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WHO DO WE PICK FOR MAYOR?

Many ratepayers genuinely believe that ratepayers are responsible for the actions of the mayor and councillors that they elect (see the post APATHY on HOME page). If that is the case then we need to be very careful in assessing who we want to control the destiny of Kaipara for the next three years.

In law, local authorities are supposedly accountable to ratepayers. That is a complete sham because, as we and many ratepayers in other districts have seen, councils tend to operate in secret and ratepayers have no idea what is really going on. Even in Auckland City many councillors do not know what is going on.

Not only that, the government enforcement agencies, the OAG - as both auditor and watchdog – and the Minister of Local Government have a track record of ignoring blatant illegalities and imprudent financial decisions.

In addition, the law is stacked against ratepayers. The actions and decisions of a local authority are deemed to be lawful until a court decides otherwise. That gives councils the power to openly flout the law and to get away with it. And even if some brave ratepayers exercise their fundamental rights under the New Zealand Bill of Rights Act and challenge a council's actions, the courts of this country have shown, regrettably, that political outcomes are far more important than the rule of law.

In short the only way that we have any control over those whom we elect is to ensure that we elect the right people, with the right abilities and with the right attitudes

THE CANDIDATES

There are four candidates standing for Mayor.

Jay Ben Tane has an excellent down to earth approach but realistically does not have the experience to cope with such a job.

Christian Simon has come to prominence in Mangawhai because of his alternative solutions to the sewerage problems. But he will be the first to admit that he has little chance of being elected Mayor.

That leaves us with Greg Gent and Bruce Rogan.

Everyone knows Bruce Rogan. He was a rebel when he was a councillor from 2001 to 2004 opposing the excesses of the then council, and for the last few years he has spearheaded the MRRA's drive to hold the KDC accountable and to make it comply with the rule of law.

Bruce Rogan has his own style. People either love him or hate him. But what no one can challenge is his commitment to the people of the district and his desire to ensure that the KDC functions within the law, with complete transparency and in the best interests of the people. For him local government is just that – local. He is totally opposed to the political interference from Wellington and its support of Big Business at the expense of locals.

And then there is Greg Gent.

GREG GENT: IS HE A TROJAN HORSE?

Greg Gent is an enigma.

He admitted at the first candidates meeting that a few years ago he would not have contemplated that one day he would be standing for Mayor of Kaipara.

We all share that surprise.

He has made available his CV and it is also widely available on the internet. He has a sterling record of management at the highest level in many large businesses and organisations, and in several instances has been a government appointee to several boards.

That leads us all to ask: Why on earth is such a high-flyer stooping so low to become Mayor of Kaipara - the cot-case of New Zealand? It is the antithesis of his high flying corporate roles.

Greg Gent says that it is because he is a Kaipara man through and through. "Born in Kaipara and will die in Kaipara". He wants to give something back to the community. He wants to set the KDC on the right path.

That is all very laudable but is it really the true reason?

If it is, then we are blessed to have such a competent candidate with his vast experience of governance and his undoubted management skills. If he can run Southern Cross and all of his other boards part time then surely he can run Kaipara as a full-time Mayor.

But, once elected, Greg Gent will be our ruler for three years. We have to be absolutely sure that his heart is in the right place.

These are my concerns.

GREG GENT AND GOVERNANCE

Greg Gent has made a stand in his election statements on his record and wide experience in governance. In 2012 he was awarded an ONZM (Officer of the New Zealand Order of Merit) “for his services to the dairy industry and corporate governance”.

“Governance” is a loose word that is not understood by many. It is not just about being in a governing role. It is more the way that that role is carried out. It involves the processes that are gone through to arrive at good governance.

Here are some characteristics of governance taken from the internet

• Good governance is accountable

• Good governance is transparent

• Good governance follows the rule of law

• Good governance is responsive

• Good governance is equitable and inclusive

• Good governance is effective and efficient

• Good governance is participatory

One of the governance principles set out in section 39 of the LGA states:

a local authority should ensure that the governance structures and processes are effective, open, and transparent


Greg Gent’s role in the resignation of the KDC councillors in 2012 and the appointment of commissioners
Greg Gent has thrown his track record on governance into the public arena and has asked electors to take into account his broad governance experience.

