Pokies and corruption?

Written By: karol - Date published: 10:15 am, March 31st, 2013 - 61 comments
Categories: accountability, capitalism, corruption, crime, democracy under attack, greens, same old national - Tags: pokies, problem gambling foundation

How deep does it go?

Steve Kilgallon, in today’s Stuff, is reporting that evidence of wrong doing by Pokie trusts, presented to Internal Affairs mysteriously went missing. The article, perhaps necessarily because of lack of evidence, provides the most positive slant on the disappearance, putting it down to sloppiness.

Internal Affairs investigators lost a vital file in their own office for nearly two years – and delivered a report on the allegations it contained by incorrectly guessing at its contents….

Legge handed over thousands of documents between September and November 2010 that provided a series of revelations about his former employer, Trusts Charitable Foundation (now Trusts Community Foundation).

In June 2012, dismayed at the department’s failure to act on his information, Legge asked for their return. Documents released under the Official Information Act show the request prompted a scramble in the department to find one particular file.

The query bounced around seven staff and one email simply said: “So where is the file?”

When it was found, the original investigator, David Bermingham, who was removed from the case in late 2010, was flown from Christchurch to Wellington solely to confirm it was the right one. “It was like they had just found it on someone’s desk,” Bermingham told the Sunday Star-Times.

Bermingham said he had long suspected the file was missing. “It became evidently clear that they didn’t have the file . . . I’m very confused how they were able to conduct an investigation without that file, certainly not a thorough one.”

It is all a bit murky. But back in November 2010 shortly after the investigation began, Graeme Ramsey of the Problem Gambling Foundation predicted there was more evidence of abuse of the funding of Pokies trusts to come.

Graeme Ramsey, Problem Gambling Foundation CEO, says this will address the issue of the blatant misuse of pokie money by people held in positions of trust that is rife in New Zealand.

“Year after year, the number of cases involving the misuse of pokie funds is outstanding. People who are trusted with the distribution of large sums of public money continue to flout the law, and it is the community that is deprived of valuable funding for worthy causes,” he says.

Graeme Ramsey says there are around 50 pokie trusts operating in New Zealand and anyone can set them up.

“This makes monitoring extremely difficult and, as we have seen from the frequent stories in the media, leaves the system open to abuse,” he says….

Graeme Ramsey says there are too many ‘snouts in the trough’ of public money and enough is enough.

“We have seen cases this year where large sums of public money have been spent on entertainment for trustees, refurbishment of venues, and other payments that the Secretary of Internal Affairs described as inappropriate and unlawful,” he says.

Graeme Ramsey says this certainly won’t be the last time we hear of the misappropriation of pokie funds by trustees as there is more to come.

It seems like some in the pokie industry have a lot of influence and a long reach. Some in this industry benefited from John Key and Steven Joyce’s SkyCity convention centre deal. The deal was made through flawed processes, as argued by the Green Party:

The pokies-for-convention centre deal should be scrapped after the Deputy Auditor General confirmed minsters did wrong over the deal, and were not completely vindicated as the Prime Minister has claimed, the Green Party said today.

“Deputy Auditor General Phillippa Smith today confirmed to a select committee that she found Government ministers at fault in her damning inquiry into the SkyCity deal, contradicting John Key’s claims that the report “completely vindicated” his Government,” Green Party Co-leader Metiria Turei said…

“Ms Smith confirmed that she found that both officials and Ministers had not followed good process in the Expressions of Interest process which she found favoured SkyCity right from the start.

“She confirmed that SkyCity was the least preferred of all the bidders for the convention centre at the start, and that it wasn’t till ministers staff and officials exclusively worked with the casino on their bid – including working up ideas to increase gambling opportunities – that SkyCity emerged at the end of the process the favoured option.

The end result of this flawed process was a deal that would include an increase in SkyCity pokie machines. Meanwhile, increasing numbers of children are left unattended around SkyCity’s gambling areas.

Significant International Affairs files going missing, deals made through flawed government processes.

So NZ is not a corrupt country, then, just one governed through sloppy processes?

Cui bono?

61 comments on “Pokies and corruption? ”

Comments are now closed

One Tāne Huna 1

31 March 2013 at 10:29 am

*Cui bono.

You didn’t touch on another aspect of Sky City’s core business: money laundering.
- karol 1.1
  
  31 March 2013 at 10:47 am
  
  Thanks, OTH. Corrected. I slipped into to the kind of hybrid Spanish that I often resorted to when hitch-hiking in Spain in my youth.
  
  Money laundering is a concern, but so much is allegation and lack of evidence,and my immediate concern was the disappearance of significant IA evidence. Thanks for the article link. The most significant bit re-solid evidence is the final sentence:
  
  A Department of Internal Affairs report shows the Ticket-In Ticket-Out machines make it easier to launder money.
  - One Tāne Huna 1.1.1
    
    31 March 2013 at 11:14 am
    
    Interesting, eh – that “lack of evidence” part.
    
    “You follow drugs, you get drug addicts and drug dealers. But you start to follow the money, and you don’t know where the fuck it’s gonna take you.”
    
    Lester Freamon. The Wire
  - Curran's Viper 1.1.2
    
    1 April 2013 at 11:09 am
    
    Err .. Karol, that’s Latin (as in the ancestors of ‘latino’, musica latina, fandango),
    
    http://en.wikipedia.org/wiki/Latin
    
    not Spanish .. aka Espanol ..
    
