The “C” word

Yesterday I wrote about the Key/Joyce/Eagleson/SkyCity debacle. ?I ended the article with


Turns out that corporate shill Matthew Hooton is quite happy to use the C word today


The origins of this fiasco lie in the close private relationship established between John Key and SkyCity in the mid 2000s.? When he became prime minister, Mr Key surprised many when he appointed himself minister of tourism but it was old news to SkyCity. Its executives had advised business partners well before election day that things were looking up because Mr Key had ?agreed? to become tourism minister.

This, along with Mr Key?s ill-fated ?Jobs Summit,? meant Wellington began seeing convention centres as The Next Big Thing.

Mr Key?s staff and officials rushed around with proposals for bigger and better convention centres in various centres.? With casino monopolies in Auckland and Queenstown, SkyCity was thrilled.

In cabinet papers, the government told itself a big centre ?has the potential to deliver considerable economic benefits to New Zealand.?? Ministers did not risk consulting the Treasury on this point.? It was merely ?informed? of what was going on.? No cost-benefit analysis was carried out and for very good reason: It was politics and political friendships driving the demand for convention centres, not economics.

The procurement process for the Auckland centre was a farce and as close to corruption as we ever see in New Zealand.

As reported by the Deputy Auditor-General, Mr Eagleson ? whose best friend and Las Vegas gambling buddy is Mark Unsworth, SkyCity?s Wellington lobbyist ? had been conducting private talks with SkyCity through 2009 and early 2010, including about what regulatory relief SkyCity wanted.

Mr Eagleson argued a procurement process was unnecessary and that the government should just go with SkyCity on the grounds no one else could realistically compete.

He was overruled by ministers and an Expression of Interest (EOI) document was issued, but without clear evaluation criteria.? Unusually, and without further elaboration to those not privy to the prime minister?s private talks with SkyCity, the EOI said that ?alternative and creative funding options? would be considered.

It turned out that private talks with SkyCity continued in parallel to the formal process.? As far as is known, no other bidder was told gambling licences were on the table. The Deputy Auditor-General later slammed the process as flawed: ?From the start of the evaluation process, the contact with one proposer was of a wholly different nature from the contact with others. In our view, officials effectively worked with SkyCity for some months, giving detailed feedback and engaging in some preliminary negotiations, while the other proposers were kept on hold and given very little information.?

When ministers have allowed the Treasury to analyse the proposal, it has expressed concern that ?private benefits to SkyCity will exceed public benefit to New Zealanders? and that ?the Crown currently lacks adequate leverage in the negotiations.?

Hooton just stops short of calling The SkyCity Convention Centre deal “corruption”. ?I think we -the public- are missing a vital piece of information that allows us to say so and not end up in court. ? It is this vital piece of information that actually makes all of Key’s and Joyce’s strange?statements and positions surrounding this issue suddenly make sense.

There is something the public hasn’t been told yet. ? And I have this feeling it’s going to pop out very soon. ?The only way Key and Joyce think they can make this go away is by coughing up the money. ?But I should point them at history – whatever you are trying to avoid will come out anyway.

It always does.