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Exclusive: New evidence shows Lee lied about NZ on Air funding

Written By: - Date published: 2:27 pm, December 6th, 2009 - 53 comments
Categories: melissa lee - Tags:

Newly uncovered correspondence between Melissa Lee and NZ on Air shows that she and her leader, John Key, seriously misled the media, the house and the public over the issue of her company’s misappropriation of $80,000 of NZ on Air funds.

Documents obtained by The Standard show Lee’s claim to media that she had no idea about the matter until 12th of October was false. (“Ms Lee said she was informed of the problem when a business partner forwarded her a letter last night”*, “NZ on Air sent a letter to my business partner which I have just received now”*) Lee was actually notified five months earlier on the 18th of May. Here’s the note from the NZ on Air file:

Spoke to Melissa Lee 16:45 18/5. She thought the amount coded to contingency was for overexpenditure in other codes. She will check with the previous production manager who has left the company.

The documents also confirm Lee’s first written reply on the issue was on the 22nd of June:

I just want to acknowledge the receipt of your letter dated June 12th. It was received by the Asia Downunder office on Friday and it was delivered to me today

And that she had acknowledged there was money to pay back on the 17th August (although this letter, supposedly sent the day before Broadcasting Minister Johnathan Coleman found out about the issue, wasn’t received by NZ on Air until August 24th):

I would like your guidance and advice on what [sic] and how we sort this error out.

After TV3 broke the story John Key’s response was to attack NZ on Air, telling Parliament:

Maybe that reflects badly on NZ On Air, which thinks that the way that it should respond to these things is by leaking them to the Labour Party, without having the courtesy of sending the letter in the first place to Melissa Lee.

But we now know that NZ on Air had notified Lee more than five months earlier. The information John Key provided to the House, whether intentional or not, is false.

Within hours of the TV3 airing, Lee’s company announced that they would pay the money back with Lee issuing a statement claiming it was “a technical accounting mistake” and that “This has come as a total surprise, the company wasn’t aware that the money set aside in the contingency was technically expected to be refunded.” The implication was that the “surprise” issue had only just come to her attention and she had moved quickly to fix it. We now know this is untrue. We also have no record of the money being refunded.

Timeline:

  • 12 May – Report on Lee’s company shows issues under investigation
  • 18 May – First telephone conversation between NZ on Air and Melissa Lee on the issue
  • 12 June – Lee contacted by NZ on Air and asked to explain
  • 13 June – Mt Albert by-election
  • 22 June – Lee replies via email to NZ on Air letter, promises action
  • 14 July – NZ on Air contact Lee asking her to report progress
  • 16 July – Lee replies she hasn’t had a chance to follow up
  • 12 August – NZ on Air make determination to tell Minister of Broadcasting Jonathan Coleman
  • 17 August – Lee finally gets back to TVNZ, says she can provide no further information about the misappropriated fund (received by NZ on Air, 24 August)
  • 18 August – Jonathan Coleman says he’s told of the problem by NZ on Air
  • 7 October – NZ on Air board agree Lee should pay back $80,000 of public money
  • 12 October – Asia Downunder sent letter demanding payment
  • 12 October – Letter demanding payment leaked and broadcast by TV3 News
  • 12 October – Lee says this is the first day she hears of the matter five months after she first talked to NZ on Air about it
  • 12 October 8:55pm – TV3 reports Lee will pay back the money
  • 13 October – Key repeats Lee’s story in House and attacks NZ on Air

This new information raises some serious questions. It’s clear from the documents that Lee lied to the media about her knowledge of the situation and it’s highly likely that, having known about the misappropriation of public funds for some time, she was only willing to pay the (taxpayers’) money back after it became a media story.

Further, John Key lied to Parliament the following day. I would have expected that before he took this up in the House he would have been briefed by Lee and told about how far back her knowledge of the issue went. The public deserve answers:

– What did Melissa Lee tell John Key about when she first knew of NZ on Air’s allegations?

