The secret seven | Auckland News | Local News in Auckland

Behind closed doors, Rodney Hide chose who'll run our city. John Landrigan asked him: how?

Criticism of appointments to the boards of Auckland's seven council-controlled organisations is dismissed by Local Government Minister Rodney Hide.

Labour spokesman Phil Twyford says: "Apart from Sir Don McKinnon and Mayor Bob Harvey, most Aucklanders won't know who they are.

"And that is the point: these people will wield enormous power over local government in Auckland but they've been selected in secret by the Minister, without Aucklanders having a say."

The Business Herald has drawn attention to the tangle of company affiliations within the various boards, and the process used by Mr Hide was expressly warned against in the Royal Commission into Auckland local government's report.

Mr Hide was flying to Napier to address the Institute of Animal Control Officers when The Aucklander rang to ask about the process. He was terse over the phone, curt and determined to say just one thing: the people appointed to the CCO boards, to run 75 per cent of Auckland's assets, are the best people for the job, have integrity and should not be questioned.

He repeated this comment when The Aucklander rang him back after his flight to ask why the process contravened the Royal Commission recommendation. The view of the Royal Commission, set up by the then Labour-led Government to investigate and recommend local and regional government arrangements for Auckland, is set out below. It demanded procedures to "prohibit from [CCO] board appointments officers or employees of principal contractors, licensees, or franchise holders to the company."

Leading appointees announced last week by Mr Hide include directors and management from "principal contractors" such as Hawkins Construction, Downer EDi, Simpson Grierson, Beca Group and Sea+City Projects (the waterfront development).

Mr Hide says the board members will operate in the same environment as elected councillors. "Conflict of interest will always arise with councillors, board members and ministers."

He also notes 11 of the 31 appointees belong to existing CCOs.

Pressed further, he justifies the process by citing a 2008 Appeal Court case between Labtests Auckland and Diagnostic Medlabs.

The High Court review found the contracting process was unfair to Diagnostic Medlabs because Labtests' then-chief executive Dr Tony Bierre was also an Auckland District Health board member and had inside knowledge. It was overturned. Mr Hide says this case justifies his decision to make the appointments.

Mr Twyford also directs criticism at the appointment of Auckland Transition Agency head Mark Ford as chairman of the largest and, arguably, the most important, of the CCOs - Auckland Transport.

Mr Twyford says it's not right for the executive chairman of the agency designing the council, and overseer of the appointment process for directors, to end up with the most powerful job.

Mr Ford, who is highly regarded after leadership roles in business and as chief executive of Watercare Services and chair of the Auckland Regional Transport Agency, will be responsible for everything from major arterial roads to the location of bus stops.

In 2009, Mr Ford signed off guidelines for the transport body and outlined plans to minimise management tiers to ensure "decision-making is at the appropriate level of the structure and that management roles are significant and meaningful with appropriate spans of control".

The Aucklander sought his comment but he declined.

It's not just Mr Ford who has picked up a new job. Fellow ATA board member Miriam Dean has been appointed a director of Auckland Council Investments and another board member, John Law, will be a director of Auckland Tourism, Events and Economic Development.

The 50 appointees earn a combined income of around $2.3 million a year. The 21 elected councillors receive a combined $1.84 million.

This week, candidates continue to knock on doors, canvass malls and shuffle for billboard sites to win election to one of only 21 council spots. Those in direct charge of 75 per cent of our assets have been chosen behind closed doors.

Auckland Transport: Chairman Mark Ford, deputy chair Philippa Dunphy. Directors Rabin Rabindran, Dr Ian Parton and Paul Lockey.

Auckland Waterfront Development Agency: Chairman Bob Harvey, deputy chair Adrienne Young Cooper. Directors Kerry Stotter, Ngarimu Blair and Terry Kayes.

Auckland Council Property: Chairman Sir John Wells, deputy chair Richard Aitken. Directors Anne Blackburn, Peter Wall and Tuku Morgan.

Regional Facilities Auckland: Chairman Sir Don McKinnon, deputy chair Dame Jenny Gibbs. Directors Hugh Burrett, Peter Stubbs, Derek Dallow and Rukumoana Tira Marie Schaafhausen.

Auckland Tourism, Events and Economic Development: Chairman Dave McConnell, deputy chair Peter Drummond. Directors Norm Thompson, John Law and Vivien Bridgewater.

Auckland Council Investment: Chairman Simon Allen, deputy chair Miriam Dean, QC. Director Candis Craven.

Watercare Services: Chairman Graeme Hawkins, deputy chairman Pat Snedden. Directors Susan Huria, Jeff Todd, David Clarke, Peter Drummond and Ross Keenan. (Watercare is an existing CCO, the current board carries over.)

Interested parties

The Royal Commission on Auckland local government foresaw the problem of directors with business ties. The commissioners wrote:

The directors and the chairs of [CCO] boards would be appointed by the Auckland Council on the recommendation of the appropriate council committee, with advice from the independent appointments advisory panel. The selection process should thus be closely modelled on that used by the Crown Company Monitoring Advisory Unit for the appointment of SOE directors.

A footnote says:

This governance protocol would also prohibit from board appointments officers or employees of principal contractors, licensees, or franchise holders to the company.

Like most of the Royal Commission's recommendations, Rodney Hide ignored it.