While there can be no doubt about Greg Gent’s record, many ratepayers are concerned about the events surrounding the resignation of the KDC councillors in 2012 and the appointment of commissioners.  Greg Gent paid a major role in those events.

The issue is whether Greg Gent lacked transparency and had a conflict of interest when he acted as chair of the KDC review team in 2012. In other words did he breach the principles of good governance?

Let us look at the facts behind the case.

Greg Gent has publicly acknowledged that he went to Wellington in 2012 out of his concerns relating to the KDC which appeared to be out of control. He met with government representatives and the Department of Internal Affairs and the upshot was that he was appointed as chair of a Minister’s review team.

Terms of reference were gazetted and the review team went through its processes and reported to the Minister. Greg Gent also persuaded the councillors that they should resign and request the Minister to appoint commissioners to assume responsibility for the KDC. He also pressured the councillors to adopt the LTP and set rates for the 2012/2013 year.  They were necessary formal acts that had to be performed before the commissioners could take over.

The rest, as they say, is history.

Unlawful appointment
I was very concerned at the time at the time about the breach of fundamental principles relating to the review team.

My first concern was that the appointment of the review team was unlawful.

Under the LGA at that time the Minister could appoint a review team but was obliged to go through a very complicated and lengthy process. There was no lawful way a review team could be appointed without any delay.

Despite that, the Minister proceeded to appoint a review team on the basis that the councillors had requested it.

When I challenged the Minister on the legality of this the Minister responded that the restrictive powers under the LGA did not apply because of the request from councillors.  That was nonsense.  The Minister's powers are restricted by statute.  End of story.

The Minister also argued that the government was introducing an amendment bill to allow the Minister to respond to requests from councillors and that would soon be the law. (The Bill was enacted in late 2012 and granted the power to appoint a review team on request)

Of course the two arguments were contradictory. If an appointment based on request was already lawful then why the need to include it in amending legislation?

It also struck me as bizarre that a Minister of the Crown could argue that he could exercise a power based on a change to the law that had not yet been enacted. That was a fundamental breach of the rule of law.

All in all then, the appointment of the review team was ultra vires theinister’s powers and therefore completely unlawful.

Not a good start.

This is how the government release of the members of the review team described Greg Gent.

Greg Gent (Chair)

Greg Gent, of Ruawai, has considerable knowledge of the Kaipara area as a long-time resident, farmer and business owner. He is an experienced director and chair and is currently a director of the Southern Cross Healthcare Group and Chair of the Farmers Mutual Group. He is also a member of the Northland District Health Board. In 2012 Greg Gent was made an Officer of the New Zealand Order of Merit for his services to the dairy industry and corporate governance.

This is important not because of what it includes but what it does not include. More of that to come.

The pressure on the KDC
Greg Gent was quite forceful in his quest to remove the council and have commissioners appointed. Here is an old post of mine:

GREG GENT AND COUNCIL 26.08.12
Governance in Kaipara became an even bigger farce last week when Greg Gent, the Council's ex officio adviser, herded the wayward Councillors back on to the right track. Or so it seems.

…..And then Greg Gent was invited into the public excluded session to advise Councillors.

Greg Gent is part of the review team that was appointed by the Minister to advise Council on the future and to report to the Minister on Council's problems. I have criticised that appointment for being outside the Minister's powers and Greg Gent has acknowledged that.

Greg Gent had no place in the public excluded meeting of 23 August when Council had to make one of the most important decisions that it has been faced with. Councillors are governed by the LGA and they are the elected representatives of ratepayers who must act in the best interests of ratepayers. In making their decisions they are entitled to receive advice that is truly independent.

Greg Gent is the Minister's man. He and his team persuaded Councillors to appoint commissioners and it is his job to smooth the takeover by the commissioner. The Minister has made it clear that the Councillors would stay in office for a few weeks and adopt the LTP.