– Did John Key make it up when he said NZ on Air had leaked the letter to Labour before telling Melissa Lee?

– Did Melissa Lee backdate her letter of 17 Aug, which wasn’t received by NZ on Air until August 24th? Jonathan Coleman says he was told of the problem by the chair of NZ on Air on August 18th.

– Why did Lee wait until the TV3 broadcast to pay back the money, when she indicated to NZ on Air several months earlier that she wanted to sort it out?

– Who was involved in the cover-up to keep the issue secret from the people of Mt Albert before the 13th June by-election?

– Lee, Key and Coleman each need to spell out in detail what they knew when.

– Will John Key apologise to Parliament for presenting misinformation on the matter during question time?

53 comments on “Exclusive: New evidence shows Lee lied about NZ on Air funding ”

  1. Gooner 1

    Gunning for Lee is like Brazil gunning for the All Whites at the World Cup.

    Pointless.

    • Tigger 1.1

      Because she’s an MP and we should all just accept their behaviour? Because she’s bulletproof and Key won’t dump her no matter how much dirt sticks to her? Because she’s a lady? Because she’s a nice person?

  2. prism 2

    Just shows. Not all the dodgy people live in South Auckland.

  3. Santi 3

    No need to worry. The lazy Prime Minister will do nothing about this transgression.
    He’s too busy flying around the world and smiling like there is no tomorrow.

    A pathetic man leading a pathetic National government.

  4. Tim Ellis 4

    On a desperation scale this post scores pretty highly Eddie.

    • IrishBill 4.1

      That’s Mr Eddie to you, Tim. And you’re right, Lee’s actions certainly were desperate.

    • Eddie 4.2

      I’m less than taken back by your response, Tim. Have you got anything to say about the substance? The fact that Lee lied, the fact that Key at least repeated her lie, Coleman’s coverup?

    • andy 4.3

      Tim, I am glad your relaxed ™ about misleading the house and the people of New Zealand.

    • Draco T Bastard 4.4

      Evidence of outright corruption by ministers of the present government and you call it desperation on the part of the people bringing it to the public’s notice?

  5. Tim Ellis 6

    IB either I am on a losing battle for referring to people by their last name (which is my habit since childhood) or for referrring them by their first name when no last name is provided. A bit petty if you ask me.

    Documents obtained by The Standard show Lee’s claim to media that she had no idea about the matter until 12th of October was false. Lee was actually notified five months earlier on the 18th of May. Here’s the note from the NZ on Air file:

    There was no claim to the media that Ms Lee knew nothing about the matter until 12th October. It is clear from the correspondence that from the initial inquiry an amount was in dispute. There is no evidence that Ms Lee knew how much was in dispute until 12 October.

    Another beat up from somebody who seems obsessed with Ms Lee.

    • Eddie 6.1

      Tim. The old distraction tactics are looking pretty desperate.

      There’s no obsession with Lee. We last posted on her in October when this issue was last in the news.

      “There was no claim to the media that Ms Lee knew nothing about the matter until 12th October”

      Yes there was. I have two quotes: http://www.radionz.co.nz/audio/national/mnr/2009/10/13/asia_downunder_moves_to_correct_accounting_error and http://www.nbr.co.nz/article/pm-stands-lee-over-funding-row-113108

      Still comfortable with Lee lying along with Coleman and Key?

      • Tim Ellis 6.1.1

        No evidence of lying in any of those quotes Eddie. What there is evidence of is a long series of inquiries into AV by NZOA on some pretty technical accounting issues that were in dispute by the two parties. If you’ve ever been through a financial audit you will know this is pretty common, and mistakes of interpretation happen all the time.

        There is no evidence that Ms Lee knew how much was in dispute at the time of the 18 May discussion, or the extent of the problem.

        So yes, pretty desperate on your part. As for whether you are obsessed with Ms Lee your cat calling at the time of the by election shows otherwise.

        • Eddie 6.1.1.1

          “cat calling” what an odd term to use.

          do you mean that we had posts on lee’s frequent pratfalls and her inability to control her temper? Because, you know, they were pretty major news. Maybe Guyon and Duncan were cat calling too?

          gee, Tim. you’re really not doing well today.

        • Chris C 6.1.1.2

          “If you’ve ever been through a financial audit you will know this is pretty common, and mistakes of interpretation happen all the time.”

          No they don’t. There are no “mistakes of interpretation”, because an audit sets the terms of interpreting the accounts. That’s what an audit is for – to define the terms by which financial peformances and accounting methods will be judged. There is no interpretation except what the auditors interpret it as. That’s why we have GAAP and IFRS.

          If someone uses the term “mistakes of interpretation”, then an auditor’s ears will prick up. Interpretation isn’t a word often used in an audit.

  6. Irascible 7

    I’d argue that this demonstrates yet another example of arrogance allowing the NACT MPs to believe that their inbuilt natural tendency to exploit the taxpayer (also called corruption) is an acceptable practice in public life.

  7. Eddie 8

    Tim: “No evidence of lying in any of those quotes Eddie”

    umm,

    “Ms Lee said she was informed of the problem when a business partner forwarded her a letter last night.”

    • Tim Ellis 8.1

      Eddie please point out where in the correspondence it says that NZOA had investigated and found that there was an accounting error relating to $80,000 of incorrectly attributed expenditure, and where it was acknowledged in the earlier correspondence that Ms Lee knew of this.

  8. Eddie 9

    all in the post, of course but here, again, is the correspondence on misuse of the contingency fund, which Lee later said she only learned of on 12 October. 18th May, to Lee: http://www.thestandard.org.nz/wp-content/uploads/2009/12/File-note.jpg . 22 June, from Lee: http://www.thestandard.org.nz/wp-content/uploads/2009/12/First-Lee-email.jpg

    • Tim Ellis 9.1

      The correspondence shows nothing of the kind Eddie.

      The call on 18 May shows a “please explain how you decided on this” conversation, the same kind that accountants have with their clients when reviewing financial information all the time. There is no evidence that NZOA reached a judgement on the matter until much later and no evidence that Ms Lee knew about the judgement until 12 October.

      Please show where in any of the correspondence prior to 7 October it shows that NZOA had reached a decision on what to be refunded Eddie. You will have to do better than posting links with vague assumptions of your own.

      • IrishBill 9.1.1

        I don’t think it’s a vague assumption at all. Lee clearly says tells the media she was not aware of the problem until the 12th of October but she had actually been in correspondence with NZ on Air about the problem since May.

        • Tim Ellis 9.1.1.1

          Yes you might come to that conclusion IB if you started with the assumption that Ms Lee was dishonest and set out to misappropriate money, which was Eddie’s contention going right back to his original claim that Ms Lee misappropriated NZOA money to spend on political advertising (which NZOA investigated and found there was no substance to the claim).

          But as with all auditing or reviews of company or organisational accounting, the first thing to happen will be NZOA asks for a set of accounts, then questions the directors on the assumptions they used in preparing the accounts, and then reaches a conclusion on the validity of those assumptions.

          The file note of 18 May shows that NZOA was inquring into the assumptions made by AV in preparing the accounts. To describe such questining as an allegation of impropriety shows that Eddie is either being dishonest or ignorant about how auditing works.

          The assumptions that Ms Lee’s company made with regard to the transfer to the continegency line survived both standard audit and presumably ongoing annual review of accounts by NZOA going back several years. NZOA reached a view on 7 October that the interpretation that AV had been applying with respect to the contingency line item was incorrect.

          There is no evidence at all that Ms Lee knew what the outcome of NZOA’s queries were, how much was in dispute, or even whether the decision of NZOA’s board would be that AV’s intepretation of the use of the contingency fund was incorrect, until after the Board reached its determination on 7 October.

          Eddie further says:

          And that she had acknowledged there was money to pay back on the 17th August

          Ms Lee’s letter of 17 August makes no such acknowledgement. It makes an offer to change AV’s budgeting process so that the use of the contingency line item is not used in future, and asks NZOA for guidance on the next stage.

