Ombudsman investigation: QLDC releases 'missing' $25 million documents

Crux has received over 200 emails and documents from the Queenstown Lakes District Council that were wrongly withheld for almost three years under official information legislation.

The documents relate to the council’s failure to comply with its own financial rules designed to deliver transparency, value for money and support for local suppliers. The estimated expenditure involved is around $25 million, with part of that amount going to external consultants who were in many cases former council managers.

After quoting “technical problems” with council data systems QLDC’s CEO Mike Theelen personally sent the documents in an email to Crux late on Friday night (Feb 9^th) more than 24 hours after a deadline put in place by the Chief Ombudsman Peter Boshier (main image).

78 of the documents have been released in full with 74 being redacted or edited to remove information that the council still believes it is entitled with withhold under the Local Government Official Meetings and Information Act (LGOIMA).

A further 58 documents have been supplied following additional guidance by the Chief Ombudsman but Crux has not yet been able to check if those documents have been redacted or not.

Crux is in the process of reading, indexing and cross referencing the documents, a process that may take a further two or three days.

The documents were first requested in 2021 following a Crux investigation showing that QLDC staff were ignoring the council’s procurement rules put in place in 2016. The rules were adopted by elected councillors in order to make sure ratepayer money was spent in alignment with central Government and Office of the Auditor General policies on transparency and accountability in the use of public money.

CEO Mike Theelen finally admitted in early 2021, after a year of denials, that not only were the rules not being followed but the rules contained a vital flaw that had the power to bring the council’s day to day operations to a standstill.

Crux is expecting the newly released documents, that took a long-term investigation by the Chief Ombudsman to obtain, will shed light on how the spending rules were by-passed for five years and why the rules weren’t fixed to correct the major systemic error from 2016.

The non-compliant spending was revealed after a complex 2020 Crux investigation into one council supplier (ZQN7 Ltd) run by a former manager, Ruth Stokes, who was paid $600,000 for routine bylaw reviews with no competitive tender or proper procurement process.

Mrs Stokes was also the CEO of the Queenstown Chamber of Commerce while working for a number of local councils around New Zealand as a highly-paid external consultant.