We do not know what Greg Gent's advice was to the Councillors in that secret meeting but we do know the outcome. We can only presume that he was persuasive in convincing most Councillors that both the annual plan and the LTP had to be adopted.

Even if that was not the case and Greg Gent was fair and balanced in his advice, the point is that he should not have been there. As the Minister's man he cannot be seen to be independent, and he more than anyone else should have been aware of that.

The fact that he was invited was irrelevant. He should have declined the invitation and perhaps suggested to Steve Ruru that it was his responsibility to ensure that the Councillors had independent and competent legal advice before making their important decisions.

The concern with getting rid of the councillors and appointing commissioners was the reaction of the two banks that the KDC owed money to. A report from interest.co.nz summed up the financial indebtedness:

The council's long awaited, just released annual report for the year to June 30, 2011 shows total debt of just under NZ$82.9 million. Of this NZ$75.9 million is through bank loans. A council spokeswoman told interest.co.nz ANZ holds about NZ$52 million to NZ$53 million of this, with the balance - NZ$22 million to NZ$23 million - with BNZ.  (my emphasis)

Council had already breached the conditions of both loans. The failure to adopt the LTP and the appointment of commissioners were both default events. That meant that the banks could call up the loans immediately. Effectively receivership was looming large and the banks were at serious risk of losing some of their money. The only way out for the banks was for the LTP to be adopted and the commissioners could then take over.

Those of us who witnessed the Council meeting when pressure was exerted on the councillors to adopt the LTP were amazed at the forceful role played by Greg Gent. The Kaipara Lifestyler reported it under “Dramatic Demise of KDC” with the comment:

Both [the DIA and auditors] steered away from offering ‘legal advice’ and it was left to Mr Gent to advise council that there would not be a bailout by central government.

“If we don’t adopt the LTP the community will be brought to its knees, council will default with the banks, there will be delays to contracts of central services — it would be Armageddon,” he said.

This is how the late Bill Guest saw it in his Lifestyler column

The disgraced Kaipara District Council was told at its final meeting that if it did not adopt the Long Term Community Plan, the Kaipara district and its people would be facing ‘Armageddon'

With this message from the Review Team chair, Greg Gent, the council then adopted the Plan by majority vote.

I reported the matter myself on this website as follows:

CYNICAL MANIPULATION 30.08.12
At yesterday's Council meeting a large crowd of ratepayers was witness to a display of cynical manipulation when the grey suits shepherded and pressured the Councillors into adopting the annual report and the LTP.

The grey suits were led by Greg Gent the head of the Minister's review team who had been given clear instructions to ensure that the LTP was adopted and in place prior to the commissioners' arrival.

Greg Gent was backed up by more suits from the Department of Internal Affairs whose only role seemed to be to increase the pressure on Councillors.

Conflict of interest.
It was presumed at the time that Greg Gent was acting solely on behalf of the government in bringing pressure to bear on the councillors.

However, it turned out that this was not quite the case.

In 2013 I discovered that at the times of all these events Greg Gent was the chairman of BNZ partners Northland. This was the bank that the KDC owed money to and the bank that was seriously at risk if the KDC collapsed.

This involvement with one of the KDC’s banks, a bank whose loan was seriously at risk, cast a different light on Greg Gent’s role in the whole saga.

His role in the bank was not revealed in the CV that was released by the government when he was appointed chair of the review team, and Greg Gent did not publicly disclose the clear conflict of interest to the councillors or to anyone else.

His involvement with the BNZ had been reported earlier in the press. In 2011 the Lifestyler reported

After announcing his decision in May, Ruawai farmer Greg Gent stepped down this month after 10 years service on Fonterra’s Board of Directors, and will take up a new role on the board of the BNZ, where he will serve as the Regional Chairman, Northland.

http://www.kaiparalifestyler.co.nz/Search.cfm?NewsID=4563

And in June 2012 the Lifestyler announced the gong awarded to Greg Gent in the Queen’s Birthday Honours noting that amongst other appointments he was

chairman of BNZ Partners Northern

It is also interesting that his involvement with the BNZ in this role has not been included in any of his subsequent CVs.

