ZQN.7 - How QLDC spent $505,000 on consultant Ruth Stokes

by Peter Newport - Mar 16, 2020

In a random look at one of the consultants on the receiving end of $388 million of ratepayer's money between 2016 and 2019, Crux has been investigating ZQN.7. The company was paid $505,000 over this period but has no website and an empty paddock in Arrowtown as its registered office.

Crux discovered also that Mrs Ruth Stokes, the main person involved with the company, is a former QLDC manager who employs, via ZQN.7, Ms Jendi Paterson - a family friend of Mayor Jim Boult and former nanny to his children.

Ruth Stokes with former Dunedin Mayor Dave Cull during her time working for DCC.

Now, under Local Government Official Information and Meeting Act (LGOIMA) legislation, QLDC has released emails that partially explain how ZQN.7 came to be hired. The bottom line is that a QLDC manager, Myles Lind, decided to use Mrs Stokes to review three existing council by-laws.

Please note that Mrs Stokes has answered some key questions from Crux later in this story.

This email exchange was on March 14th, 2018.

Consultant Ruth Stokes tells QLDC's Corporate Services Manager, Meaghan Miller that Myles Lind, Manager of Asset Planning, wants to hire her for QLDC work.

QLDC veteran supremo Meaghan Miller - in charge of many aspects of the council's strategy, payment decisions, communications, governance and hiring/firing.

This exchange takes place only weeks after Mrs Stokes announced she was leaving the Dunedin City Council for "personal projects" after earning the nickname "Ruthless" due to her robust manner with council staff. Before working for the Dunedin City Council, Mrs Stokes worked for QLDC as an Operations and Infrastructure Manager.

The day before emailing Ms Miller at QLDC to get some direction on delivering the three by-law reviews, (March 13th) she sent a proposal to Myles Lind. QLDC has removed the proposal from the email, so it is not visible to Crux.

Ruth Stokes' proposal to QLDC has been removed by council comms staff - but here's the covering email of March 13.

Then, just a day later, on March 14th Myles Lind issues three purchase orders to Mrs Stokes' brand new company - ZQN.7 - for work that eventually will total over $505,000. ZQN.7 had been formed by Ruth Stokes and her husband Antony less than a month before these QLDC purchase orders were issued.

QLDC has refused to release details of the purchase orders or the proposal from Mrs Stokes.

And that's it. ZQN.7 has become a new supplier to QLDC without the work being put out to tender or advertised. The process looks to have taken only a few days.

But a simple check of company office details, and QLDC's own council records, would have shown that ZQN.7's Registered Office was an empty, steep paddock in Arrowtown - owned by Ms Jendi Paterson. To this day, the company has no website.

The Registered Office of ZQN.7 is an empty paddock in Arrowtown at 15 Advance Terrace - owned by Jendi Paterson, a friend of Mayor Jim Boult.

QLDC has withheld a total of 154 emails (from a total of 753 emails) from Crux, giving the following reasons:

(i) would be likely to prejudice the supply of similar information, or information from the same source, and it is in the public interest that such information should continue to be supplied; or
(ii) would be likely otherwise to damage the public interest;

In addition, QLDC withheld 114 emails saying they were commercially sensitive and 40 emails because their release might affect future free and frank expression.

Jendi Paterson - her career seems to follow that of Ruth Stokes, from Queenstown to Dunedin and then back to Queenstown.

Six emails were redacted due to "personal information" and another 58 QLDC emails were withheld due to "legal privilege."

Most of the emails that we did see simply show the by-law work progressing and the introduction of Jendi Paterson into the project by Mrs Stokes and ZQN.7. There are some more permanent looking contracts issued later in 2018, but with most of the information redacted by QLDC.

There's a very tough exchange with the Ministry of Transport in early 2020 over what Mrs Stokes describes as NZTA's staff attitude problems and another email where Mrs Stokes thanks QLDC CEO Mike Theelen's office for arranging a Kiwibuild meeting. The email has had the date removed by QLDC, but it is signed by Ruth Stokes as working for KiwiBuild as their Senior Development Manager.

Mrs Stokes appears to be working for Kiwibuild at the same time as working for QLDC.

In fact both Mrs Stokes and Jendi Paterson seem to both have other jobs while also working for QLDC. According to her LinkedIn profile Mrs Stokes worked for Kiwibuild between January 2019 and July 2019 and then for Wellington consultants RDC Group from August 2019, while still working for QLDC from March 2018 until the present day.

Ms Paterson is currently working for the Hamilton City Council as their City Parks Manager (three days a week) as well as QLDC according to her LinkedIn profile.

Mrs Stokes will only communicate with Crux via her lawyers - Dentons/Kensington Swan. Dentons is the world's largest law firm. Crux voluntarily removed some details from our initial stories on ZQN.7 on the condition that Mrs Stokes provided evidence that the details were not correct. We are still waiting for that information to come through.

In the meantime, here's Mrs Stokes responses, via her lawyers, to our first round of questions. Mr Lind has not responded to Crux when approached - he's now working for Auckland Transport.

Did you approach Mr Lind for QLDC consulting work - or did he approach you? Mr Lind approached Mrs Stokes.
What were the terms? Is the total contracted amount (2016 - 2019) quoted by QLDC in the attached document (last entry) correct - $505,000? If not - what is the correct figure?The QLDC has made its payments to contractors publicly available. (Crux - the figure released is $505,000)
At what stage, and for what tasks, was Ms Jendi Patterson employed by ZQN.7? Mrs Stokes does not consider that this information is relevant to your article.
What is your past experience and qualifications for reviewing local government by-laws? Mrs Stokes is a very experienced local government senior manager, with over 20 years in policy development, regulation, planning, funding and operating major community services, facilities and infrastructure. Mrs Stokes’ past experience is publicly available on LinkedIn.
Was the work contested or offered through the GETS local government procurement system? What exactly was the procurement process? Mr Lind approached Mrs Stokes about the work.
Had you worked with Mr Lind previously at QLDC - either as a staff member or manager - or as a contractor? Mr Lind was employed by QLDC at the time Mrs Stokes held the role of General Manager, Operations. Mr Lind was employed in another department.
Are you doing, or have you done, any other work for other councils - hired by Mr Lind or his department? No.

Alexa Forbes - headed the QLDC Infrastructure Committee

Crux will now approach QLDC for further information on the missing emails and contract details. We don't support or even understand the QLDC argument that not releasing the emails is in the public interest.

We spoke to Alexa Forbes who chaired the QLDC Infrastructure Committee at the time that Mrs Stokes was hired. Ms Forbes confirmed that Mrs Stokes did do necessary work as the by-laws needed to be reviewed every 5 - 7 years, adding that details of specific procurement are not, and should not, be subject to any influence at all from elected councillors.

QLDC's own Procurement Policy is very clear on a number of principles - but here's a high level summary:

Principles of Procurement

QLDC has identified four key principles of procurement: