National Party spokesman for Public Services Simeon Brown first requested the commission investigate the matter in August, as details of a series of government contracts related to two companies owned by or related to Mahuta's husband Gannin Ormsby continued to emerge. Details of the first of such contracts were reported by The New Zealand Herald in May.
Today Mahuta said she also requested the probe and welcomed the development.
"It's concerned me for some time that even though I have declared conflicts of interest and noted they have been managed in accordance with the Cabinet Manual, these stories are still persisting."
She said it's "very clear" that she had "no say in approving at contract level" and that she has been "assiduous" in declaring and managing potential conflicts.
Mahuta was associate minister for three of the four agencies which awarded contracts to the Ormsby-related firms. Her spokesperson has said that in every instance she has not had purview over the area of work covered in the family-related contracts.
Mahuta said she raised her unease with Chris Hipkins, Minister for Public Services, verbally on September 12 and subsequently wrote to him on September 19 to ask that the matter be scrutinised.
She was concerned about issues raised at a departmental level: "In at least three of the government departments, it is evident there is an inconsistent approach to the way conflicts of interest have been managed by them. That is a matter at departmental level. That's why I'm pleased that the Public Services Commissioner is looking at this."
In a written statement, Hughes noted that Hipkins' request for a review formed part of the impetus for the undertaking.
The PSC's jurisdiction is over the public service and does not extend to ministers.
Hipkins' letter to the PSC, released on Tuesday, mentioned the limitation but noted: "I have seen noting to suggest that any Minister has involved themselves in any of the contracts for services that have been identified. However, issues regarding agencies and procurement and conflict of interest processes continue to be raised and need to be resolved."
Hughes has confirmed he will look into contracts awarded both to Ormsby's wholly owned consultancy, Ka Awatea Services, and to related companies.
Contracts awarded to consultancy Kawai Catalyst owned by Tamoko and Waimirirangi Ormsby (Gannin Ormsby's nephew and his wife) will also form part of the probe.
A series of central government contracts worth more than $230,000 (excluding GST) were awarded to the two consultancies in late 2020 and early 2021.
They include contracts with Crown housing agency Kainga Ora, the Ministry for the Environment, the Department of Conservation and Te Puni Kokiri (the Ministry of Maori Development).
Local government is outside the commission's jurisdiction; at least one local government body (Waikato Regional Council) has contracted KAS' work in the last year.
Acting Prime Minister Grant Robertson said there's "absolutely no suggestion that Minister Mahuta has done anything wrong, or indeed any other minister".
Robertson said it was important more generally to ensure the public sector was on top of handling conflict of interest issues.
"There are government agencies who have been contracting with Minister Mahuta's husband's company, we want to make sure that we look at those processes that they are done properly. New Zealanders deserve that."
Robertson said New Zealand was a small country and that "we have had these sorts of issues over many years with many different people"; he said some of the focus on Mahuta "has been unfair".
Hipkins' letter asked the watchdog to consider conflicts of interest, real and perceived, and also to "look across departments and agencies in the broader public service and satisfy yourself that agencies' relationships with Ka Awatea and any of its associated business enterprises are in order..."
Hughes said he does not think the matter "reaches the threshold for an inquiry", however, he will "look into the matters surrounding the four agencies and I have also agreed to the Minister's request to look across the broader Public Service."
Brown had asked for inquiries into the issue on August 29 and again on September 13.
Brown welcomed the development. He said New Zealanders have a "right to know" how contracts were awarded to Ormsby when Mahuta was the Associate Minister for three of the four Ministries concerned.
He said he would have preferred a formal inquiry, but that he was "confident" the PSC has the tools it needs "to examine conflicts of interest or perceived conflicts".
He said "public trust and confidence in our democracy and the public service is critical" and he would be looking to make sure the PSC's work was "full and thorough".
The PSC's involvement follows three individual agency reviews of contentious contracts, which are now either under way or complete.
Last week, the Ministry for the Environment released a review of the process by which it awarded some $90,000 of contracts to KAS and Kawai Catalyst.
The report found no political involvement by ministers; Nanaia Mahuta was Associate Minister for the Environment at the time the contract was awarded (she had no responsibility for the relevant area of work). However, the review enumerated a litany of deficiencies in the process by which the contracts were awarded.
DoC is reviewing a $52,000 (excluding GST) contract awarded to KAS in November 2020. A total of $11,800 (excluding GST) has been paid out on the contract, a consideration that contract documents released under OIA show was due "upon signing" and which show no stipulated deliverables.
Last week Housing Minister Megan Woods confirmed that Kainga Ora was deficient in its conflict of interest process in awarding KAS a $66,846 (excluding GST) contract.