    To be a bit pedantic,
    “Cui bono” means “Who benefits ?”
    the first question to ask in any investigation.
    
    http://en.wikipedia.org/wiki/Spanish_language
    
    As for corruption, the only thing that’s new is the amount of money involved, a result of recent market “reforms”.
    - karol 1.1.2.1
      
      1 April 2013 at 11:39 am
      
      Yes, I know, Curran’sV. But when I was hitch-hiking in Southern Europe, any mix of languages could come out of my mouth in an attempt to converse with locals – especially as I moved from France to Spain (and had previously traveled on an Italian boat) -(qui/cui/bono/bien/bueno) – was all in the mix along with Latinised English. … followed by confused looks on the locals faces.
      - Curran's Viper 1.1.2.1.1
        
        1 April 2013 at 1:35 pm
        
        Hitch-hiking in Southern Europe .. on your own ? Brave. I found southern Europeans to be .. well .. like any other Europeans, friendly, sympatico ..
        
        karol 1.1.2.1.1.1
        
        1 April 2013 at 1:40 pm
        
        Not on my own, but with a friend. Though I did hitch-hike the length of England and into Scotland on my own – it was different times back then.
        
        Curran's Viper …
        
        1 April 2013 at 3:35 pm
        
        True, but human nature does not change ..
Anne 2

31 March 2013 at 11:18 am

A fantastic effort karol.

It will need further study before I fully understand the ramifications of what you have brought to light but one thing of which I am sure… New Zealand can no longer be described as a corruption-free country.

It may take a while before the international organisations (OECD?) that measure the extent of corruption catch up with it, but since the mid-1980s questionable practices in NZ have been gradually increasing. Since the advent of this government, I expect corrupt practices has doubled in intensity because the NActs have set such a deplorable standard with J Key’s secretive dirty dealing and the suspect ‘money merry-go-rounds’ that are being reported almost on a weekly basis.

When are ordinary NZers going to wake up to it?
- Draco T Bastard 2.1
  
  31 March 2013 at 11:53 am
  
  New Zealand can no longer be described as a corruption-free country.
  
  NZ has never been a corruption-free country – we’ve only perceived ourselves as that. Our perceptions have been wrong but, hopefully, cases like this will start wake people up to the fact that we have some work to do on this.
- prism 2.2
  
  31 March 2013 at 12:45 pm
  
  Anne
  ” New Zealand can no longer be described as a corruption-free country….
  When are ordinary NZers going to wake up to it?”
  
  When is sleeping beauty going to be kissed by a handsome prince? All we get is Robney in a yellow jacket and his ilk. I wonder would Winston do the job?
  - karol 2.2.1
    
    31 March 2013 at 12:50 pm
    
    Winston? Possibly not if it involves the racing industry.
    - prism 2.2.1.1
      
      31 March 2013 at 7:43 pm
      
      Yes karol Winston does have difficulty keeping up his level of integrity, highs with the winebox and others, but some lows too.
Pete 3

31 March 2013 at 11:26 am

Internal Affairs was undergoing a lot of restructuring at that time. This sort of thing is bound to happen when back office staff are thrown under the bus. My guess is the files went missing as somebody cleared out their desk.
- Colonial Viper 3.1
  
  31 March 2013 at 12:20 pm
  
  But it doesn’t matter if we lose “back office” staff as long as “front line” staff are safe, right? Right?
freedom 4

31 March 2013 at 12:26 pm

“Internal Affairs insists the material did make its way to the inquiry team working on its biggest-ever case, the $30 million Operation Chestnut probe into pokies grants, run in conjunction with the Serious Fraud Office. ”

Are they saying the case was a suspected fraud of $30 Million or it was costing $30 million to investigate?

If the fraud was for $30 Million then this sentence starkly illustrates how corrupt NZ has become (highlighted by the very existence of the media machine that produced this article). They want people to believe the largest ever suspected fraud in NZ was a measly $30 Million ? *cough* bullshit *cough*

If the cost of the Investigation was $30 million, then should we not be told the total of the suspected fraud they were investigating?
- karol 4.1
  
  31 March 2013 at 12:48 pm
  
  An earlier article says the $30 Mill was the amount of the grants to the racing industry under investigation.
  
  More details here in the ODT. The grants are part of a “money go round” whereby grants to sth island racing clubs are related to pokies in Auckland clubs. I don’t really understand how this works or how much the profits would be. The ODT article says:
  
  Since 2006, several southern racing clubs have recorded on their annual reports an investment with ”Hagley Trustees No 10”, a trust account linked with a Christchurch-based lawyer.
  
  Annual reports for the Central Otago Racing Club, Beaumont Racing Club, Tapanui Racing Club, Gore Racing Club, Southland Racing Club and Riverton Racing Club show investments into this trust account.
  
  These ranged from a $5000 investment from the Beaumont Club, in 2007, to an $85,664 investment from the Riverton Racing Club in 2008. A source has told the ODT the funds were used to finance two South Auckland bars aligned with racing friendly pokie trusts and that grants then flowed back.
  
  Former Internal Affairs gambling compliance director Mike Hill told the ODT in August 2010 the department was investigating southern clubs for alleged possible breaches of the 2003 Gambling Act.
  