It should also be noted that the letter of waiver from the BNZ (dated 27 August 2912) advising that it would not call up the KDC loan if commissioners were appointed was signed on behalf of BNZ Partners Northland.

It is not known if Greg Gent still retains a position with the BNZ.

The Mangawhai Focus has recently published two letters to the editor which relate to this issue, with the later one asking Greg Gent to reveal if his still involved with the BNZ

The letters can be seen here and here.

The issue
Greg Gent’s role in these events was clearly conflicted because he failed to reveal that he was associated with the very bank that stood to suffer financially if commissioners were not appointed and if the LTP was not adopted.

Many ratepayers will not even understand the issues involved here. They will not care. It is in the past and of no consequence. The outcome justified the means.

But to many, especially those who want to ensure that we elect the right Mayor, it is one of the question marks hanging over the head of Greg Gent.

If he stands by his record of corporate governance then he needs to front up and explain to the electors his role in these events aand why he failed to diclose the blatant conflict of interest.

THE GOVERNMENT’S MAN?

The commissioners were appointed by the government and are driven by the interests of John Key’s government, by Big Business and what I term to be the “trough-feeders”.

We are not shot of them yet because one of the three, Peter Winder, has been appointed to be the Crown Manager with, supposedly, total control over a large part of what should be the new council’s responsibilities.

We do not know who the Crown Observer will be but there is no doubt that it will be someone who will do the government’s bidding.

The chief executive recently appointed by the commissioners has no experience in local government and Greg Gent has already made it clear at the Mangawhai candidates meeting that he will be shown his place very quickly if Greg Gent becomes Mayor. He will do what he is told.

So, is Greg Gent his own man or is he the government’s way of getting total control over the Kaipara council? With the Crown Observer, Crown Manager and Mayor all flying John Key’s flag there would be very little room left for the best interests of ratepayers.

Greg Gent’s past concerns me. He has a record of being the government’s man. He was appointed to head the Kaipara review team, as already commented on. He was appointed by the Minister of Health to the Northland Regional Health Board. He worked with Helen Clark in respect of setting up Fonterra and went to India with John Key to negotiate a free-trade agreement.

He moves in government’s circles and could be seen as one of the government’s “go to” men.

His review team report included some gems of advice for the future management of Kaipara following the debacle of the Tiller council. He said:

Restoring this relationship between the Council and the community is fundamental to addressing the problems the Council is facing. It is arguable that no solutions to any of the Council’s problems, regardless of how technically sound they are, will be tenable unless there is buy in from the community.

All good stuff.  Integrity, community engagement consultation, compliance with the law and all the good governace principles.

But, of course it never happened. Once they were in power the commissioners wasted no time in revoking the previous council’s arrangement for the rates issues to be resolved jointly between the council and ratepayers.  They resolved to promote a validation bill to retrospectively validate all the rating errors..No consultation at all.

The relevant point here is that at the time Greg Gent went public and endorsed the commissioners’ actions in a letter  published in the Lifestyler.  He praised the true leadership of local MP Mike Sabin and suggested that the validation procedure would follow a full democtratic process.

The so-called democratic process turned out to be complete farce.

What Greg Gent failed to take into account in publicly endorsing the commissioners' actions is that they failed to comply with their statutory obligations to consult with ratepayers before making any decision on the matter. 

He also expressed  no concern in respect of the commissioners' surprise and unannounced revocation of the KDC's earlier resolution that it would resolve the rating issues jointly and co-operatively with ratepayers.

Clearly the commissioners' failure to act  with integriy, transparency, and in compliance with the law, was not a consideration for him

In other words, good governance was irrelevant.

All of this concerns me hugely. If the government says jump, will he jump. Will he do as he is told? Or .... will he apply the principles of good governance? Will he act transparently in the best interests of ratepayers, pursuant to the requirements of the LGA, and in compliance with the law?

Big battles are looming if the government continues on its present course. The powers granted to the Crown Manager under his terms of reference are unlawful. The Minister does not have the legal power to enable the Crown Manager to manage and make decisions. Those are the sole responsibility of the elected council. A Crown Manager can only have the power to direct the council.