          There is no evidence in any of the correspondence that Ms Lee was aware that NZOA would determine that AV’s budgeting process was incorrect, that money would need to be repaid, or how much money was involved until after the 7 October board decision.

          Nowhere in the media did Ms Lee deny having any conversations with NZOA, as Eddie has claimed. Clearly she was in discussions, but she did not know the outcome of those discussions until NZOA reached its determination.

          • Eddie 9.1.1.1.1

            she claimed not to be aware of the issue. the papers prove otherwise.

          • andy 9.1.1.1.2

            Tim, when an external auditor has a ‘please explain’ question, alarm bells should ring. Especially when you are receiving public funds, one should be aware that there is a certain sensitivity surrounding it (twilight golf anyone?).

            Lee and Co should have been on amber alert, this is not your accountant asking why you accidentally coded an expense as non taxable instead of taxable. This is a ‘this looks dodgy, you better have a good explanation, cause if you don’t…..’ type of question.

            Good try, external auditors are very very serious and can have a huge impact on future funding, but you should know that.

          • Rex Widerstrom 9.1.1.1.3

            Good grief. A small part of what I do involves making TV with a production company in which I have an interest.

            A very small part of that involves public money. If the public funder said “we’re going to audit you” (as opposed to the usual process of simply requiring you to account for your expenditure, which is an entirely different matter) I’d s**t my pants.

            In my experience (and I should state I’ve had no dealings with NZOA so this may not apply to them) public funders tend to be quite relaxed in their dealings with production companies with whom they’ve had a pre-existing relationship.

            So relaxed, in fact, it annoys me because they tend to shut out newcomers and fund existing providers to produce what often turns out to be second rate material.

            So for one to trot out the possibility of an audit could not fail to cause alarm at a production company.

            To spin this as her thinking they needed to recode their contingency funds or somesuch minor accounting issue is disingenuous.

            If alarm bells didn’t go off in May, or maybe early June at the very latest then Lee and her comrades are so breathtakingly dim that they should never have been deemed suitable to receive the money in the first place.

  9. Eddie 10

    “Please show where in any of the correspondence prior to 7 October it shows that NZOA had reached a decision on what to be refunded Eddie.”

    Not relevant. Lee clearly claimed not to know of the issue,it’s not a matter of whether the decision had been made, it’s whether she knew there was a problem.

    “Ms Lee said she was informed of the problem when a business partner forwarded her a letter last night”,

    “NZ on Air sent a letter to my business partner which I have just received now’

  10. Eric C. 11

    Excellent work Eddie.

    If you need further evidence that Lee was telling porkies read this from http://www.parliament.govt.nz :

    Question for Written Answer

    “15491 (2009). Hon Pete Hodgson to the Prime Minister (19 Oct 2009): Was it a member of his staff who informed him that NZ on Air had leaked information about their investigations into Melissa Lee’s company; if not, who did inform him that New Zealand on Air was the source of the leak?

    Hon John Key (Prime Minister) replied: Melissa Lee.”

    Key was rubbished by the media for his claim that NZ on Air leaked the letter and here he himself tells us he got that advice from Melissa Lee.

    Key bought her story lock, stock and barrel and repeated it in parliament. How stupid is that?

  11. Anne 12

    Any chance of banning T Ellis permanently? I look forward to intelligent and enlightened debate on this site and I’m sick of that troll’s attempts to hijack the posts. I’m not the only person who is being turned off from reading the comments because of that ignorant prat.

    • Tim Ellis 12.1

      I’m sorry if you’re offended Anne, but I didn’t realise that directly discussing the claims made in a post constitute “hijacking” it.

    • gitmo 12.2

      “I look forward to intelligent and enlightened debate on this site ”

      Really ? I thought most people came here for partisan hackery or a bit a verbal bif.

      • mickysavage 12.2.1

        I think that Tim does us a service. We get to know the National attack and defend lines even before they are trotted out in the MSM. Keep it up Tim, good work.