  PS: From the earlier stuff article, there is a bit of an explanation as to how the grants work:
  
  Mike O’Brien was executive officer of Metro Trust, a pokie trust, when it surrendered its licence in 2006 after Internal Affairs moved to cancel it. Internal Affairs had claimed the NZ Metropolitan Trotting Club was a “beneficial” owner of five venues in which Metro had pokies and was gaining grants in return, which is illegal.
  
  The Star-Times has seen evidence that O’Brien remained active in the licensed trade after the Metro Trust decision. We have seen an email showing O’Brien acting on behalf of the controversial Jokers’ chain of pubs in Auckland, from which a pokie trust, Trusts Charitable Foundation, gave millions of poker machine money to South Island rugby and racing.
  
  As I understand it, this is a diversion of pokie profits (which should go to the community in the form of grants) being diverted to cronies.
  - freedom 4.1.1
    
    31 March 2013 at 1:35 pm
    
    thanks karol,
    There is so much crap on the ground, sometimes it is hard to know exactly which pattie we are meant to be looking under. Especially when strolling through the cashcrop pastures of pokie machines.
    - karol 4.1.1.1
      
      31 March 2013 at 1:51 pm
      
      You raised a very good point, freedom, and one that stimulated me to think more about it.
      
      Ultimately I guess the size of the fraud (in relation to other spending in the corporate world) is not the main issue here. The cover story used by the pokie industry is that the profits from pokies are returned to the community. As DH points out @1.06pm, some charities are setting up schemes that channel some profits to themselves – profits that should go to the communities, while the money has been drained from a lot of low income pokie players.
      - freedom 4.1.1.1.1
        
        31 March 2013 at 2:02 pm
        
        for example:
        The large numbers of late model cars that these ‘charities’ own or more often lease, and who exactly drives these cars? Well it is most certainly not those who are meant to be benfitting from the charity dollars.
- DH 4.2
  
  31 March 2013 at 1:06 pm
  
  “If the fraud was for $30 Million then this sentence starkly illustrates how corrupt NZ has become (highlighted by the very existence of the media machine that produced this article). They want people to believe the largest ever suspected fraud in NZ was a measly $30 Million ? *cough* bullshit *cough*”
  
  It’s probably the largest of it’s type, Internal Affairs don’t typically get involved in the big frauds either their jurisdiction mostly covers the smaller stuff.
  
  What this looks to be about is the parties (charities) who were receiving the gambling proceeds were (allegedly) also the parties who owned the pokies and handed out the proceeds. Basically they’d set up a nice scheme that channelled all the cash to themselves.
  
  It’s doesn’t look to be an investigation into where most of the real fraud is alleged to be occurring in the pokie industry. Which is the 62.5% of gambling proceeds that don’t go to charities.
  - karol 4.2.1
    
    31 March 2013 at 1:53 pm
    
    I’m interested in where you get the 62.5% stat from for gambling proceeds that don’t go to charities, DH? I thought the majority of the proceeds were meant to be returned to the community.
    - DH 4.2.1.1
      
      31 March 2013 at 2:22 pm
      
      No, from memory its a minimum of 37.12% of gross proceeds must be given to charity, the 62% is to cover the cost of operating the pokies. The charity running them has to buy the machines & maintain them and the pubs & clubs that host the machines charge rent. That all comes out of the 62%. I read that some charities end up giving away over 50% of gross proceeds and some give just the minimum.
      
      They have to give away all of their nett proceeds but that nett is minus costs and it’s been alleged that a lot of costs were being falsely inflated. If they own the pub their pokies are installed in the temptation might be to charge more rent than is justified. The People running the charity might have a different idea to others how much they should be paid. Lots of ways to game the system.
DH 5

31 March 2013 at 12:37 pm

Not sure how many people know how the system works but the big picture problem is that there’s no real way of discovering corruption when it does exist. The various regulatory & enforcement bodies all have near-total discretion on the cases they decide to pursue. They’re not like the Police and there’s no complaints authority.

The usual sign of corruption in law enforcement is an investigation being killed mid-stream. These people don’t even get that far, they have the authority to decide not to investigate in the first place and there’s no process for reviewing their decisions.

If they decide not to follow up a complaint or tipoff with an investigation there’s nothing illegal or rule-breaking about it no matter how serious the complaint or how obvious the evidence. They all have a ready list of excuses and typically cite a limited budget as justification.

There’s nothing anyone can do about this except perhaps go to the media. The system has worked like that for a very long time. It’s the number one reason why so many white collar crooks get away with so much.
Colonial Viper 6

31 March 2013 at 1:00 pm

And so this is what it’s all come down to. There’s no money or advantage in actually building NZ up, just money in scamming it and gaming what’s already here.

Another reason why Christchurch citizens are going to have a 3rd (THIRD!) winter in broken unsafe housing.

Pathetic effort.
whatifdunedin 7

31 March 2013 at 1:06 pm

One of the moderators at the What if? Dunedin website supplies background to Martin Legge’s quest to uncover the missing file; and DIA’s culpability in matters relating to pokie rorts. See here: http://dunedinstadium.wordpress.com/2013/03/31/department-of-internal-affairs-and-office-of-the-auditor-general-stuff-up-bigtime-pokierorts/#comment-33587
karol 8

31 March 2013 at 1:11 pm

A press release from IA early in March shows they have taken one scalp int heir investigations and are crowing about it. However, this “promoter of Cook Islands culture looks to me to be a fairly small fish. The press release ends

The charges are for offences relating to more than $200 000 distributed from grants made from pokie funds.

