Millions of dollars of pokies cash has stopped flowing into
the coffers of the racing industry as a major joint agency
Last year, Operation Chestnut was launched by the Department
of Internal Affairs, the Serious Fraud Office and police into
the alleged manipulation of $30 million of gaming grants.
The investigation involves several trusts named previously by
the Otago Daily Times as the New Zealand Community
Trust (NZCT), Bluegrass, and Infinity Foundation.
Those trusts have previously granted large sums to the racing
industry, including Southern racing interests, but since
confirmation of the investigation, some have pulled back
Figures released to the ODT show between 2005 and
2014, more than 50 charitable trusts had pumped $130 million
in the racing industry; from a high of $23 million in 2009,
to $7.5 million last year.
NZCT pumped $18.6 million into racing between 2005 and 2014,
including grants totalling $3.8 million (2009), $3.3 million
(2011), and $2.4 million (2012).
However, NZCT gave no grants to racing this year, and only
$371,000 last year.
NZCT chief executive Mike Knell confirmed ''once we were made
aware of the investigation around the racing industry, NZCT
placed a voluntary moratorium on funding the sector pending
the outcome of the current investigations''.
Internal Affairs, police and the Serious Fraud Office last
week declined to comment about the investigation.
However, sources confirmed the racing industry figures
heavily in investigators' line of questioning.
The New Zealand Racing Board also declined to comment because
Operation Chestnut was an ''active investigation''.
Gallop South general manager Malcolm Little said since ''[the
investigation] has been going, we haven't applied for any
''I can't answer for all the clubs, because they can do their
own applications outside of us, and that is what we have been
trying to review for some time.''
Last year, the Internal Affairs and the Serious Fraud Office
staff executed search warrants and seized computers, with
Southern racing club representatives also interviewed as part
of the investigation.
Internal Affairs gambling compliance director Debbie Despard
said ''white-collar crime is a complicated area because it
often involves elements of technical sophistication,
concealment and influence''.
Asked whether trusts under investigation had been asked to
stop their funding to racing, she replied: ''Gaming machine
societies are charged with issuing grants to authorised
purposes for community benefit.
''While racing is an authorised purpose, we expect societies
to exercise their responsibility to ensure the integrity of
the grant funding process, including the use of grant funding
by recipients, and to manage their operations and risks.''
A recent decision by the Gambling Commission supporting
Internal Affairs' decision to refuse a gambling licence for
another trust, Eureka, was ''significant'' for the sector,
''It indicates we are serious about denying gambling licences
to individuals that attempt to conceal their activities or to
mislead the department.
''We are determined to uncover underhand activities that have
the potential to deprive community organisations of much