  12. dave 13

    unfortunately, this doesn’t actually meet the “so what” test. Therefore no serious questions are raised.

    • Eric C. 13.1

      An MP misleading her leader and her leader being stupid enough to repeat that misleading advice shows a lack of judgement in both MP and leader.

      I guess you can say, “So what,” but some expect more from their leaders.

      • IrishBill 13.1.1

        To be fair it’s only public funds and lying to the house, it’s not like she was driven through Temuka really fast or signed a painting for charity. Now that would be a big deal.

      • andy 13.1.2

        It meets the “Worth” test for sacking. What ever that was 🙂

  13. Eddie 14

    yeah, an MP, a minister, and a prime minister misleading the public over an investigation into the misuse of public funds. So what?

    • Rex Widerstrom 14.1

      FWIW I can see parallels between this and situation Winston was in in 1996 with Michael Laws and his company’s receipt of public money for “polling” in Hawkes Bay.

      The leader cannot know for sure what happened* and is thus forced to rely on the MP’s version of events. You have no choice but to figure the MP wouldn’t be reckless enough to take you (and possibly the party) down with them by compounding whatever misdemeanour they’d committed by lying.

      So you grit your teeth and stand up in Parliament, blinking the sweat out of your eyes and trying to keep your sphincter clenched, and repeat the story you’ve been told, all the while suspecting that the little toad is just using you as a human shield.

      One could argue that Leader ought to have gone with his instinct and jettisoned the rat before it gnawed a hole in the side of the ship, but then you’d be accused of dictatorial behaviour and disloyalty.

      The sad fact is, you should never have hand picked that particular rodent. But by then it’s too late.

      * Though of course Winston pretty much did know, since I went to Hawkes Bay and investigated the incident, then reported to him.

      But alas a complete numpty from ACT to whom I’d spoken decided it was better to big note himself to the media than to let matters run their course, and Winston felt he had to stand by his newly minted MP, hoping it was he and not I who was telling the truth.

      Thus the haemorrhaging continued for months, until a “principled” resignation was finally extracted.

      Perhaps we’re in for a few months of Lee haemorrhaging till she too resigns. Well done The Standard for this admirable bit of investigative journalism, BTW.

  14. Anne 15

    Offended by you Timmy boy? That’s a joke. If you had a sense of humour you would be tolerable. Why don’t you go get your kicks elsewhere… somewhere far, far away. I’m sure there are people at this site who would be delighted to assist you find another outlet for your energies.

    .

  15. Steve 16

    What is a Kangaroo Court? Seems to be a lot of insulting by todays Standard Judges?
    Oh sorry, I asked two questions, please do not get confused

  16. Doug 17

    On Red Alert
    Idiot/Savant says:

    December 6, 2009 at 9:55 pm
    or whether he has the backbone to sack her.

    Sack her from what? She’s not in Cabinet, she’s just an MP. And the Prime Minister doesn’t get to sack them.

    Poor old Trevor Malard.

    • Zorr 17.1

      She is a List MP. She wasn’t personally elected to the position she currently holds and has been sworn in to Parliament as selected by National as a result of voting, not by the voting of an electorate for her. So she can actually be sacked and replaced without subverting the democratic process.

    • lprent 17.2

      Does raise an interesting question about list MPs.

      I’ll take a bet that National has some clauses about behaviour. If they dump her from the party, then I think that there is waka jumping legislation? After all she is an MP because of the national list. The Nats would be out one MP.

      The National story is that she claimed something to the PM that is contradicted by the facts. That has got to be bad behavior.

      • Tim Ellis 17.2.1

        The National story is that she claimed something to the PM that is contradicted by the facts. That has got to be bad behavior.

        Where did you get this LP?

  17. Personally, I’m finding Tim Ellis’s rationalisations hugely entertaining.

  18. Tigger 19

    Personally it’s a lot like watching a small dog doing tricks – amusing after a while but ultimately you just want it to stop yapping.

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