The investigation by the Department of Internal Affairs revealed that over a period of six years Samson had altered receipts and bank statements for the purpose of obtaining grants from 11 Societies which distribute money lost on pokie machines to community groups.

General Manager of Regulatory Services at the Department of Internal Affairs, Maarten Quivooy says that this case demonstrates that the Department will investigate alleged non-compliance and will not hesitate to call serious offenders to account.
- freedom 8.1
  
  31 March 2013 at 2:08 pm
  
  it’s a common enough tactic.
  Show the sacrificial lamb, so you do not ask about the pack of wolves.
DH 9

31 March 2013 at 1:30 pm

“Quivooy says that this case demonstrates that the Department will investigate alleged non-compliance and will not hesitate to call serious offenders to account.”

Note that he didn’t say they’ll *always* investigate alleged non-compliance.

It’s not commonly known that these Govt regulatory bodies get a lot of tipoffs from the public and interested parties. Fraudsters often dob each other in, if only to divert attention away from themselves. The enforcement bodies follow up very few of those tipoffs. I’m more familiar with the Commerce Commission and I know that a few years back they didn’t follow up even one in a hundred of the complaints they received. IA would be the same I expect.
infused 10

31 March 2013 at 1:41 pm

You’re getting in to conspiracy theories now.
- DH 10.1
  
  31 March 2013 at 1:56 pm
  
  “You’re getting in to conspiracy theories now.”
  
  Nope. Facts that anyone can find out for themselves if they were so inclined.
  
  The various regulatory bodies all have relatively small budgets and an investigation that leads to criminal proceedings will chew up a large chunk of their annual budget. That makes them very selective about the cases they pursue but unlike the Police their selection criteria isn’t evidence based nor is it credibility based nor is severity of offence based. They have near-complete discretion over the cases they decide to pursue.
- One Tāne Huna 10.2
  
  31 March 2013 at 2:00 pm
  
  How so? The various pokie frauds are a matter of public record. Concerns over money laundering come from within the Ministry of Justice.
  
  Perhaps the Lester Freaman quote I referred to above was a little cryptic, so I’ll spell it out for you: law enforcement agencies are reluctant to “follow the money” in drug cases because they know it will lead them into a politically charged environment. The requirement that offenders prove their assets were gained legally – as opposed to a full investigation into their money laundering activities – is a neat way to avoid the issue.
  
  Capice?
- Colonial Viper 10.3
  
  31 March 2013 at 2:22 pm
  
  How can it be a conspiracy (other than an incompetent one) when the facts are becoming more obvious to everyone?
tinfoilhat 11

31 March 2013 at 2:33 pm

Impeach kEY VOTE gREEN NOT lABOUR
handle 12

31 March 2013 at 2:48 pm

Gambling proceeds from poor communities being spent in wealthy ones is common:
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10833951
RedBaronCV 13

31 March 2013 at 3:01 pm

Get Bob Jones to buy the country’s pubs. He’s just turfed pokie machines out of a pub in a building he owns in Wellington when the lease was renewed.

Wonder if he will be embarassed by being a hero of the left and saviour of the poor? [but some of his comments were a little rude]

Any chance of putting pressure on other building owners, insurance companies and the like?
Ad 14

31 March 2013 at 4:24 pm

Fully agree with the post. SkyCity are masters at lobbying and their expense accounts are utterly fabulous. Betcha this whole thing was stitched up between PM Chief of Staff Eagleson, lobbyist Saunders and the Sky City guys when they went on their Vegas tour over a year ago. What goes on in Vegas …

I don’t mind Government intervention to get deals so long as they are utterly out in the open, legislated for, and subject to full Select Committee processes. Compare for example the now late Vern Young’s Maui deal. RIP.

But ass-covering it with a stacked procurement is the worst market signal you can send to every other potential investor, and the worst democratic signal to citizens wanting to see what price is put on their legislators.

And having no economic intervention strategy to make sense of the national interest when doing these deals compounds the failure.

Then turning around and as usual offloading the blame to officials who drafted the deal is the usual political cowardice.

DIA need to crack some heads in the horse racing and in the Licensing Trusts’ pokie machine rorts as well.
Martin Legge 15

31 March 2013 at 5:05 pm

Head of Gambling Maarten Quivooy has been left to continue to fudge the facts surrounding his Depts’ investigation into TTCF even when his bosses, Paul James, CEO Colin McDonald, Nathan Guy and Chris Tremain and the OAG all know of my concerns. I guess they don’t want their careers attached to this scandal.

The fact is DIA approached me about becoming a whistleblower and put me to considerable risk and work in doing so. They convinced me that working with pokie trusts had been a failed experiment and now Senior Management were about to change their ways and get tough with pokie trusts. But then politics kicked in and DIA realised that TTCF was just too big and too well politically connected to be cancelled or actioned against. It was easier to manage me while fudging the results of their work, not interview witnesses and disregard evidence in their possession. The fact that TTCF’s very prominant trustees and directors refused to be interview also didn;t seem to matter.

