracting out of services, when that member is a director of a likely bidder for those contracts and did not declare that specific interest at the time nor excuse himself from those discussions—why will the Minister not answer that question?
Staff from the Ministry of Health, who are my advisers, advise me even this week—even today—that they have no reason to believe there is anything untoward in conflict of interest management in respect of Ken Douglas or in respect of any other member of the Capital and Coast District Health Board.
Is the Minister saying that because Ken Douglas wrote on 29 March to advise that he had an interest as a director in contracts between Healthcare of New Zealand Holdings and the district health board, that excuses his behaviour of attending a meeting of the Capital and Coast District Health Board on 7 February 2007 where he participated in a discussion on the later contracting out of community health care services, and where he did not specifically declare his interest as a director of a company that would be a likely bidder nor excuse himself from those discussions?
The member forgets that conflicts of interest are recorded in a conflicts of interest register that is itself a matter of public information that the member can easily get hold of should he wish. He can trail through the register and trail through the business of the board, and see whether he is comfortable. My advisers advise me that they are comfortable.
Maryan StreetFor the information of the House, what is the difference between a conflicted district health board member who openly declares a conflict of interest so that it may be properly managed and a conflicted district health board member who does not do that?
That is precisely the point; that is precisely the difference between Mr Douglas and Dr Bierre. Mr Douglas has gone to great lengths to declare his interests in detail, so that they can be transparently managed. Dr Bierre’s history can be found in a High Court judgment on a case in which the contrast could not be more stark. He was a National Party member, a friend of Dr Jackie Blue, and the judge said that he made improper use of knowledge—he was an insider trader.
In giving his answer to these questions and quoting from Justice Asher’s ruling, is the Minister also aware of Justice Asher’s ruling that in allowing Dr Bierre to continue to be involved in discussions about the services while he wished to bid for them himself, the board permitted that process to be damaged and that it was impossible for Dr Bierre to divorce himself of his knowledge of the board’s philosophy and wishes; Ken Douglas did not declare a specific interest involved in the contracting out of community services at the Capital and Coast District Health Board meeting of 7 February 2007, doing so only on 29 March, and will the Minister now answer the question of whether he would approve of that behaviour?
The board manages conflict of interest issues, but here is a clue: one person has a non-executive director role, and cannot be advantaged or disadvantaged by that company getting some value or not from a contract—cannot be personally advantaged, as he said in a letter. The other person had a 15 percent stake in an interest in a company, and would have picked up 15 percent of the profits of a half-billion-dollar contract had the High Court judge not stopped him. That is the difference between the two people. I wonder whether the member who asks the question can see the difference; I can.
If Ken Douglas’ conflict of interest is so well handled, why has the chairwoman of the Capital and Coast District Health Board called for two detailed legal opinions on Ken Douglas’ behaviour, and does the Minister expect to wash his hands, like Pontius Pilate, of every seedy conflict in the district health boards?