Is Greg Gent going to make an issue of the illegal powers of the Crown Manager?

Even if those powers are modified so they are lawful, is he going to urge his council to rubber stamp directions from the Crown Manager even if they are clearly against the best interests of ratepayers, or against the law?

We expect Duffy J’s judgment soon and that may well declare that all the rates assessment and rates invoices issued by the KDC and the NRC are unlawful. Is Greg Gent going to work with the government to nullify the High Court decision or is he going to acknowledge the illegality and work with ratepayer groups to resolve the issues reasonably and fairly?

Another legal issue. The Tiller council and the commissioner’s both operated under advice from Simpson Grierson that it is a fundamental principle of administrative law that any council decision and action is deemed lawful until a court decides otherwise. This gave the council the ability to flout the law at will.

The misuse of the law in such a way is a fundamental issue. Effectively a council’s accountability to ratepayers set out in the legislation is completely nullified.

We want a Mayor and councillors who will apply the law as it is written and not abuse the rule of law by adopting some perverted meaning that can only be challenged in the courts.

Finally, on this issue, we also need to know whether Greg Gent had any communication with the government via Louise Upston or the Minister or any government representative about the deferment of the return of democracy, and whether he signed the petition to defer democracy.

Louise Upston had meetings with selected sympathetic supporters about both of this matter and we need to know if Greg Gent was one of them.

He also needs to be upfront in respect of any communication with any representative member of the National government or National Party about the nomination of candidates for this upcoming election.

BIG BUSINESS

Greg Gent is a corporate man. His CV oozes Big Business. He lives in the corporate world and he mixes with those in the corporate world. He started work with the BNZ and later, as we have seen, became chairman of BNZ Partners Northland. One of his business colleagues has a high positon in the BNZ.  He is or was on the Board or Chairman of a Health Boards, an Insurance Companies, Health Providers, farming groups etc.

This is Greg Gent’s CV taken from the Southern Cross website:

Mr. Gregory William Gent, also known as Greg, ONZM, serves as Senior Commercial Director at Kaipara. Mr. Gent is a Northland dairy farmer with a wealth of governance experience. Mr. Gent serves as the Chairman of Farmers' Mutual Group and Pengxin New Zealand Farm Management Limited. He has been Chairman of Dairy Holdings Limited since January 20, 2016. He serves as an Independent Chairman of Milk New Zealand Dairy Limited. He has been Chairman of Southern Cross Health Trust since 2014. He has been the Chairman of The Southern Cross Medical Care Society since December 04, 2014 and Southern Cross Benefits Ltd., December 05, 2014. He served as the Chairman of Northland Dairy and KiwiCo-op Dairies. He has extensive experience in the rural sector, along with a dairy farmer, he has held several directorships and chairmanships within the dairy industry. He began his career working for the Bank of New Zealand in 1972. After five years he made the move into dairying, with 700 cows on his farm at Ruawai, Northland. He has been Chairman of Advisory board of Milk New Zealand Dairy Limited since July 2016. Mr. Gent serves as a Deputy Chair at The New Zealand Institute for Plant and Food Research Limited. He has been a Trustee of Southern Cross health trust since December 2011. He also serves as a Director of FMG Insurance, Agri Private Capital Fund, The New Zealand Institute for Plant & Food Research Limited and Rugby World Cup (Northland) Ltd. He has been a Director of Southern Cross Healthcare Limited and The Southern Cross Medical Care Society since December 6, 2012. Mr. Gent served as a Director of Northland District Health Board from 2010 to mid-2015. He served as a Director of Fonterra Co-operative Group Ltd. from 1993 to November 17, 2011. From 2001 to 2011, he served as a Director of New Zealand's largest co-operative business, Fonterra. In 2002, he completed the Advanced Management Programme at INSEAD, France.

Naturally he is closely associated with these businesses and organisations, and it follows that he must endorse the policies and aspirations of these organisations and the people who work within them.

To me there is a huge potential for many conflicts of interests for a Mayor of a small community.