TTCF is founded on Licensing Trusts, these publicly elected people that are elected to manage the liquor and hosptality businesses in their area. Portage,Waitakere, Wiri, Clutha, Mataura, Geraldine and Cheviout make up 80% of TTCF’s pokie business and the TTCF board is a collection of these elected persons.

I provided info on a number of issues but none more serious than 1) TTCF approving millions to ORFU and Racing from the Jokers Bars in South Auckland between 2006-2011 knowing at the time of approving grants that those entities owned the bars. 2) The TTCF trustees creating and providing a fake contract to a DIA investigator in 2009 for the purposes of attempting to justify an ulnlawful payment of $1.2 million made by TTCF to a private company associated with the Waitakere and Portage Licensing Trusts, TTCF largest venue operator.

The recent media frenzy over the SFO/DIA joint investigation is long overdue but I have to ask while Mike O’Brien, Racing and 3 other large pokie trusts (NZCT, Bluegrass and Infinity) all feel the heat they may well ask how is it that TTCF and ORFU appeared to have dodged a bullet in the face of evidence. Quivooy claims he passed my info on to SFO but I spoke with SFO on 6 March and they’d never heard of me or seen my evidence and were going to officially request it from me. That was over 3 weeks ago. I think we know who is lying!!!

[RL: Apologies for taking so long to release this from moderation Martin.]
- DH 15.1
  
  31 March 2013 at 9:33 pm
  
  Thanks for your comments Martin. Respect to you mate, I know what it’s like trying to get some justice and you really stuck your neck out there.
  
  I knew the name Martin Legge was familiar, ‘paper had an article about this a year ago…..
  
  http://www.stuff.co.nz/national/crime/6785852/The-inside-man
- karol 15.2
  
  31 March 2013 at 9:54 pm
  
  Thanks for that further explanation, Martin. The article DH @9.33pm linked to indicates a long process of you being given the run-around. And now the latest info about the OIA request showing files were “lost” doesn’t quite seem to add up with you being told a couple of years back that the DIA were really getting onto the case.
Saarbo 16

31 March 2013 at 5:54 pm

I have been involved in Rugby Clubs since the 1980’s (playing and administrating) and what has happened to rugby clubs is interesting. Since the introduction of liquor sales in supermarkets, dairies and on every corner of our communities people no longer drink in sports clubs, after the game club members will come into the club rooms for a couple of soft drinks and then will head home to drink discount liquor.

The consequence of this for rugby clubs, which have between $20k to $30k of annual overheads to pay have become reliant on pokie money. I have found the pokies we deal with to be very diligent and above board. I think 10 years ago there were some problems with the pub owners having too much influence over the pokie Trustees but I think that most of that has stopped. The only leverage the pub owners have these days is the threat of shifting their pub to another trust but I think that has pretty much settled down now.

I guess the bottom line is that sports clubs would rather be self funding but our main income source (The bar) has dried up, this may be a good thing but I suspect that it is not as people are now drinking huge amounts of high alcohol content drinks in uncontrolled environments. Sports Clubs and Rugby Clubs in particular provide a huge social contribution to our communities, they are the last institution left I suspect where people from all races and income levels still mix. Without Pokie money most rugby clubs and I suspect other sports clubs would fold.

This is a tough one because I have seen the damage done by problem gambling on the other side but if pokie money disappeared it would be catastrophic to a Saturday afternoon sports in New Zealand.
- millsy 16.1
  
  31 March 2013 at 9:00 pm
  
  Doesn’t help that people, with work commitments, etc. don’t have time for the sports club, or sport in general anymore, especially with New Zealanders working longer hours (Mon-Sat becoming more and more common).
- Herodotus 16.2
  
  31 March 2013 at 9:27 pm
  
  http://thestandard.org.nz/open-mike-09022013/#comment-586487
  as commented here (and I did not communicate) that I am also against the facade of porkies supporting the community. That with user pays philosophy sports / community groups are under server pressure to survive.
  What happens when these groups fold – in regard to sports clubs what will the councils response be when loans for club buildings are defaulted ? Will the councils wind up these sports clubs and who will take them over. Whilst such issues do not register with Wellington, the destruction of our social fabric will have far reaching consequences both social and financial !!! Coming soon there will be a sports club fold or become insolvent.
- RedBaronCV 16.3
  
  31 March 2013 at 10:39 pm
  
  Let us not overlook the fact that the bulk of the money going to rugby is going to” adult male sport ” and the bars facilitate a boozing culture that has caused at least some I know to just stop playing when they leave school.
  
  Why can’t the proceeds be used for libraries in poor areas perhaps or maybe it’s time we got rid of pokies altogether.
  - Saarbo 16.3.1
    
    1 April 2013 at 8:46 am
    
    Speaking for the clubs in our area (14 clubs in our sub union), most of the members would be under 20 years old. Many of these clubs also run JAB (6 years to 14 years). I have never witnessed the boozing culture in our clubs, I suspect that this is a thing of the past (Baby boomers probably remember this from when they were young, very rare in most rugby clubs these days).
    
    What I do witness in the clubrooms are young people doing speeches, in maori and english, i see haka and waiata, i see club members working together to create outstanding meals after the games. It is nothing but positive social experiences for young people. It would be an absolute tragedy if this was to end from my point of view.
    
    If these kids werent at rugby clubs on saturday afternoons, I would imagine a good number would be sitting in lounges watching dvd’s sipping on cheap liquor from the supermarkets.
    
