Internal affairs to investigate ORFU, pokies

The beleaguered Otago Rugby Football Union could be liable to pay back millions in pokie grants if its relationship with three Auckland bars and a gaming trust is proven unlawful.

New Zealand Rugby Union (NZRU) representatives will meet Department of Internal Affairs (DIA) officials to hand over the file concerning the union's involvement with pokies.

Last week NZRU-appointed change manager Jeremy Curragh said all pokie grants received within the last financial year had been accounted for, with $65,000 to be returned to trusts as the money was not spent on its authorised purpose.

He said it was not ideal the way Otago had treated the grants, and "money goes into the pot and goes in different directions".

Earlier this year, the Otago Daily Times reported the union bought the bars and entered a relationship with The Trusts Charitable Foundation (TTCF) after an earlier attempt to set up its own pokie trust failed.

A DIA spokesman said the department was in the process of completing an in-depth audit of TTCF.

"[The department] will follow up with the society any area of concern that may be found."

He confirmed the Gambling Act required a society to recover grants not spent on the purposes for which they were sought.

Last week former TTCF grants contractor turned whistleblower Martin Legge told the ODT the union received more than $6 million in pokie funds from the trust between 2005 and 2011 "supposedly for amateur rugby".

"I was always astounded by the number of salaries for high level and obscure positions and the sophistication of equipment, software etc being applied for."

Internal Affairs has consistently stated it is investigating the trust as opposed to the ORFU.

However, Mr Legge says he is "shocked that they are not investigating the clandestine bar ownership".

Under the Gambling Act, the union was not permitted to own bars and receive pokie grants from those venues or influence the grant process in any way.

Mr Legge said the union bought three pokie venues - known as the Jokers bars - via Roseburn Holdings in 2004, before it sold a stake to harness racing interests.

The ODT has obtained a copy of a handwritten budget allegedly given by Queenstown-based TTCF trustee Murray Acklin to Mr Legge, which instructed how funds from the Jokers venues would be split between the union and harness racing interests.

This week Mr Acklin said he had no recollection of the handwritten budget.

Last May, the ORFU lost its last but most lucrative venue, Jokers Manurewa, and the "huge and regular funding stream dried up", Mr Legge said.

"It would be impossible for any organisation to lose that sort of cashflow and survive if they relied on it, and obviously they did."

Earlier this year the ORFU, which had $2.35 million in debts and a forecast loss of $750,000, announced it would go into liquidation but was saved through a late rescue package.

Mr Legge is calling for the Dunedin City Council, which wrote off a $400,000 debt from the 131-year-old union, to demand an inquiry on behalf of ratepayers.

He is concerned an Internal Affairs audit of individual TTCF grants would find nothing, and while he had supplied the department "conclusive documents and statements" about the relationship, he was yet to be contacted.

Dunedin City Council governance manager Sandy Graham said the council had co-operated with the New Zealand Rugby Union in its recent investigation of the union, and its involvement with pokies.

"The DCC has provided any relevant information it has to the NZRU. DCC has subsequently been informed by the NZRU that it has found nothing to stop the recovery package proceeding.

"The NZRU has arranged to meet with the Department of Internal Affairs to hand over its file, which the DCC supports.

"At the end of the day, the DIA is the appropriate body to investigate whether there has been any non-compliance with the Gambling Act.

"The DIA is currently investigating The Trusts Charitable Foundation which may include its dealings with ORFU."

She declined to comment further because of that investigation.

If it was proven the union and TTCF knowingly captured pokie grants, then both entities - and their trustees - could be liable for the recovery of grants, and the trust could lose its gambling licence with no right of appeal, he said.

TTCF ceased trading in March 2012 and Internal Affairs licensed a new entity, TTCF Ltd, with former trustees and key personnel at the helm. The former TTCF gave more than $800,000 in grants to the union during 2010-2011.

hamish.mcneilly@odt.co.nz

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