Doug Martin began an investigation into Southern Response Earthquake Services' use of security consultants, before the inquiry was broadened.

State Services Commissioner Peter Hughes has laid a complaint with police about unlawful recordings of earthquake victims by spy firm Thompson & Clark.

It comes as an explosive report details a slew of damning revelations about how the controversial spy firm was used by government agencies.

Those include reporting and monitoring the Green and Mana parties, iwi and activists - and accessing the motor vehicle register.

Hughes, who is head of the state services, has apologised "unreservedly to those individuals whose privacy has been intruded on by state servants or their contractors."

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KEVIN STENT/STUFF Simon Mount, QC, was brought in to assist the inquiry in June.

"I take responsibility for what has happened here. And I will fix it."

Among the findings are:

- that a Thompson & Clark employee recorded several closed meetings of Southern Response insurance claimants in Christchurch between 2014-2016. The contractor was not a licensed private investigator, which is potentially unlawful. The activity is the subject of Hughes' complaint to police

- Two Ministry of Primary Industries staff were also working for Thompson & Clark, and accessed New Zealand Transport Agency information on behalf of the security firm. They are now being investigated by the Serious Fraud Office

- MPI hired the firm to monitor animal rights activists, and spy on them at conferences in 2005 and 2006

- Crown Law hired investigators from another firm to dig up information to cross examine witnesses in a court case alleging abuse in state care - known as the "White case". The investigators may have used "low level surveillance"

- inappropriate email contact between a Security Intelligence Service staff and one of the firm's directors, which risked harming the reputation of the government spy agency

- unprofessional interactions between the Ministry of Business, Innovation and Employment and Thompson & Clark investigators, working for the oil and gas industry, that "created at least a perception of conflict of interest"

- Thompson & Clark reported to government agencies on the activities of the Green and Mana parties, Taranaki and Northland iwi groups and Greenpeace, described as "an affront to democracy"

Overall, the inquiry has found a lack of professional distance between Thompson & Clark and public servants, and a lack of oversight or written contracts with the spy firm.

There was "system wide failings" across the public service, with staff developing "inappropriately close relationships" with the firm's staff.

And it was also critical of Thompson & Clark's behaviour - including using an unlicensed investigator and covertly attending public metings, recording meetings without consent.

The firm also approached public servants - who had access to sensitive official information - for secondary employment, accessed the motor vehicle register for "potentially improper purposes."

Hughes has also lodged a formal complaint with the Private Security Personnel Licensing Authority and asked MBIE to remove Thompson & Clark from the Government procurement panel - a scheme that pre-approves companies for Government work.

Hughes said the inquiry stretched over a decade of Thompson & Clark activity on behalf of public agencies.

"I am disappointed that the inquiry has uncovered some shortcomings across the State Services," he said.

"While many of the events are historic, the Inquiry has found that seven government agencies have breached the Code of Conduct, including agencies that breached the Code with their use of private security consultants to undertake inappropriate surveillance."

Hughes said he was most concerned that the firm treated "issue motivated" groups as a security threat.

"I am very disappointed that government agencies did not challenge TCIL [Thompson & Clark] on that. It is an affront to democracy, and it is not consistent with how we should view democratic freedom."

CAMERON BURNELL/STUFF State Services Commissioner Peter Hughes says spying on politicians and iwi was "an affront to democracy."

Hughes said agencies could gather information to investigate fraud or tax evasion.

But he added: "I am very clear it is never acceptable for an agency to classify a person or group of people as a security threat just because they lawfully exercise their democratic rights, or to use that as justification for gathering information.

"Equally, it is never acceptable to gather information about people or groups for the sole purpose of managing reputational risk to an agency."

Of the surveillance of earthquake victims, Hughes it was "ill-judged and poorly managed." "It was not right and not the sort of behaviour New Zealands would expect of a contractor working for a government agency."

Hughes says he's issued new "model standards" setting out expectations about how public service should gather information.

Thompson & Clark director Gavin Clark says his firm doesn't agree with some of the findings in the report.

"We have had the final report for less than 24 hours and will take some time to consider it in detail", he said in a written statement.

"There are some findings we do not agree with, as noted in the report, as they don't reflect the understanding that our industry and its Code operated to in years gone by. We will explain our disagreement with those findings to any future investigations that may result from this report.

The firm is undertaking its own internal review.

"We have worked with numerous government departments across three different Governments over 15 years. We have always strived to operate within the law and the rules and regulations of our industry, he said.

STUFF CIRCUIT Stuff Circuit investigates links between Thompson & Clark and the New Zealand police.

In March, the SSC launched an inquiry into Crown-owned company Southern Response's use Thompson & Clark, following media allegations it had spied on Canterbury earthquake victims.

But as further ties between the firm and other agencies emerged, the inquiry was widened to cover the entire state sector.

That came after documents revealed Security Intelligence Service staff appeared to be helping Thompson & Clark find work.

Earlier this month, Stuff revealed Ministry of Primary Industries staff were emailing Thompson & Clark about Kiwi eco-warrior Pete Bethune.

Greenpeace boss Russel Norman said the report was a "Watergate moment" and accused the state of "assisting in systematic and oppressive Stasi-like surveillance."

" Heads must roll at MBIE. This rampant level of surveillance in a supposedly democratic society is simply unacceptable.

"What's more, opposition leader Simon Bridges was at the helm of two of the departments - NZTA and MBIE - that were involved in unlawful spying on civil society. He must answer a key question: Did he purposely use the state to attack democratic civil society groups and MPs, or did he just fail to exercise proper oversight over these agencies.

"This report shows that it doesn't matter if you're a state abuse survivor, an earthquake victim, or a climate activist. No-one has been safe from unlawful spying in New Zealand over the past decade, and it's all been supported by the state."

SIS director Rebecca Kitteridge said the agent caught emailing with Thompson & Clark was dealt with as "an employment matter" but didn't specify if they'd been sacked.

Green party co-leader Marama Davidson said the report should serve as a "wake-up call" for the public service and lead to a culture change.

"The culture of collusion undermines our precious democracy, and we are especially concerned at the targeting of communities defending and protecting their local environment."

Human rights advocates Amnesty said they were "appalled" by the report's findings. Policy manager Annaliese Johnston said: "We would expect the state to value people's freedom to advocate and mobilise on issues they care about, whether environmental, animal rights or historic cases of sexual abuse.

"That the state seems to have instead been using investigators to spy on their own citizens and treating them as threats is very troubling."

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