    If we get rid of pokies we better make sure there is a solution for clubs and their long term survival.
Martin Legge 17

31 March 2013 at 8:29 pm

Your concerns outline just how reliant rugby has become on pokies. Gone are the working bees or players playing where they live or work. I am aware that pokies has meant that even the new bred of amateur player shops around between clubs every year, seeking the best deal for himself, whether it be petrol money, playing gear, tracksuits or a cash allowance of some sort.

The ORFU bought into the 3 bars in South Auckland and sucked out $7 million for things associated with the insatiable demand for player slaries and transfers and the perks of running a professional sports team -the Highlanders.

Its illegal for pokie trusts to fund to professional sport but when $7 million goes through the Union Coffers, who would know how the money was allocated or spent. I am advised schoolboy or club rugby in Dunedin got very little and so its just a matter of clever book keeping by the ORFU that made it look like it all went back to grassroots when it didn’t.

Of course this required the full knowledge and complicity of the pokie trust (TTCF) because they approve the grants and would have seen the flow of money from the poor area of South Auckland to the Highlanders. I am neither anti rugby, racing or pokies – I am anti the corruption and wastage that if stopped could mean more funds available for causes such as struggling rugby clubs. Keep up the good work.
- RedLogix 17.1
  
  31 March 2013 at 9:13 pm
  
  This is all a consequence of permitting large scale commercialised gambling in the first place.
  
  Sure people will always bet. They have done so from time immemorial and will always probably do so. As long as it’s personal, local and accountable any harm is pretty limited and a lot of people do get a bit of a harmless buzz from it.
  
  But so many of our human commons we’ve had this one privatised and sold off as the exclusive and reserved right of big corporations to sell back to us.
  - karol 17.1.1
    
    31 March 2013 at 9:20 pm
    
    I think that probably the commercialisation of rugby hasn’t helped grassroots amateur rugby that much either.
    
    Pokie machines are supposed to be one of the most addictive forms of gambling – playing against a machine, which is also part of the industrialisation of gambling.
    - Phil 17.1.1.1
      
      1 April 2013 at 10:45 am
      
      Karol, oh and everyone else here with this notion that “pokies” are a form of gambling.
      This spurious idea is at the very root of the issue.
      Gambling (of the legal kind) is based on the fact that the game is straight, that there is fairness built in. That is why gambling is legislated. We play against an opponent, by means of skill or chance. But we assume and expect that the game is fair. If we discover that the game is rigged we complain, take action or never play with that opponent again. We would be foolish to do otherwise. We have taken a risk (not a true risk) in an attempt to achieve a benefit.
      Pokies (if assumed to be gambling machines) are to a greater degree, a true risk activity. There is little chance of achieving benefit because that is not the function of a pokie machine. Pokie machines are not gambling machines, they are gaming machines. They are not created to be fair, they are, in fact, designed and built to provide the player with purchased time at the machine.
      The GTA (Gaming Technologies Association) who describe themselves as “the peak representative body for Australian gaming machine technology suppliers” are even kind enough to spell this out for us.
      From their Player Info sheet;
      “Gaming machines are designed as recreational amusement devices on which people
      can spend money”.
      and;
      “It is possible to win money on the machines.
      In practical terms, however, players can only ‘get ahead’ of a machine on a short term
      basis at best. Many players will experience sessions of play when prizes won exceed
      the amount spent. In the long term, however, in all but the most unusual and
      extraordinary circumstances, this outcome is virtually impossible”.
      Pokie machines are simply that, an amusement device (if one is so easily amused). The problem occurs if we (public or government) continue to classify pokies as a “gambling” activity.
- Saarbo 17.2
  
  1 April 2013 at 4:53 pm
  
  Yes Martin, I am aware of Provincial Rugby using pokie money to fund the commercial side of the game. Once again though I suspect that (hopefully) this is a thing of the past. The main driver is the NZRU has imposed strong rules that require provincial unions to fund semi/ professional player salaries from external funding. Provincial Unions have ratios that they must meet to gain funding from NZRU, one of the ratios is that they have to cover % of Player Salaries/NPC Team costs from external funding.
  
  The Otago situation was replicated by many racing clubs, also I think Canterbury, Counties and Waikato also got involved in owning pubs via trusts. But it has been nailed by the Authorities with the help of the NZRU. The other positive downstream consequence of these strong regulations is that the Provincial unions are now operating in the black more.
  
  I am 100% with you on being anti corruption, the Otago situation was a shocker. I thought pokie money had to be spent in the community it come from!.
  
  The point I am making is that if pokies were done away with the consequences to the community wouldn’t be completely positive, there would be negative consequences in terms of funding cuts to many community activities.
  - Paul Campbell 17.2.1
    
    1 April 2013 at 8:32 pm
    
    The whole racing/pokie thing just puzzles me completely, they’re allowed to use the pokie money for stakes? prize money to be given to the professional jockeys and horse owners, for the races that these days almost no one ever attends, that are held largely for TAB betting.
    
    Racing stakes should not be considered charity – why don’t they just short circuit the whole racing industry – have the TAB pay for the stakes out of their profits, don’t go hitting up gamblers in South Auckland to fund horse owners in Canterbury.
    