Kaipara has been ripped apart by the culture of Big Business and we now need a council that will focus on the best interests of people and carefully scrutinise each step that it takes. Our new council needs to stand firm against the government’s policy of using local government as a source of enrichment for Big Business.

I hate to quote the Auditor-General after all the damage she has done to Kaipara but this is taken from one of her reports on a conflict of interest situation in the Queenstown Lakes District Council:

Conflicts are inevitable in a small country and are not necessarily a problem if they are declared and properly managed.

Perception is of vital importance. Most often, what needs to be managed (and seen to be managed) is the risk of adverse public perception that could arise from overlapping interests. A conflict between a private interest and public duty can look wrong in the public’s mind, even if properly managed.

The Auditor-General sets out on her website how the risk of conflict of interest is assessed:

Is the decision likely to affect another organisation that the member has a role in?

If yes:

Is there a risk that the member will be seen to be acting in the interests of the other organisation rather than the Council?

If the member participates, is there a risk that they might breach obligations owed to the Council or the other organisation, such as a duty of loyalty or of confidentiality?

If yes, the member has a potential conflict of roles.

The problem is that Greg Gent is involved with so many organisations involved with a myriad of activities that could intersect with the KDC’s decision-making areas. That creates a potential for endless conflicts of interest that would have to be carefully managed. That means the Mayor standing down from any decision-making where there was a potential conflict of interest..

Take banking for instance.

Any challenge to the legality of the rates is going to put at risk the security for the loans of the KDC’s banks.  The loans are secured only against the rates.

Will Greg Gent act independently and consider the legal situation fairly or will he do what the commissioners have done by unashamedly throwing in their lot with the banks?

There is another historic problem that needs considering. The original KDC EcoCare loan from ABN Amro was sold off as a shonky debt when ABN Amro collapsed. It ended up with the ANZ and the BNZ who bought it, apparently, at a 40 per cent discount to face value in 2010.

The MRRA wanted to challenge the enforceability of the debt on the basis that the original lender acted in bad faith by deliberately entering into a financial arrangement that was patently unlawful and which the High Court subsequently declared to be unlawful. It did not therefore qualify as a protected transaction under the LGA. 

Unfortunately the MRRA were denied the opportunity to pursue that claim because of HIgh Court time constraints.  

Many ratepayers believe that the commissioners should have pursued the BNZ and the ANZ claiming that the loans were not protected.  An out of court settlement could have substantially reduced the burden of debt on ratepayers.

This may be an issue that the new council may want to investigate.

If such an issue does arise, and there is a conflict between the interests of ratepayers and the interests of the banks, where will Greg Gent’s loyalties lie?

FULL-TIME MAYOR?

Being a Mayor of a local authority is a fulltime job.

Greg Gent has so many directorships and other roles that it is hard to imagine that he can give the Mayoralty the time and attention that it demands.

Certainly he has indicated publicly that this is a problem and that he intends to “cut down” his other work commitments. But will he?

Take another look at his CV above and ask how he can possibly fit being a full-time Mayor into those commitments, as well as running his farms.

He suggested at a candidates meeting that he was going to train some of the councillors so that they will be able to perform some of his roles. That sounds ominous and many have expressed concern that he will be a part-time Mayor who will become a master of delegation.

So there you go. Over the past nine years I have seen all the promises and heard all the best intentions, but somehow the wheels came off and everything turned pear-shape.

The accountability of local authorities which is enshrined in legislation has been completely nullified by legal interpretation and the political bent of our judiciary.

Once our elected representatives are in power we have no way of challenging them or holding them accountable.

The only thing that we can do is to ensure, as best we can, that the candidates that we elect have the right qualifications and the personal attitudes for the Job.

It is not the Kiwi way to be so forward and to probe people so hard. But we can’t afford to make another mistake. We picked a fair amount of rotten apples last time and we don’t want make the same mistake again.

This may be a brutal exercise for candidates but representing ratepayers is an important job and the credentials, abilities and attitudes of candidates are on the line.

Any candidate worth his or her salt should be more than willing to open themselves up to such public scrutiny.

Greg Gent is an enigma and if he wants to be Mayor then he should respond to the concerns of ratepayers.

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