    As for the ORFU, a bigger bunch of financial no hopers I’ve never seen: they forced Dunedin city to build them a half billion dollar stadium for free, can’t afford to pay to use it, nor can they fill it regularly, and didn’t figure out until it was too late that the one asset they had, the one backing their bank loans, Carisbrook, would become worthless when the new stadium opened, and as result had to get the city to bail them out of near bankruptcy.. Finding out that they’ve been rorting money from Auckland pokies to keep their little empire afloat is hardly a surprise I guess.
Don't worry be happy 18

1 April 2013 at 12:10 am

Thugby, booze, pokies and organised crime in bed with local and national pollies…what a surprise! What a sport! What fine men! What role models for our children….
Martin Legge 19

1 April 2013 at 10:15 am

As I have stated the rorts I experienced and witnessed first hand were whilst I worked for The Trusts Charitable Foundation Inc (now extinct) which remorphed itself and transferred its assets and its trustees into a new entity called The Trusts Community Foundation Ltd which now operates out of West Auckland.

West Auckland is Labour territory and when the Gambling Act 2003 was introduced by labours George Hawkins he deliberately set out to exclude Licensing trusts from having involvement in the pokies because he considered that their commercial liquor and hospitality industry was a gross conflict of interest.

The West Auckland Licensing Trusts imediately lobbied David Cunliffe (their local MP) and got the law amended to allow elected members of Licensing trusts limited say into who got grants money.

Since that amendment and thanks to Mr Cunliffe it is now a matter of record in repeated DIA audits and investigations that the Portage and Waitakere Licensing trusts have totally abused that amendment and have led a campaign of misleading Westies into thinking that all the money they receive in grants comes from their Licensing Trusts when the truth is, its pokie money from TTCF and the $50 million dollar plus liquor business returns very little of its own liquor profits to the community but supports which instead supports a corporate structure and an entourage of 17 elected members, meeting fees and their salaries.

Thanks to David Cunliffe, the pokies have been allowed to prop up the liquor business in West Auckland and maybe a reason why Labour have not waded into this TTCF scandal and the whole pokie corruption business as we could have expected and its all been left to the Greens.
- DH 19.1
  
  1 April 2013 at 3:47 pm
  
  I take it there’s more to the story there Martin. Cunliffe may have left the gate unlocked but it’s not his dogs worrying the sheep.
  
  I must admit to being often puzzled by people’s attitudes on issues like this. If we can accept that Martin’s claims are true and that there is sufficient evidence to bring charges then the worst offenders here are the people who are supposed to be upholding the laws of the land.
  
  Pursuant to the reasoning that the case is solid then these people at IA could be assumed either corrupt or unfit for the job. Even if there was outside political pressure to kill the investigation they should still have the moral fortitude to resist any interference and do their job. These bastards are being paid enough, what’s the goddamned point in having laws if they’re not going to be enforced?
  - karol 19.1.1
    
    2 April 2013 at 8:33 am
    
    This:
    
    Pursuant to the reasoning that the case is solid then these people at IA could be assumed either corrupt or unfit for the job. Even if there was outside political pressure to kill the investigation they should still have the moral fortitude to resist any interference and do their job. These bastards are being paid enough, what’s the goddamned point in having laws if they’re not going to be enforced?
    
    This is what concerns me the most. There is enough evidence of the way the pokie industry and its money-ground works for the DIA losing evidence to be a major cause for concern. And when the same industry involves dodgy processes on the part of Key and Joyce to do a deal favourable to the pokie industry….. I wonder how high up the corruption goes.
    
    And this sort of corruption is probably one that many involved don’t see as corruption. The actions of many involved might involve small acts of rule bending. The corruption is in the sum total of actions, plus some more extreme corruption carried out by a small number of people.
    
    I’m in Cunliffe’s electorate, and disappointed that he bowed to the pressure of the pokies’ lobby. Something to raise with him or his office when I get a chance.
    - DH 19.1.1.1
      
      2 April 2013 at 10:09 am
      
      It’s a common problem Karol. Few people understand that the Police don’t have jurisdiction over investigating most types of fraud in business. They’ll chase the one-person con artists but business fraud is investigated by various regulatory & enforcement bodies such as the Commerce Commission, Companies Office, Securities Commission, Internal Affairs, Serious Fraud Office, Official Assignees office etc.
      
      Those bodies all have relatively light budgets and the pressure is on them to pursue only the cases that have a high chance of success, that won’t break their budget, and which will bring the most publicity. Missing from the equation is the concept of right & wrong, guilt or innocence, seriousness of offence. Put bureaucrats in charge of these institutions and you’ve got a Police force that doesn’t police. In poker terms they’re all big bluffers and the crooks in business know it. Notice the comments about lawyers etc in the Stuff article I referred to.
      
      I personally lean towards the bureaucrats in charge of these offices lacking a moral compass. Quite simply they don’t know what right & wrong is. There’s people at the Commerce Commission, for example, who see anti-competitive behaviour as a far more serious offfence than a business person ripping people off. They all knowingly turn a blind eye to the offenders who don’t fit their own investigative criteria, literally do nothing. Pretty depressing really.
      
      The NZ public should be extremely angry at the refusal of all of these offices to enforce our laws but 99.9% of people are ignorant of how the system works so they blithely carry on trusting them. The media are no help at all, they should be demanding these IA people’s heads.
    - Martin Legge 19.1.1.2
      
      2 April 2013 at 6:28 pm
      
      You are probably also in the West Auckland Licensing Trusts area. Your may have heard their claims of $80 million to the community in 10 years. Completely false and misleading public advertising. It was pokie money, not liwuor profits (there are none) that paid for all those torches, the first aid kits, the car seats and the fire extinguishers available to everyone in West Auckland if they went into a bottle store and collected them. All branded with the big red dot “The Trusts.” The reality is the money was the proceeds of the pokies and paid for by TTCF and not the Licensing Trusts. The Trusts like any other private venue operator had just found a clever but unlawful way to enhance their own commercial liquor business and brand off the back of pokies. Read “Show me the Money” by Steve Kilgallon published in October 2010 for the story.
      
      If you are further interested and want further proof these guys are fooling their electorate then google Warren Flaunty on youtube. He’s NZ most elected man and carries a bit of weight in the West. It shows his speech in the 2010 Local Body Election campaign in Waitakere in which he omits to state he’s a director of the pokie trust that controls all the money and perpetuates the same old lies that it was the Licensing trust that gave 80 million in over 10 years. Why would omit tthat role considering thats where the money came from. Simple- because it’s the very existance of a Licensing Trust structure that gets him elected and gives him importance
      
      These 17 elected members of West Auckland licensing trusts love the kudos and the adoration the pokie money brings them at election time but its pretty obvious they do not want to tell the truth or publicly announce their association to the dirty business of gambling and pokies.
      - karol 19.1.1.2.1
        
        2 April 2013 at 6:53 pm
        
        Thanks, Martin. Disturbing article: “Show Me the Money”.
        
        I will save it for future reference (like the up coming council elections).
        I don’t drink alcohol, so some of the Westie experiences referred to are outside my experience. The local bottle shops are fine for me to buy some wine to take to a meal at someone’s place. Most of the people I mix with out this way are more likely to go to a restaurant than to just want to go drinking… and some go to places like their local RSA.
        
        I do find the implication of Lopdell House in the money-go-round to be a bit worrying. I see now they acknowledge TTCF directly as a sponsor.
        
        I do go to some Lopdell House events, but it also leans towards events that draw in middle class audiences.
        
        Martin Legge 19.1.1.2.1.1
        
        2 April 2013 at 9:03 pm
        
        Lopdell house was a historical, earthquake risk building owned by the Waitakere City Council. The WCC transferred the assset into a charitable trust (the Lopdell House Developement Trust) for $1 making it elligible to receive pokie money from TTCF for its revamp.
        
        When complete it will contain afew community arts clubs but of more importance to the council is the fact that it will house a commercial tenancy including -cafe and bar and other commerical tenancies that the Council will reap benefits from over years. How does this happen. Well the Warren Flaunty and the Ross Clow are Waitakere City Cousellors, elected members of Waiatakere and Portage Licensing trusts.
        
        As earlier demonstrated.they play down though is the fact they are Directors of the pokie trust, TTCF because that is not what gets them elected. They force themselves on to the TTCF board because the West Auckland Licensing trust is TTCF biggest venue operator and TTCF will damn will do as they say regardless of pokie laws or what westies think.
        
        These people know how to spend your money the best. I say its time Westies woke up to the reality about Licensing trusts, force a vote and get them ousted. At least there is something honest about private cafes and bars rather than a fieifdom that takes its cleint for suckers.
        
        mickysavage …
        
        2 April 2013 at 10:56 pm
        
        Um Martin I have some knowledge about Lopdell.
        
        The project is a $19 million project to refurbish Lopdell House, the “Treasure House”, build a carpark and construct a new gallery.
        
        The Trusts are putting some money into it but Auckland Council is putting in most. There is also some support from ASB Trust.
        
        The total precinct will have significant more space and better quality space for art and Lopdell House itself will be made earthquake proof.
        
        There will be a commercial tenancy but the overall operational costs will be increased and making it affordable is important.
        
        And the west will have a kick ass Gallery which will include an educational facility.
        
        Sorry it is not an example of corruption. Lopdell House is an absolutely vital piece of infrastructure.
        
        I do agree with you about pokies. They are evil pernicious machines. Out west they are harder to find than elsewhere so it is actually important for the trusts to remain.
        
        As for the trustees well if you live out west you can vote for who you want. For me I actually prefer that there is local control on how the money is spent.
        
        Martin Legge …
        
        3 April 2013 at 9:19 am
        
        Lopdell House is a good project but what the public or probably those involved in the project at the time didn’t see was what went on between PLT and TTCF over this. It further highlights the lack of transparency over the origins of the money in West Auckland.
        
        The business plan only contained reference to the 5.8 million coming from PLT when the reality is they don’t make that kind of money and so it was pokie money being promised and that TTCF were going to be expected to front up with it. The problem here was that the TTCF Board knew little about the project or the financial committment and were less than impressed with the fact that Ross Clow was entering into agreements without their knowledge.
        
        So concerned about this situation, Malcolm McElrea, the TTCF Chairman at that time, met with DIA and effectively dobbed Ross Clow and PLT in to DIA. The subsequent investigation found that serious breaches of the gambling laws had been committed. No action followed and the matter never made public.
        
        I guess it highlights the fact that while pokie funding is meant to fair and totally transparent, the West Auckland Licensing Trusts have been allowed to play fast and loose with other peoples money.